Cbus Super welcomes unpaid super measures to stop workers losing out on returns
2 May 2023
Cbus Super welcomes the announcement by the Federal Government that the Budget will include measures to legislate the payment of super on pay day.
Cbus has long advocated for a legal avenue for all workers to recover unpaid super, as already exists for recovery of unpaid or underpaid wages, and for measures to prevent it in the first place.
Cbus is the only super fund to have made a submission to the Senate Education and Employment Committee’s inquiry into the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 which would see super included in the National Employment Standards.
Cbus Acting CEO Kristian Fok said, “We welcome measures on pay day super. Non-compliance with the Superannuation Guarantee (SG) has been a steady leak in Australia’s retirement system.
“The most insidious aspects of superannuation non-payment for our members are the compounding financial effect over time and critical insurance for workers in hazardous jobs lapsing after 16 months of non-payment.
“We believe policy change in this area is critical to ensure members are paid their full entitlements and have the opportunity to benefit from their superannuation long term.
“Unpaid super is unfortunately common in the building, construction and allied industries, and this has a significant impact on the retirement savings of many Cbus members.
“We are proactive because our efforts lead to a better chance of recovery. We recovered $106 million last financial year.
“We welcome moves by the Government to include a right to super in the NES. More can and should be done via system settings to deliver better outcomes with firmer and more proactive approaches to investigating and recovering unpaid super.
“Achieving the goal for all working Australians to achieve a dignified and financially secure standard of living in retirement (supplementing or substituting the Age Pension) relies on regular contributions over the course of a person’s working life, to maximise the effects of compounding growth and prudent investment strategies by superannuation funds.
“To mitigate investment losses, we ask in our NES submission that that an order for compensation can include both unpaid superannuation and loss of returns on the unpaid superannuation.
“Compensation should extend to loss of insurance benefit if the failure to pay super leads to a suspension of cover and the member suffers an insurance event, a huge risk for our members in hazardous work. Every week our Workplace Coordinators are meeting with members who have lapsed insurance and are undertaking hazardous work – for example, working from heights. This is an unacceptable situation.
“The issue of unpaid super is not just a problem for workers, it penalises the majority of businesses who are doing the right thing and also represents significant lost government revenue and an increased reliance on the Age Pension.
“Pay day super is a practical reform. Modern payment processes support this change. Contributions should be in accounts and generating retirement income.”
Cbus is the industry leader on action on unpaid super and advocacy for our members on the issue.
With the support of our sponsoring organisations, Cbus recovered $471 million in unpaid super on behalf our members over the last five years. Cbus has collected $79 million in unpaid super from 9,654 employers on behalf of 81,025 members during this financial year to date.
The construction industry is the second highest source of complaints to the ATO about unpaid superannuation and nearly one in five corporate insolvencies that involve unpaid superannuation are in the construction industry.
Cbus recommends in the submission new laws that treat superannuation payments like wages:
- Super on pay day will be a further improvement to Cbus being a ‘monthly fund’ (Requiring active employers to contribute super monthly, this helps the fund identify and tackle non-compliance early. Monthly contributions have ensured investment earnings are applied to members’ super as soon as possible).
- That an order for compensation can include both unpaid superannuation and loss of returns on the unpaid superannuation (Industry Super Australia estimates that compounding cost to a member could be up to $60,000 in savings by retirement .)
- Compensation should extend to loss of insurance benefit if the failure to pay super leads to a suspension of cover and the member suffers an insurance event.
- Unwinding of ‘stapling’, a measure which leaves workers in building, construction and other occupations that are at the highest risk for unpaid super, worse off.
- Expand the Fair Entitlements Guarantee (FEG) to include superannuation.
- That the ATO should take a stricter and more proactive approach to investigating and recovering unpaid super and ultimately imposing penalties on those who do not meet their SG obligations.
- That the ATO regularly publish aggregated and anonymised data on non-payment of superannuation, including by industry, to allow the issue to be continually monitored.
- Government already collects all the information required to identify non-payment and underpayment of super. The Government should, where members consent, share relevant information directly with a member’s superannuation fund.
Cbus has collected $78,979,002 in unpaid super from 9,654 employers on behalf of 81,025 members during this financial year to date. Last financial year Cbus collected $106,604,052 from 16,343 employers on behalf of 126,086 members. Over the past 5 years, Cbus has recovered $471 million in unpaid super for its members.
Media enquiries: Elisabeth Bowdler, 0412 112 374, firstname.lastname@example.org
This information is about Cbus Super and doesn’t take into account your specific needs. You should look at your own financial position, objectives and requirements before making any financial decisions. Refer to Cbus Product Disclosure Statement, Target Market Determination and Financial Services Guide for more information. Contact us or visit cbussuper.com.au for a copy.
Cbus is a leading Industry Super Fund representing those that help build and maintain Australia. As one of Australia’s largest super funds, we provide superannuation and income stream accounts to more than 875,000 members and we manage more than $73 billion of our members’ money (as at 31 December 2022). Our members include workers and retirees, their families and employers. As of April 2022, Cbus merged with Media Super and offers Media Super products. For more than 30 years Media Super has been the industry super fund for Print, Media, Entertainment and Arts, and broader creative industries.
United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 as Trustee for the Construction and Building Unions Superannuation Fund ABN 75 493 363 262 (Cbus Super).
Australian Taxation Office, answers to questions on notice, W4, September 2020, Senate Economics Reference Committee Inquiry into the unlawful underpayment of employees’ remuneration.
View the Industry Super Australia Unpaid Super Report 2021.pdf