CALL US: (07) 3367 0999 | EMAIL US:

Unpaid super costing workers tens of thousands of dollars

Workers on the cusp of retirement who are short changed on their superannuation entitlements have nest eggs that are tens of thousands of dollars less than those who are paid correctly.

Using the latest ATO data from 2013-14, the research from Industry Super Australia found that people aged 60 to 64 on salaries ranging from $50,000 to $75,000 who weren’t correctly paid their SG that year, had overall super balances that were $35,089 or almost 40 per cent less than those who were.

Across all ages and all salaries, those Australians who were underpaid their super had balances that were $19,709 or 47 per cent lower than those who had received it.

Australian law requires employers to contribute 9.5 per cent in superannuation towards every worker over the age of 18 earning more than $450 (gross) a month. This is the Superannuation Guarantee.

However, a report released late last year found that 2.4 million or one-third of entitled workers were denied their SG in 2013-14. For the average worker, this represented $1,489 or four months’ worth of savings.

This new work draws from an ATO 2 per cent sample file of matched personal tax and superannuation records for 2013-14 and analyses the difference in balances for people who are underpaid employer super by nine categories of age and by six categories of wage and salary. In the matrix of 54 combinations, underpaid super was associated with a markedly lower balance in all combinations.

Business
advice

taxation
planning

compliance
services

News

Proactive consolidation with ILBAs

November 13, 2019

Inactive low-balance accounts (ILBAs) are a new category account that needs to be reported and paid to the ATO. This was introduced in the Treasury Law Amendment (Protect Your Superannuation Package) Bill 2019 that came into effect on 1 July 2019 after first being announced in the 2018-19 Federal Budget.

ILBAs are designed to protect accounts from fee erosion. Where possible, the ATO will proactively consolidate super on behalf of an individual.

A superannuation account is considered an ILBA if the following criteria are met:

Funds are required to identify ILBAs on 30 June and 31 December each year, then report and pay them to the ATO by the statement date.

Individuals that have an account that they do not want to be transferred to the ATO as an ILBA, can consolidate super accounts using ATO online services through myGov, contact their super fund for more information or authorise their super fund to provide a written declaration to the ATO.