The Australian Taxation Office has recovered over $1 billion in unpaid superannuation entitlements for Aussie workers. The $1.1 billion sum reached the super funds of almost one million individuals during the 2024-25 financial year. ATO Deputy Commissioner Ben Kelly issued a stern warning to non-compliant employers. He stated that the Tax Office will take measures to safeguard employee entitlements.
The Australian Taxation Office recovered over $1 billion in unpaid superannuation entitlements
ATO Recovers Unpaid Super Through Enforcement
The ATO identified $800 million in super guarantee liabilities through enforcement actions. These actions included over 200,000 reminders and notifications. The Tax Office also conducted 15,000 audit investigations. Penalties exceeding $200 million have been issued to non-compliant employers. More than 20,000 stricter actions have been taken against offending employers. These actions include director penalty notices, garnishments, and legal proceedings.
Kelly emphasised the ATO’s commitment to worker entitlements. He stated: “The ATO collaborates with employers to assist them in meeting their tax and superannuation responsibilities, taking non-compliance with super guarantee duties very seriously.” Kelly added: “The ATO is dedicated to ensuring that workers in Australia receive their rightful entitlements. Employers must pay superannuation for eligible employees fully, punctually, and to the correct fund.”
ATO Deputy Commissioner Ben Kelly
Unpaid Super Disproportionately Affects Vulnerable Workers
The Super Members Council revealed that 3.3 million Australians missed out on $5.7 billion in super payments during 2022-23. This represents an average loss of $1,730 per person each year. The shortfall can result in workers being $30,000 poorer at retirement. Unpaid superannuation disproportionately affects vulnerable demographics. These include women, younger workers, and low-income earners.
The ATO has enhanced its detection methods. The Tax Office now uses Single Touch Payroll and data from super funds. The impending payday super reform will facilitate earlier detection of unpaid contributions. Workers can report unpaid super through the ATO’s online platform. They can also contact Fair Work Ombudsman for assistance.
Payday Super Reform Offers Retirement Boost
Major changes to superannuation contributions will take effect on July 1, 2026. Employers must pay super concurrently with salaries and wages under the new PayDay Super legislation. The government determined that more frequent contributions could boost retirement savings. A 25-year-old employee could receive an additional $6,000 in current dollars. A 35-year-old recovering unpaid super could see their retirement balance increase by over $30,000.
Kelly explained the reform’s benefits. He stated: “The implementation of Payday Super will enable the ATO to identify unpaid super sooner and take action to assist businesses in getting back on track. For those businesses reluctant to comply, the ATO will be able to act more swiftly to safeguard employees’ super entitlements.”
The ATO will adopt a measured approach during the initial transition year. Employers making genuine efforts to resolve issues will not face compliance actions. The Tax Office will distinguish between low-risk and high-risk employers.
High-Income Earners Face Potential Tax Trap
The transition period creates a potential issue for high-income earners. Workers maximizing contributions could face an unexpected tax bill. The overlapping timelines may cause 15 months of contributions to fall within one financial year. This could push contributors over the $30,000 concessional cap.
Mary Delahunty, chief executive of the Association of Superannuation Funds of Australia, highlighted the issue. She stated: “Because the ATO logs contributions on the date they are received in a member’s fund, these members might accumulate more than 12 months’ of concessional contributions in 2026-27 and reach the cap sooner than anticipated.”
Delahunty noted that transitional relief would require government and ATO intervention. She advised: “Any transitional relief would need to be addressed by the Australian Taxation Office and government. It is always wise for individuals with higher incomes, or those closely tracking their concessional contribution limit, to seek personalized advice regarding their tax matters.”
Mary Delahunty, chief executive of the Association of Superannuation Funds of Australia
Lost Super Accounts Total $19 Billion
The ATO revealed that almost $19 billion in lost and unclaimed super awaits collection. More than 7 million people have unclaimed super waiting to be reunited with them. The average amount of lost or unclaimed super is $2,590. This could grow to tens of thousands by retirement if left unclaimed.
Kelly described the importance of checking for lost super. He said: “Checking for lost or unclaimed super is like reaching into your pocket and finding a $50 note — it’s your money, you just didn’t know it was there.”
Approximately four million Australians hold two or more super accounts. This increases the risk of duplicated fees and lost balances. The Super Members Council reported that 21 per cent of Australians hold multiple superannuation accounts as of June 2025.
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Super Guarantee Reaches 12%
From July 1, 2025, the super guarantee increased from 11.5 per cent to 12 per cent. This represents the last scheduled increase to the rate. The super guarantee system began in the early 1990s at 3 per cent. The 0.5 percentage point increase alone could see a typical 30-year-old retire with $22,000 more. The increase from 9 per cent to 12 per cent over the past decade could add $132,000 in super savings for the average worker by retirement. The rate rise will mean an extra $317 in super contributions for the average Australian worker next financial year.
Retirement System Faces Silver Tsunami
Australia faces a “silver tsunami” of retirements over the next decade. The Super Members Council predicts 2.8 million Australians will leave the workforce. The annual number of retirees will double from 150,000 to 300,000. The collective amount retirees hold in super will double from $750-800 billion to $1.5 trillion.
The report warns that typical retirees could miss $136,000 over their retirement. This equals $6,500 per year unless system changes occur. More than 40 per cent of households approaching retirement now carry mortgage debt. The Association of Superannuation Funds of Australia estimates retirement savings needs. A couple requires $690,000 for a comfortable lifestyle. A single person needs $595,000.
