Nearly $700 million redistributed after ATO recovers more than $1 billion in unpaid super

Aussie workers who missed out on their proper superannuation entitlements last financial year have now been reimbursed – to the tune of almost $700 million.

The “redistribution” comes after the Australian Taxation Office (ATO) tracked down employers who hadn’t paid super properly in the 2022-23 financial year.

The ATO collected more than $1.13 billion from errant employers after taking action to collect unpaid super.

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And the tax office has now been able to redistribute $683.8 million in unpaid super to individuals and super funds.

Although the ATO had to hound many employers to recover the monies, other employers realised they had made an honest mistake – and fessed up to not having paid.

“Super belongs to employees for their future retirement savings,” said ATO Deputy Commissioner Emma Rosenzweig.

“We do everything we can to ensure Australia’s hard working employees are receiving their lawful entitlements from their employers.”

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Of the total money collected by the ATO, $157 million came via the super guarantee charge (SGC) — a penalty imposed on employers by the ATO for not properly paying employees’ super.

Employers that do not pay super in full, on time, and to the right fund are liable for the SGC — which is often more than the super they otherwise would have paid, and is not tax-deductible.

The ATO completed about 14,000 super guarantee audits in the 2022-23 financial year, issuing about 134,000 reminders and prompts.

The money obtained through these audits amounted to more than $528 million in liabilities, and $157 million in penalties.

Additionally, 56,000 employers came forward and voluntarily disclosed an additional $445 million in liabilities, bringing the total money collected to $1.13 billion.

These funds are retained by the ATO and form part of the Government’s Consolidated Revenue Fund (CRF), an ATO spokesperson confirmed.

The ATO collected more than $1.13b last financial year, through action taken over unpaid super. Credit: Getty Images

Rosenzweig said unpaid super was a “red flag” for businesses.

“Unpaid super not only affects employees’ entitlements but it also raises other red flags that a business may not be viable,” she said.

“If you’re an employer who is struggling to pay super, we recommend you reach out to us or your registered tax professional quickly to help avoid getting into a situation you can’t resolve.

“The earlier you engage, the better the outcomes for you and your staff.

“We know that mistakes can happen, but it’s our responsibility to ensure a level playing field for all businesses.

“The sooner we know about unpaid super, the greater chance we have to recover it and work with the employer to get them back on track.”

‘Get in touch’

If employees believe they aren’t being paid their super, Rosenzweig says they should get in touch with the ATO as soon as possible.

“Employees can contact their super fund for the most recent information about their account,” she said.

“We encourage employees to get in touch with us as soon as possible if they believe they aren’t being paid their eligible super.

“We review and respond to every notification of unpaid super received from an employee.

“This process can take some time, and we can’t promise we’ll be able to recover all your unpaid super, but we’ll do our best and keep you updated along the way.”

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