Super funds raise alarm on contributions being dropped from payslips

Updated

Industry Super Australia has raised concerns about the repeal of a provision that requires super contributions to be shown on payslips.

The body that represents not-for-profit employer-union funds, has said one of the Federal Government's red tape repeal measures introduced to Parliament this week means that employers will no longer have to tell staff how much super has been paid into their account.

It argues that, currently, the Superannuation Industry (Supervision) Act requires employers to include their super contributions on payslips, including how much is being paid and when.

"Super is, of course, part of people's income - people are required to put 9.5 per cent of their wages into the super fund, but the employer will no longer be required to list that this super fund payment has been made," Industry Super Australia (ISA) chief executive David Whiteley told ABC News Online.

Industry Super claims 'incorrect'

However, the Federal Government has told ABC News Online that Industry Super is mistaken in its claims.

The office of the Employment Minister, Eric Abetz, said there are no regulations attached to the legislative provision in the Superannuation Act, making that provision inoperative.

That means the Fair Work Regulations are the only effective Commonwealth rules currently requiring employers to put superannuation contributions on payslips.

"Recent reports in the media that the Government is planning to scrap the compulsory disclosure of superannuation on employees pay slips are incorrect," said Employment Minister Eric Abetz in a statement.

"Superannuation is no different to wages – employees are entitled to know what they are paid and required to be paid.

"The Government has no plans to change the existing arrangements under the Fair Work Regulations."

Industry Super has responded to the criticism.

Its senior policy adviser and legal counsel Richard Watts argues the key issue is that the previous government had made moves towards ensuring that employees had the right to know when super is paid, not just how much should be paid.

He said that, rather than bring in the missing regulations, the current Government has moved in the opposite direction.

"The key issue here is that it was previously decided that employee should have the right to know when super is paid and under guise of red tape this important protection is being removed," he wrote in a response to ABC News Online.

Rules require amount owed, not necessarily amount paid

However, this raises the prospect that employers are not currently compelled to inform employees on their payslips about how much is being contributed to their super funds.

The Fair Work Regulations only require that the employer declare either the amount of the contribution that was made to the super fund or the amount of the contribution that will be made.

If the employer chooses the latter option, there is no requirement that the employee be alerted on their payslip when that contribution is actually paid into the fund, if it is indeed paid into the fund at all.

The Finance Minister, Mathias Cormann, told ABC News Online that the previous Labor Government had wanted to add an additional requirement to specify the date they expected to make the super payment as well as the amount.

He said in a statement that this was, in the Government's view, an unnecessary regulatory burden.

"This change would have required employers to invest in major upgrades in their payment system software with minimal benefit to their employees," he commented.

"Furthermore, while the previous Labor government announced this change, they never actually gave effect to it in specific regulations, which were to set out the detail for that additional reporting. As such, the enabling legislation is redundant and will be repealed."

However, Industry Super's Richard Watts said the argument about cost to businesses is a furphy.

"Regarding the major burden and software difficulties cited, it is believed that major software accounting packages were expecting to implement patches to their existing software," he responded.

Not all workers covered by Fair Work

The Fair Work Act does not cover most state and local government workers as well as many private sector workers in Western Australia.

However, the Federal Government says there would be state employment law provisions that cover these workers.

Regulations are also able to be changed or repealed by a government at any point in the future without the approval of Parliament, although the Parliament can then vote to disallow any regulatory changes.

Mr Whiteley said his main concern is that some employers, especially in hospitality and construction, do not always make regular contributions to their employees' super funds.

"We know that this affects well in excess of 600,000 employees each year. We know that, in aggregate, $2.5 billion of super contributions aren't paid each year," he said.

Mr Whiteley argued that the change will mean that many of these staff may not realise their super has not been paid until they receive their fund's statement months later, if at all.

"There is very considerable disengagement amongst the Australian community with their super, particularly amongst younger people," he said.

"We often find that people have got numerous accounts, often people do not inform their super fund when they move house, so when they move house they stop receiving their statements, so it could well be that people could well not be aware that they're not even receiving the 9.5 per cent super that they're entitled to."

However, it appears that there is no effective change to the law, and employers are not currently under any legal requirement to declare the actual amount contributed to super funds.

Topics: superannuation, consumer-protection, work, regulation, federal-government, australia

First posted