The Australian Taxation Office collected $1.13 billion in unpaid superannuation last financial year but workers are still out of pocket by as much as $3.6 billion, according to the regulator’s figures.

Of that figure, only $685 million was won back from recalcitrant employers, with another $445 million being paid voluntarily by bosses who didn’t wait for the tax man to come knocking.

Of the $685 million clawed back by the ATO, only $528 million was actually unpaid super, with another $157 million accounted for by ATO penalties for non-payment.

All of the $1.13 billion pulled in by the ATO was passed on to 216,000 super fund members owed the money.

Overall estimates put together by Industry Super Australia back in 2020-21 and seemingly matching the ATO’s figures show that each year, 2.9 million Australian workers are losing $4.8 billion in unpaid super.

Over eight years that could be as much as $38 billion.

A big super gap

So while the ATO lifted its game last year, there is still $3.6 billion in unpaid super owing to about 2.68 million workers. Therefore, many are still missing out.

“Getting back $700 million in unpaid super was a good start,” said Gerard Brody, acting director of Super Consumers Australia.

A boost in funding for the ATO to chase super non-payment in the current year would help improve the situation further, Brody said.

ATO deputy commissioner Emma Rosenzweig said while most employers are doing the right thing, the ATO takes non-compliance with super guarantee obligations seriously.

“Super belongs to employees for their future retirement savings and we do everything we can to ensure Australia’s hard-working employees are receiving their lawful entitlements from their employers,” Rosenzweig said.

But according to the ATO’s figures, 5.1 per cent of all super obligations are not being paid to workers and last year’s increase in involuntary collections from recalcitrant employers amounted to only 14.3 per cent of unpaid super for the year. So many workers are still missing out.

Judging from earlier releases, the ATO appears to have got its hands on more unpaid super by using its debt recovery powers, which were hamstrung during the pandemic.

However, there is clearly still much more to do, with research showing that underpayment of super is likely to leave those between 60 and 64 with balance deficits of more than $40,000.

“The government’s other proposed reform of aligning pay day with super payments should really help address this issue because it will be much clearer to the ATO if there is underpayments,” Brody said.

“They will see it in the data quickly if super has not been paid on pay day.”

The government has put out a discussion paper on implementing pay-day super payments and is expected to legislate the measure when the process is completed.

Where the superannuation savings are

Superannuation figures released by APRA for the June year show that overall superannuation assets rose 7.6 per cent to $3.54 trillion over the year.

The total for APRA regulated funds jumped 9.3 per cent to $2.45 trillion. That means the attractiveness of self-managed super funds for the wealthy seems to have dropped somewhat because SMSF balances increased only 3.9 per cent to $876.4 billion.

An ageing population is starting to make itself felt with net contributions to superannuation falling by 4.5 per cent to $60.8 billion as older people increased their withdrawals.

The decline was driven by the fact that withdrawals from super grew at 19.6 per cent, while contributions grew at the lesser figure of 12.9 per cent.

The MySuper default superannuation allocations have the majority of members, 14.3 million, but they hold less in assets than the choice products.

Choice funds have 7.5 million accounts, but they have $1.113 trillion in assets compared to only $911 billion for the default allocations.

Clearly older and wealthier people are more likely to make their own choices on super funds.

Although older people have higher superannuation balances, APRA figures show that many do not have balances at a level that would enable them to enjoy a comfortable retirement according to the Association of Superannuation Funds of Australia.

ASFA says a home-owning couple would need $690,000 at age 67 to retire in comfort while a home-owning single would need $595,000.

APRA figures show that the average balance in that age group is $247,400.

However, given many people retire as couples and APRA only accounts for singles then more people than shown would be approaching that comfortable standard.

The New Daily is owned by Industry Super Holdings