ATO and unpaid super

A report from the Australian National Audit Office (ANAO) has found that the Australian Taxation Office (ATO) has failed to collect billions in unpaid super from non-compliant employers.

The Superannuation Guarantee (SG) is a fundamental means of funding the retirement income goals of Australians. The great majority of employers have complied with their SG obligations—a very encouraging 95%. However, there are some that have failed to meet their SG obligations due to inadequate systems or processes, or lack of awareness.

In the long term, this kind of non-compliance can have a negative impact on retirement outcomes, especially for those on low incomes. The expectation is that the ATO will be proactive in recouping unpaid SG and imposing penalties where appropriate.

While the ATO has a number of measures in place, the report revealed “a shift from resource-intensive audit activity to low-touch nudges.” The resulting numbers are revealing… less than 15% of unpaid super has been collected annually. What’s more, the ATO can impose a tax called the Superannuation Guarantee Charge on employers that failed to pay super. The report found that the ATO was owed $2.9 billion in such tax as at 30 June 2021.

The report made three recommendations: implementing a preventative compliance strategy, use of enforcement and debt-recovery powers, and enhanced performance reporting. It stated that the ATO agreed to two recommendations, and agreed with qualification to the third.

How does this impact you? Generally, employers pay SG contributions every quarter. It’s worth checking your super account to see that these payments are coming in regularly. If you have any questions, you can raise it with your Payroll/HR team, with us, or the ATO.

Find out more about the ANAO’s findings and recommendations, and the ATO’s response

Issued by Total Risk Management Pty Ltd ABN 62 008 644 353, AFSL 238790 (TRM) as the trustee of the Russell Investments Master Trust ABN 89 384 753 567. Resource Super and Nationwide Super are divisions of the Russell Investments Master Trust. This article provides general information only and has not been prepared having regard to your specific objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation and needs. The information has been compiled from sources considered to be reliable, but is not guaranteed. Any examples have been included for illustrative purposes only and should not be relied upon for the purpose of making an investment decision. Past performance is not a reliable indicator of future performance. The Product Disclosure Statement (PDS) can be obtained by phoning 1800 555 667 or by visiting russellinvestments.com.au or for Nationwide Super by phoning 1800 025 241 or visiting nationwidesuper.com.au. Any potential investor should consider the latest PDS in deciding whether to acquire, or to continue to hold, an investment in any Russell Investments product. The Target Market Determinations for the Russell Investments Master Trust are available on our website. The Financial Services Guide for the Russell Investments Master Trust is available on our website or on the Nationwide Super website.  

Russell Investment Financial Solutions Pty Ltd ABN 84 010 799 041, AFSL 229850 (RIFS) is the provider of MyTracker and the financial product advice provided via GoalTracker Plus. TRM and RIFS are part of Russell Investments. Russell Investments or its associates, officers or employees may have interests in the financial products referred to in this document by acting in various roles including broker or adviser, and may receive fees, brokerage or commissions for acting in these capacities. In addition, Russell Investments or its associates, officers or employees may buy or sell the financial products as principal or agent. If you decide to purchase or vary a financial product, Russell Investments and/or other companies within the Russell Investments group of companies will receive fees and other benefits, which will be a dollar amount or percentage on the value of your investments and/or your insurance fees. You can ask us for more details. General financial product advice is provided by RIFS or Link Advice Pty Ltd (Link Advice) ABN 36 105 811 836, AFSL 258145. Limited personal financial product advice is provided by Link Advice.  

This work is copyright 2022. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of Russell Investments.