There are growing calls for the government to change the law to prevent workers in the Hunter region from losing $140 million in pension payments in one year.

Industry Super Australia (ISA) analysis of 2018/19 tax file data shows that 73,950 workers in the federal electorates of Hunter, Newcastle, Shortland and Paterson were harmed on their super, those affected lost an average of 1 $879 in one year.

This year, the $450 threshold was removed — meaning workers earning less than that amount per month are now super-paid — and the super rate was raised from 10% to 10.5% of wages.

But 29% of workers in the region will not take full advantage of these changes because they are being ripped off about their rights. Missing out on super contributions can cost a retired worker up to $60,000.

To end the hunter’s unpaid super scourge, the government should change the law to require all employers to pay the super with wages.

While most employers do the right thing, some exploit an outdated rule that allows them to pay super quarterly, often despite what’s written on the payslip. Without bonus and salary alignment, workers lose track of their payments and only find out they’ve been underpaid when it’s too late.

Because the super may be paid quarterly, some small business owners also succumb to the temptation to use their employees’ super contributions for cash flow, which also leads to underpayments.

Paying super with wages would level the playing field for all employers, ending the unfair trade advantage that exploitative bosses get by not paying their workers full entitlements.

Uneven action by the Australian Revenue Service only recovered a dismal 15% of super defaults. With limited enforcement, a growing chorus of organizations have supported paying super with wages to address the issue, including industry super funds, Super Consumers Australia, employer representatives, unions, health groups reflection, accounting bodies, law firms and two Senate investigations.

The Labor government’s commitment to creating enforcement targets and including super in national employment standards is welcome but will not stop underpayments from happening, the only way to solve the problem at its source is to demand that the super be paid with salaries.

Super should also be added to the Fair Entitlements Guarantee, the government fund that pays unpaid wages after a company is liquidated. Many companies go bankrupt due to substantial amounts of super to workers.

Comments attributable to Industry Super Australia Managing Director Bernie Dean:

“With the super on the rise and thousands of lower-paid workers finally eligible to receive it, it’s even more important for the government to make sure workers get their due.”

“There are a growing number of organizations calling on the government to change the law to require all employers to pay their employees super when they pay salaries.”

“By not requiring employers to pay super with wages, politicians are effectively preventing millions of workers from getting the money they have earned and jeopardizing their future economic security.”

Table 1: Super Unpaid by NSW Federal electorate in Newcastle and Hunter areas in 2018-19

Electorate

People

Percentage of electorate

Average underpaid

Total ($M)

Newcastle

18,650

28%

$1,995

$37.2

short land

18,150

31%

$2,017

$36.6

Paterson

18,800

29%

$1,871

$35.2

Hunter

18,350

29%

$1,633

$30.0

Regional sum

73,950

29%

$1,879

$139.0

/Public release. This material from the original organization/authors may be ad hoc in nature, edited for clarity, style and length. The views and opinions expressed are those of the authors.