Penalties for not paying super
There are consequences for employers not making super payments. Employers who do not pay the correct superannuation can face fines for unpaid super or be charged fees and interest. They may also lose their tax deduction for super contributions. It’s another reason why most employers do the right thing.
If you’re employed by someone else, then in most cases your employer must contribute to your superannuation. On the whole, employers know their obligations and do the right thing, especially since there are penalties for not paying super.
If you think that your employer is not paying superannuation, or is not paying the right amount of super, then there are ways to check.
How to claim unpaid super:
Firstly, you need to make sure you are eligible to receive super. Generally, you’re entitled to super guarantee contributions (SGC) if you are:
- 18 years old or over and
- paid $450 or more (before tax) in a month
It doesn’t matter if you’re full time, part time or casual – or if you’re a temporary resident of Australia – you’re still covered by superannuation entitlements.
You may also be eligible if you’re a contractor. Under superannuation law, if you’re a contractor who is paid wholly or mostly for your labour, you’re considered to be an employee and therefore entitled to super guarantee contributions just like any other employee.
Talk to your employer. Most of them do the right thing, however sometimes employers miss payments or stop paying. You should ask your employer:
- how often they are currently paying your super?
- how much is being paid?
- to which fund is it being paid?
Also ask them if you are eligible to choose your own super fund.
Check your last Member Statement from your super fund or contact them to confirm whether your employer has paid your super contributions for the period you are looking into.
If you have completed Steps 1, 2 and 3 above and still believe your employer is either:
- not paying any super
- not paying enough super
- not paying into your chosen super fund
…then you should report unpaid super by lodging an enquiry with the ATO, who will then take up the investigation into your unpaid superannuation.
On July 14th 2017 the Government announced they will seek to close a legal loophole that allows employers to shortchange employees who make extra salary sacrifice super contributions.
The announcement is a welcome step that shows progress is being made to tackle widespread Super Guarantee non-compliance, but a more comprehensive approach is necessary given the salary sacrifice changes will only help one in ten of those affected by unpaid superannuation.
What is Lost and Unclaimed super?
If you’ve ever changed jobs, or held a second job that paid superannuation, then it’s possible you have some lost or unclaimed super that you don’t even know about. In fact, billions of dollars in unclaimed and lost super are currently being held by super funds and the Australian Tax Office (ATO).
Often, super is held by the fund into which it was paid, and can remain idle – especially if the super fund is unable to contact you.
This is commonly known as lost super.
In the past, super funds holding small, inactive accounts have usually transferred the super money to AUSfund (Australia’s unclaimed super fund) where it is held until claimed.
By law, many smaller super accounts which have not received a contribution for at least 12 months, must be transferred to the ATO, and it is then held