Unpaid superannuation is a systemic issue costing one in four Australian workers a total of $5.1 billion in a year. Its impact is most keenly felt among many of the Australian workforce’s more vulnerable groups – younger Australians on lower wages, people in insecure work, lower-paid women, and migrant workers – exacerbating existing inequities. 

This report highlights what’s at stake in fixing unpaid super and provides policy detail to ensure that the super owed to Australian workers is paid to them on time and in full. The report sets out the latest data on unpaid super and how it affects workers of different ages, genders, and occupations.

Australia’s almost $4 trillion superannuation system is one of the most effective retirement schemes in the world; it covers around 90 per cent of employees, with median balances of around $200,000 for workers nearing retirement. With this success also comes a responsibility to keep improving super, ensuring its benefits are enjoyed by as many Australians as possible. 

Unpaid super is when an employee is paid less than their full super entitlement or not paid super at all. The $3.9 trillion super system is delivering financial security to millions of Australians, but the success of the system rests on employers paying their workers’ super contributions on time and in full. This is not always the case, and this report examines the major drivers of unpaid super – including poor payroll management, insolvency, and deliberate wage theft. 

Recommendations

1. Implement payday super in full and on time, underpinned by strong, meaningful legislation.
2. Improve the enforcement regime with a more proactive approach, stronger penalties and full use of the ATO’s digital capabilities.
3. Extend the Fair Entitlements Guarantee  by including super in the workers compensation scheme of last resort in cases of insolvency.