Unpaid super adds $100m in Age Pension costs

unpaid-super/federal-budget/age-pension/

2 May 2017
| By Jassmyn |
image
image
expand image

Employers who dodge compulsory superannuation requirements are robbing workers of their retirement savings but also adding to the fiscal cost of the Age Pension, according to Industry Super Australia (ISA).

ISA said unpaid super costs workers $24,000 by retirement and the Government footed an extra $100 million in Age Pension costs a year.

ISA public affairs director, Matt Linden, said all Australians were impacted by rogue employers who avoid paying the super guarantee (SG).

“These costs will grow over time unless urgent action is taken to address unpaid super,” Linden said.

“Unpaid super is an easy fix for government. They could align SG payments with wage cycles; extend single touch payroll coverage to all employees; or tighten enforcement and penalty regimes.

“Both the senate committee and an inter-agency group established by the Financial Services Minister have been working on this for five months. The ducks should be lined up and ready to go.”

ISA called on the Government to address the unpaid super issue at next week’s Budget and estimated annual super pension drawdowns were $300 million per annum less than they otherwise would be, costing the Government $98 million in extra Age Pension payments.

“Australians, especially those who’ve been through the heartache of unsuccessfully chasing down what’s owed to them, expect our national leaders to act decisively,” Linden said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS