Unpaid Superannuation !

The law is quite clear when it comes to the superannuation obligations of employers.  Quite independently of the money handed over in pay packets, they are obliged to pay a percentage of that wage into their employees superannuation account where it will draw interest until the day of retirement comes around.

When that doesn't happen, not only is the employee cheated but it is also a law breach that can result in a prison term.  The lawmakers have just introduced an unusual amnesty that will allow employers to avoid fines if they admit the breaches that have occurred and make good on the missing money.
That amnesty was first announced in May, 2018 but never made it into law.  It got bogged down in the usual political wrangling and thousands of businesses which had taken the promise at face value and admitted the crime were left in limbo.

That will be of great relief to many companies who feared instant retribution from the tax office.  The legislation is now in force to allow them to avoid fines if they repay the superannuation owed to their employees, plus a ten percent interest fee for the time it was not earning any interest.  That money will need to be paid upfront, or by way of a payment plan.

What is frightening is just how widespread this non payment of the superannuation levy has become. When the amnesty was first announced seven thousand businesses admitted their guilt and it is expected about another seven thousand will put their hand up now that the amnesty has passed into law.  In the past five years, 17,000 employers have admitted being liable for unpaid superannuation.

It seems that this superannuation obligation is the first casualty when an employer faces difficulty in making payroll.  If sales are down and the money flow is meagre handing over that pay envelope on Thursday takes precedence because without it the employees obligations for rent and food can not be met.  The superannuation payment merely becomes at item mentioned on the accompanying pay slip.

Unfortunately, when a business closes its doors and files for bankruptcy one of the prime debts discovered by the receiver is usually money owing to the employees superannuation fund.  Even if payment of this receives priority it is doubtful that the employees to which it is owed will ever see even a small percentage repaid.

The fact that parliament is considering an increase in the wage percentage to be paid to superannuation is likely to increase this problem. On any given year a lot of businesses cease trading and go out of business.  Whether that omission in paying superannuation is deliberate or caused by lack of cash flow the end result is wage theft.

It will continue to go unchallenged until the wage earner can be conditioned to seriously coordinate with their superannuation fund to ensure that company contributions are up to date - and on time.  At present, few employees regularly check on the health of their superannuation fund or raise the issue with their employer.