Fines for super shirkers on the rise
Fines issued to employers for not paying superannuation to their employees have quadrupled over the past five years, casting a pall over the ability of the super system to cope under choice of fund.
In the 2000 financial year, the Australian Taxation Office raised $82.46 million in superannuation guarantee charges. This jumped to $380.8 million in the 2004 financial year.
The charge is applied to employers who fail to provide a minimum level of superannuation support and is calculated at 10 per cent a year on the outstanding amount.
Australian Institute of Superannuation Trustees (AIST) president Susan Ryan said her organisation was concerned that employers weren’t paying super contributions and that the figures had jumped alarmingly.
Ryan said the growing rate of unpaid super did not bode well for choice of fund.
“The figures will get worse with choice as there will be even more confusion among employers over paying super,” she said.
The Association of Superannuation Funds of Australia principal researcher Ross Clare said while 90 per cent of employers complied with the superannuation guarantee contributions, the arrival of choice was going to make contributing more complex for employers.
“If it is a company with one employee, then choice is simple, but for companies with thousands of employees it is very complex,” he said.
“The problems may range from contributions being paid to the wrong fund or not paid at all… the compliance burden will grow.”
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