Stolen super returned to workers
More than half a billion dollars will be repaid to almost 400,000 Australian workers after 24,000 business admitted to underpaying staff.
Under the Federal Government’s superannuation guarantee amnesty, 24,000 businesses confessed to failing to pay employees their entitlements before the September 7 deadline.
New Australian Taxation Office figures show at least 393,000 employees will have money paid into their super funds, or their bank accounts if they are no longer working.
Assistant Superannuation Jane Hume said employers had disclosed and repaid $588 million in unpaid contributions, including 10 per cent interest for each year the money was outstanding.
“The superannuation amnesty has been a very successful initiative, reuniting Australians with money that in many cases they didn’t even know they were owed,” Senator Hume said.
About 55 per cent of businesses that confessed not to making compulsory payments dating back to July 1992 applied in the last week of the amnesty.
This included 7000 on the final day, as payments made before the cut-off were tax deductible.
A further $33 million in contributions are subject to payment plans established to help businesses struggling during the coronavirus pandemic.
Meanwhile, Australian Prudential Regulation Authority figures released on Monday reveal $33.3 billion has been withdrawn from the country’s retirement pool as part of coronavirus support.
As of September 13, 4.5 million applications had been lodged with the Australian Taxation Office for early release of super, equating to $34.2 billion, and 1.3 million applications are from people who have made a repeat claim.
The federal government implemented the early release scheme in April to support Australians who have experienced financial hardship due to the pandemic.
It allows fund members to access up to $20,000 in both the 2020 and 2021 financial years.
Major industry funds are experiencing the largest haemorrhage from the scheme, with five major funds collectively paying out $16.2 billion to members.
AustralianSuper has been sapped of $4.6 billion, the hardest hit of any other super fund. It has paid out 587,763 applications at an average payment of $7679.
Sunsuper has dished out $3.4 billion to more than 330,000 members, while retail workers fund REST has been siphoned of more than $3.1 billion.
Hostplus and Cbus have paid out $2.9 billion and $2.1 billion respectively.
Industry Super Australia (ISA), which represents 15 funds, said previously close to 500,000 Australians had wiped their retirement balances to zero through the scheme.
In early September, ISA said the early release scheme would lead to rising aged pension costs if accounts accessed were not replenished with new contribution payments.
“People know that by up-ending the whole purpose of super and then cutting contributions, the government is thinking about the short term and ignoring how it will lumber people with tax hikes to support millions more scraping by on the pension,” ISA chief executive Bernie Dean said.
“Rebuilding balances now is critical to avoiding the worst impacts of higher taxes, less in retirement and a slower economy.”