SABRA LANE:
The Australian Tax Office is cracking down on dodgy employers who short-change staff on their compulsory superannuation contributions. The ATO’s first ever audit of the super guarantee shows that since 2009 workers have missed out on $17 billion that should’ve gone to retirement nest eggs. While most employers do the right thing, unscrupulous bosses who hold back super now face much tougher fines. Here’s the ABC’s senior business correspondent, Peter Ryan.
PETER RYAN:
To use ATO jargon, it’s the superannuation guarantee gap that’s the difference between the value of the 9.5 per cent super guarantee employers are required to make by law, against contributions employers actually send to retirement funds. Since 2009, the gap has hit $17 billion – super that for one reason or another was unlawfully held back by sometimes unscrupulous employers. They’re now in the spotlight more than ever, warns the ATO’s Deputy Commissioner for Superannuation, James O’Halloran.
JAMES O’HALLORAN:
Look, any level of non-compliance is of concern given the impact it has on employees, but we have 150 staff at least doing super guarantee work full time and they’ve been relatively successful.
PETER RYAN:
Now, in the first instance, you’re trying to better educate employers about their responsibility under the law, but at what point does that education turn into enforcement, where you take these dodgy employers to court?
JAMES O’HALLORAN:
So the main issue is, if we find it’s intentional disregard, we will in fact apply penalties and take people to court as necessary. And there is a penalty regime up to 200 per cent of the outstanding amount of super guarantee. There’s also an ongoing what’s called an administrative charge.
PETER RYAN:
So employers who don’t think that they have to honour this obligation could find themselves in hot water and get a call from the ATO?
JAMES O’HALLORAN:
Yes, and certainly the main thing is, of course, the real impact on employees for their long-term futures.
PETER RYAN:
The Tax Office was pressed into greater action last year amid claims that around a third of Australian workers were being ripped off by employers who hold back some or all of their superannuation entitlements. It’s been a hot issue for the Federal Government, but the Financial Services Minister, Kelly O’Dwyer, says the ATO is getting more money to haul employers into line with tougher penalties.
KELLY O’DWYER:
The Government’s very concerned about any employee who loses out on their superannuation entitlements. It is illegal and those workers are being robbed of their wages.
PETER RYAN:
Some employers have made honest errors here but others, as you say, have blatantly ripped their workers off.
KELLY O’DWYER:
That’s right, and under the Government’s new changes those employers will face the full force of the law. They will find themselves, for the first time, being directly responsible, as directors of the company, for their employees’ superannuation accounts and they will be required to pay it. And the ATO will have a new ability to seek court-ordered penalties in the most egregious of these cases of non-payments and they will be able to secure assets and security bonds for high-risk employers.
PETER RYAN:
The ATO says it’s been able to claw back around $2 billion since 2010, but it’s hoping a requirement for employers to report their super payments more frequently will rein in rogue employers and boost retirement nest eggs.