The Importance of Seeking Superannuation Advice
Superannuation advice plays a critical role in helping individuals navigate the complexities of retirement planning and make informed decisions. Industry Super Australia (ISA), a prominent industry body representing superannuation funds in Australia, has collected recent data revealing that $5 billion in superannuation was not recoverable for workers in the 2018/19 income year. This highlights the importance of seeking practical superannuation advice to help employees recover their unpaid super. The report also highlights the need for more significant assistance from the ATO, as only 12% of missing superannuation was recovered on average between FY2014 to FY2018. The full report can be accessed here.
Where an employee cannot directly work with the employer to resolve and recover the unpaid super, employees have the option to lodge an enquiry with the Australian Taxation Office (ATO) using their online tool. The ATO will then conduct the relevant investigation and confirm whether there is a case for their unpaid super against the employer.
Recommendations for Improving Superannuation Compliance
To address the issue of unpaid super, ISA has put forward several recommendations to the government. These recommendations aim to strengthen compliance and ensure better protection for employees’ retirement savings. These also highlights the need for both practical and expert superannuation advice. They include:
- Compulsory Same-Day Super Payments: Making it mandatory for employers to pay superannuation on the day that the employee receives their payment. This would help prevent delays or non-payment of super contributions;
- Enhanced ATO Power and Penalties: Give the ATO more power to enforce more rigorous penalties for employers not doing the right thing. This would act as a deterrent and encourage compliance;
- Collaboration with other Agencies: Give other agencies (i.e. Fair Work Ombudsman) the power to communicate with the ATO to help recover unpaid super;
- Extend the notion of “Fair Entitlements Guarantee” to super: meaning it can also be recovered like leave entitlements on an employer’s insolvency.
This report from ISA will no doubt motivate the government to make super payment rules stricter for employers going forward. Please be reminded that employer super (Superannuation Guarantee) is due on or before 28 days after the end of each business quarter. Ensure you pay your employees’ super on time to get a tax deduction for the superannuation payment and avoid having the ATO investigate your business or impose super penalties. Also, with Single Touch Payroll (STP) now live and required to be filed by all employers in Australia (effective 1 July 2021), the ATO now has more live data and access to your employees’ entitlements, including the superannuation amount due.
Conclusion
Superannuation advice is crucial for individuals to navigate the complexities of retirement planning and ensure the security of their future. The ISA report highlights the significant issue of unpaid superannuation and emphasizes the need for stronger measures and enforcement. By seeking practical advice, understanding superannuation obligations, and complying with payment rules, both employers and employees can contribute to a more financially stable retirement for all Australians.
If you need help managing the quarterly super for your employees or you have any queries, please do not hesitate to contact us.
Kreston Stanley Williamson
Author – Quang Tat
*Correct as of 3 February 2022
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.
