Unpaid super affects more than a quarter of employees, costing each affected worker an average of $1,700 per year. In 2018-19, Australian employees missed out on a total of $5 billion in employer super contributions. Young workers, and those on low wages or working in construction, transport, trades, hospitality and accommodation, are most likely to be underpaid super.

The impact of unpaid super on workers is clear and long-lasting: less money to retire on, greater reliance on the age pension – a bill the taxpayer picks up – and, for many, the risk that critical insurance policies tied to super will lapse.

The government’s attempts to fix the problem have so far failed to put a significant dent into the total amount of unpaid super, which has been at least $4.5 billion a year over the past six years. While most employers do the right thing, those who do not cause significant harm to individual workers and, ultimately, to all taxpayers. They also gain an unfair business advantage over employers who do meet their obligations to pay super.

The research carried out for this report points to four policy reforms that can help ensure Australian workers are not deprived of their employer super contributions and that honest employers are not penalised or disadvantaged when they meet their legal obligations to their employees. They are:

• Mandate payment of super on pay day
• Enforce penalties for employers who do not pay super
• Facilitate other actors to assist in recovery
• Extend the Fair Entitlements Guarantee to cover SG contributions