Unpaid superannuation

Hi All
Just would like share with you my unpaid super experience with my ex-employer.
My previous employer only paid a quarter of my entitled superannuation, I reported them to ATO via their online reporting system.
3 Month later, I received a call ATO confirmed that the employer under reported my income and they will chase the payment and deposit it to my super account.
I am very impressed that ATO actually looked into this and acted on it within just 3 month.
Just want to say, For anyone who is not getting their entitled superannuation paid correctly, please report to ATO. We are all working hard enough and we deserve what we entitled to. Small amount of unpaid supper, makes huge difference in 10, 20, 30 years time up to your retirement.

 

The super reporting obligations with STP are so transparent these days it is simply not worthwhile for employers to pay staff super late.

as an employer, and for our managed client payroll, I pay staff super with my staff wages. It helps with the cashflow and takes away the worry of late payments.

 

Hi Ross, I totally agree with you. I never expected any employer will underpay or withhold the super from their employee on purpose.
My previous employer was a very doggy business which that was why I left, there were several people calling everyday asking the business owner to pay overdue bills, even sending letter stated will take her to court. Some amount was as small as $70, was not paid the year before. Our fortnightly wage was always paid late. BTW the owner is a doctor!

 

Some states even class this as theft. It is stealing afterall.

 

Hi Terry
wow, that's big thing! I was expecting ATO would just leave it as it is, I read the information on the website saying it might take years to recover. That was why I was very surprised they actually dealt with it just in 3 month.

 

I have seen it. Sometimes it is neglect by the office manager, sometimes an addiction issue is involved or mental health, I have also seen internal staff deliberately mess up payroll to hurt their employer.

if an employer is doing it deliberately it is just plain stupid. The data matching is very good now and the penalties for not doing it properly can hit 200%.

it is good you got yours sorted. Shoddy employers should be held to account.

 

Interesting to know internal staff would deliberately do this to their employer! Surely staff were not treated well with respect.
200% penalty is awesome, doggy employer need it to wake up!
You are right, Ross. I used to work with a doctor who is addicted to gambling. He was either at work seeing patient or at the pokie.

 

Hi Geoff, sorry to hear that, I hope all is well for you now.
That was very sneaky for what he has done. Actually from what I know the business owner of my previous employer had history of bankruptcy too, surely they know how to play this "innocent" game with their greediness.

 

True, no point spending more time, money and energy on something has very little chance of success. If banks and ATO are after him, probably won't have anything left for you.

I always believe what goes around comes around! There is always a price to pay!

So the business is under his wife's name since he claimed bankruptcy, is he working there as an employee that earns wages? can he still be accountable for the owing super or the business is responsible which his wife need to pay?
I had a friend told me that his divorce lawyer can request payment from ATO of his ex wife's tax return to cover unpaid agreed child support, is that true?
If so, in that case, can the ATO take payment from his individual tax return to slowly pay back the amount he owes?

 

It is stealing in my view. A friend lost out on super. Small four person firm and super wasn't paid for about 18 months despite verbal promises by the boss. She was reluctant to take the matter up with the ATO as she was worried it'd cause the firm to go to the wall and the other workers would really lose out as she was in a better financial position than they were.

I suggested she put that aside as she realistically had fewer years of a working life left whereas they had 30 or so more years and her super was about her not the others. They went down the gurgle not long after and it was too late so all of them lost out.

 

Hi SatayKing
I totally agree with you.
so many people out there feel reluctant to report them due to personal reasons, and that's why sneaky business owner can get away and kept stealing other people's hard earned money.

 

Unpaid super will include 10% interest compounded back to BEFORE the relevant pay date. And when paid its not deductible to the employer either. Its not good enough for an employee to just receive what WAS due.

 

No. UNpaid family entitements are a Centrelink issue and the FAO (Family Assistance Office) can do a few things to ensure its paid and recovered. Unfortunately they will collect first and then pay whats owing. They can sieze tax refunds etc too.

A company director (or all of them!!) can be subject to a ATO issued Directors Penalty Notice that is personally enforceable even if the company goes under. Liquidation wont save it.

 

Who pays the 10%?

 

Hi, Paul, thanks for the reply. So if both parties of the divorced family don't get any payment from centrelink (actually very rich), can centrelink and FAO involve in if one party just simply don't pay the child support on purpose?

Am I interpreting it right? That means even with change of owner (such as from husband's name to wife's), both current or ex employee still able to chase the unpaid super by reporting to ATO?

 

Hi Optimus, I think the employer will have to pay the 10%. I remember the person I spoken to from ATO mentioned about interest, which will be paid to me on top of what was owed. But I wonder how they calculate it, as mine was not paid for several quarters.

 

Unpaid super made after 28 days following the end of quarter must be reported and paid through the ATO. If it was paid to the fund the amount paid is deducted from the total due. It doesnt "fix" the issue as without loodgement of the correct arrears the whole of the arrears is a potential liability despite it being paid. The unpaid element is also liable to Directors penalty notices.

The total due comprises:
1. The unpaid amount
2. An admin fee of $20 per employee per quarter
3. 10% Interest from the FIRST day of that applicable quarter to the date reported and paid. The ATO provide a excel spreadsheet which agents can upload which assists the calcs and also the lodgement so the debt its promptly accounted for. Tip...Do the first one then copy it and continually amend each copy. Its very repetitious.

Once the ATO receive ALL amounts they eventually settle with the employee. They will be contacted by the ATO although new laws changes allow the ATO to determine the fund and just pay it. They then advise the member. The fund typically also does, There is no extra interest for the ATO processing delays. They are now much faster than once...Still can be months.
Warning : All arrears and interest count to the memberconcessional cap based on the date received. The ATO dont share the view this is beyond the member control and so excess cap issues can occur.

After lodgement a unique ETF / Biller code is available and further interest may accrued. include Payments are non-deductible whether paid to the fund OR the ATO.

The super guarantee charge

 

Thanks for the information, Paul
When it says must be reported, does ATO automatically know employee having underpaid/unpaid super by their employer without reporting?

Pay to ATO?

Is it no longer 9.5% super anymore? I read the news saying the government is aiming 12% in the next few years, so is the employer paying extra % or employee need to contribute from their salary?