The Northern Territory Government will have to pay millions in unpaid superannuation to thousands of public servants, while clawing back accidental overpayments to other highly paid staffers and more than a dozen members of Parliament.

Key points: More than 50,000 current and former public servants were underpaid an average of $350 per person

More than 50,000 current and former public servants were underpaid an average of $350 per person The NT Government said the problem was picked up after a clarification issued by the ATO this year

The NT Government said the problem was picked up after a clarification issued by the ATO this year The public employment commissioner said workers would be repaid entitlements with interest

Government workers were told by email on Thursday morning they could be affected by multiple payment errors, some stretching back up to 10 years.

About 16,000 current and 41,000 former public servants may have been underpaid, with an estimated $20 million in payments owed and $10 million in interest.

The average underpayment is estimated at $350 per person excluding interest.

Overpayments adding up to $6.5 million have gone to nearly 400 current and former employees earning over $220,000 a year, while $36,000 has been overpaid to 14 current politicians.

In the Northern Territory, about 21,200 out of its 247,940 people are public servants, meaning over 8 per cent of the population — and more than three-quarters of current public servants are impacted.

More than $30 million is owed in super payments to NT public servants. ( ABC News: James Dunlevie )

Taskforce set up to notify affected employees

Public employment commissioner Vicki Telfer said multiple errors were picked up after a clarification about one rule relating to leave loading was issued by the Australian Tax Office earlier this year.

"We take paying our people correctly — all of their entitlements — very seriously," she said.

The $30 million oversight impacts up to 57,000 past and present public servants. ( AAP: Joel Carrett )

"We are very sorry that this has happened for our employees and we are doing everything we can to fix it and make sure that we have corrected the situation."

She said a taskforce had been set up to coordinate repayments and notify affected employees about amounts owed over the next three months.

Ms Telfer also referred potentially affected employees to a website providing information on the underpayments and overpayments, as well as a phone hotline (1800 318 224).

Payment cap ignored on high-income public servants

The employment commissioner said many employers across the country had been affected by the ATO clarification around recreation leave loading.

But the update sparked an internal review that revealed multiple errors being made across five other payment categories by the Northern Territory Government.

Treasurer Nicole Manison will have to draw on Treasury's reserves to rectify underpayments. ( ABC News: Al Dowler )

The underpayments relate to errors in calculating recreational leave loadings, termination and redundancy notice payments, unpaid parental leave payments and super payments for acting Supreme Court judges over the age of 70.

The overpayments occurred because the cap on compulsory employer payments was incorrectly not applied to people earning over $221,080 and some current members of Parliament.

Ms Telfer said most of the overpayments were for "relatively small amounts" and that only payments made in the last three years and over $2,000 would be recovered.

"This is about being fair and reasonable to our employees," she said.

Repayments to come despite budget crisis

Asked where in the cash-strapped Territory budget the money for repayments would come from, Ms Telfer set funds had been set aside from "general reserves", rather than individual agency budgets.

A spokesperson for NT Treasurer Nicole Manison declined to take questions but said the bill had been factored into the recent mid-year budget update.

Mr Dean said it was possible the ATO might not slap the NT Government with penalties. ( ABC News: Sarah Jaensch )



Industry Super Australia CEO Bernie Dean said the underpayments were unacceptable.

"We've seen all across Australia that around one-in-three workers are being ripped off, not getting their legal entitlements to super and yet again we've seen not just a big business but a big government underpaying their employees on superannuation," he said.

"It's really important these businesses not just make good on the actual contributions, but also what people have missed out on in terms of investment returns.

"This is all about providing people with a dignified life in retirement by saving now."

Mr Dean said he was not confident the ATO would pursue the Northern Territory Government with penalties for the errors, despite having the power to apply a range of penalties to employers who short-change their workers on super.