Australian workers have lost $41 billion in superannuation savings over the past nine years as the problem of bosses failing to pay entitlements worsens.

Analysis published on Wednesday by the Super Members Council found 2.8 million people were not paid super in 2021-22, with the average worker set to be $30,000 worse off in retirement.

And despite federal government efforts to crack down on employers breaking the law, SMC said the latest data shows the problem is getting worse and an even greater effort is needed.

“Unpaid super locks too many Australians out of the full transformative benefits of the retirement system and leaves people poorer when they retire,” SMC chief Misha Schubert said.

“A unified push is needed to stamp it out.”

The SMC is calling on the government to direct the Australian Taxation Office to go after companies that fail to pay super by setting new targets that measure their progress in reducing amounts of unpaid income.

They also want the government to better support workers who are seeking compensation when their employers become insolvent before they paid out outstanding superannuation entitlements.

“Legislation to pay super on payday, combined with a stronger ATO enforcement regime and better support for workers to claim their super after insolvencies, is crucial to ensure millions of Australians who are currently being short-changed are paid their super on time and in full,” Schubert said.

Unpaid super worsening

Superannuation is unpaid when an employee receives less than their full entitlement or none – law employers are required to contribute at least 11.5 per cent of worker earnings to super.

The SMC said that the amount of unpaid super has been growing and equalled $1800 for the average worker affected in 2021-22, which balloons to more than $30,000 by retirement age.

“The data also shows it is the lowest-paid workers who are more likely to be affected and either underpaid or not paid their super entitlements,” the SMC report said.

“Almost half of employees earning up to $25,000 are not paid their legal super entitlements and around 30 per cent of those earning between $25,000 and $50,000 are also affected.”

Bigger crackdown needed

The federal government has now passed legislation requiring super to be paid at the same time as wages – a key issue that the SMC says has driven the increase in unpaid super to date.

But the organisation says there’s more work to be done to ensure workers receive their legal entitlements.

That includes ensuring the ATO is taking a more “proactive approach” where businesses fail to pay workers.

The SMC wants stronger penalties for companies that break the law and targets for the ATO on the amount of unpaid super they should recover, with progress tracked regularly.

Then there’s the fair entitlements guarantee, which protects workers wages when their employer collapses or becomes insolvent.

The SMC wants the regime extended to superannuation as well, so workers receive the entirety of their entitlements.