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News News Employers failing to pay super dues
A growing number of workers are owed or will never be paid their superannuation entitlements from employers, Tax Office figures reveal.

The amount of collectable debt from employers who have failed to pay employees' superannuation has increased each year over the past five years.

Outstanding debt rose from $122.5 million at June 30, 2003, to almost $300 million by March 31. According to evidence provided by the Tax Office at a Senate estimates hearing last month, about 26,000 employers have still not paid employees' compulsory superannuation payments, potentially affecting up to 364,000 individuals. Many employees will never be able to get money owed.

Separate figures from the ATO, obtained by Labor senator Nick Sherry in response to a question on notice, show more superannuation debts are being written off. The amount written off as a result of employer insolvencies jumped from $49 million in 2003-04 to $55 million in 2004-05.

Employers who fail to pay their employees' superannuation guarantee contributions quarterly are charged interest and an administration fee by the Tax Office. But employers are exempt if the company becomes insolvent, which has left thousands of employees unprotected.

The Federal Government introduced a bill last month to give employees greater protection in cases of insolvency. Under the proposed changes, superannuation would be considered the same as other entitlements such as wages and annual leave, and would be paid out of a company's assets after creditors are paid.

The Australian Taxation Office's deputy commissioner, Raelene Vivian, told Senate estimates that the ATO had increased staff to carry out checks into high-risk employers in sports associations and labour-hire companies.

Despite this, the investigation time — between a complaint being lodged and finalised — had increased from 309 days in 2005-06 to 340 days in 2006-07. Senator Sherry said: "It begs the question: is the program effective enough?"

A Tax Office spokeswoman said the increase in compliance work had allowed the ATO to detect more collectable debt, which in some cases had been accumulated over a number of financial years. "In about 75 per cent of unpaid super guarantee cases, the employee complains after they have left the employment, (which) means it is harder for us to investigate and recover the debt," she said.

Assistant Treasurer Peter Dutton said the Government had increased the ATO's funding, and the legislation would improve prospects of recovering outstanding super entitlements.

The Association of Superannuation Funds of Australia's director of policy, Brad Pragnell, said the superannuation guarantee should be paid monthly rather than quarterly, to make it more difficult for employers to avoid paying.

Investment and Financial Services Association chief executive Richard Gilbert said some employers in high-risk industries with large numbers of casual staff — such as hospitality, construction, agriculture and small retailers — were to blame. Mr Gilbert encouraged individuals to use the web and regularly check whether their employers were making their compulsory super contributions.

 
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