More than 80 per cent of unpaid superannuation [amounting to several billion dollars annually] remains unrecovered in Australia, with the Australian Taxation Office (ATO) rarely imposing penalties on employers who fail to meet their obligations. Speaking to ABC News, Richard Aichinger, a New South Wales resident, says his 19-year-old son, a second-year electrical apprentice, has not received any superannuation payments from his employer for over 12 months. Despite reporting the matter to the ATO in early 2024, the issue remains unresolved. “They just keep getting the answer that, ‘Yeah, they

More than 80 per cent of unpaid superannuation [amounting to several billion dollars annually] remains unrecovered in Australia, with the Australian Taxation Office (ATO) rarely imposing penalties on employers who fail to meet their obligations. Speaking to ABC News, Richard Aichinger, a New South Wales resident, says his 19-year-old son, a second-year electrical apprentice, has not received any superannuation payments from his employer for over 12 months. Despite reporting the matter to the ATO in early 2024, the issue remains unresolved. “They just keep getting the answer that, ‘Yeah, they’ll be paying it soon,’” Mr Aichinger told

ABC News

. “He's very annoyed about it. But being young and straight out of school, it’s something he shouldn’t have to confront. He probably feels a bit intimidated even reporting it — he’s concerned about job security.”

Super Rate Increases to 12%

Effective July 1, Australia’s compulsory superannuation guarantee will rise from 11.5 per cent to 12 per cent of a worker’s ordinary earnings. Employees can monitor their super contributions via the myGov portal or through their super fund. Australia’s mandatory retirement savings system is projected to become the second largest globally within five to seven years [behind only the United States] overtaking the UK and Canada, despite the country’s relatively small population. But the growth depends heavily on employers paying their dues.

Weak Penalties, Low Recovery

Misha Schubert, CEO of the Super Members Council — the peak body representing industry super funds — criticised the ATO for failing to clamp down on delinquent employers. “The ATO needs to be a strong cop on the beat and really lift the bar on its compliance and recovery efforts,” Ms Schubert said. “Every week in Australia, $100 million owed in super fails to reach workers’ accounts.” According to the council’s 2024 report, approximately 2.8 million Australian workers are shortchanged on super each financial year, with an average underpayment of $1,810 per affected individual. In the 2020–21 financial year, the ATO recovered only 17 per cent of the estimated $4.7 billion in unpaid super. Of the 9,594 penalties issued that year, just 43 per cent  or 4,124 cases, included any monetary penalty beyond requiring repayment of the withheld super. A Senate Estimates hearing recently revealed that fewer than 1 per cent of offending businesses were hit with the maximum 200 per cent penalty permitted under the law.

ATO Defends Its Record

In response to mounting criticism, an ATO spokesperson insisted the agency is actively addressing the issue. “The ATO takes non-compliance with superannuation seriously. We have a focused review and audit program into the non-payment of the super guarantee to protect workers and their retirement savings,” the spokesperson said. Recent ATO data shows the agency received approximately 28,100 referrals about unpaid superannuation from employees and resolved 23,600 of those cases. The resolutions led to $659 million in super payments and $300 million in associated penalties. The ATO also reported issuing 167,000 reminders or “prompts” to employers, resulting in $240 million in additional super recovered. However, it did not disclose how much each employee typically received or how many employers were penalised. As the superannuation guarantee rate increases, pressure is mounting on the ATO to crack down on non-compliant employers and ensure that all Australian workers receive the retirement savings to which they are legally entitled.

ABC News contributed to this article. 

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