Payday super ‘couldn’t come soon enough’, says Cbus
The fund has reported a record recovery of almost $200 million in unpaid super over the last financial year.
Cbus Super collected a total of $198.2 million in unpaid super during the 2023–24 financial year that will directly impact superannuation members, according to Super Members Council research.
The fund said payday super couldn’t come any sooner as it continues to recover a significant amount of unpaid super for members.
According to the fund, the shift to payday super would help employers smooth their payroll and avoid the build-up of liabilities over a quarter that they may struggle to meet.
Over the past five years, Cbus has recovered over $600 million in unpaid super for over 665,000 members.
Research conducted by the Super Members Council revealed that 41 per cent of labourers are impacted by unpaid super, followed by 36 per cent of machinery operators and drivers and 31 per cent of technicians and trade workers.
Cbus deputy CEO and chief member officer Marianne Walker said that the recovered money would collectively be worth billions for members in retirement down the track.
This is because it restores the crucial part of saving for retirement due to the compounding financial effect over time.
“Recovery of the $200 million in unpaid super this past financial year, a legal entitlement for workers is an example of the significant impact across the country on retirement savings,” she said.
“Cbus is able to recover more unpaid super for our members through our unique member service offering including face-to-face contact at the workplace.”
Despite some individuals gaining an unfair advantage by avoiding their legal obligations, Cbus said it is important to recognise that most employers do the right thing by paying super to their employees.
Recovering unpaid super is an important action conducted by the fund that is further highlighted by the current high number of business insolvencies, resulting in many employees being left with unpaid entitlements such as super.
Walker said unpaid super can also impact members involved in hazardous work.
“Insurance cover through superannuation lapses after 16 months of non-payment,” she said.
“Too often our workplace coordinators are meeting with members who have lapsed insurance following a period of unpaid super.
“Unpaid super puts at risk this critical insurance cover for members working with heavy machinery and at heights.”
Ahead of the implementation of payday super commencing in 2026, Cbus Super has recommended the expansion of the Fair Entitlements Guarantee safety net to include superannuation.
Cbus said this is necessary to better protect the retirement outcomes of Australian workers who are at risk of losing entitlements due to business insolvencies.
The fund has also recommended that ATO be supported in taking a stricter and more proactive approach to the investigation into unpaid super.
Cbus believe penalties should be imposed on those who do not meet their super guarantee obligations.
The ATO should also publish aggregated data on unpaid super on a regular basis to allow the issue to be constantly monitored, according to the fund.
