NT government must pay back $30 million to staff super funds

Date: Dec 20, 2019

The government of the Northern Territory must pay back a total sum of $30 million to their staff after discovering in a legal dispute that it had been habitually underpaying employees’ superannuation funds. Due to misinterpreted laws, a number of staff members’ supers had been short a significant amount of cash over time, and the government will work to rectify the issue.

Background of the situation

Approximately 56,000 employees (both current and former) had gone underpaid, while some staffers were overpaid, thanks to misunderstood laws regarding recreation leave loading, termination or redundancy notice periods and parental leave periods.

The government has issued an apology and will issue a total of more than $30 million to the underpaid supers, meeting the correct amounts, plus interest. The issue was discovered when super advice was published by the Australian Taxation Office (ATO) centred around the application of superannuation to recreation leave loading, and the government reviewed its practices over the last 10 years.

Staff estimates that supers went underpaid by approximately $20 million, and they would have accrued around $10 million in interest in the last decade. Of the supers that were overpaid, those employees were given an extra sum of around $6.5 million total. The first $2,000 of the overpaid amount will be waived, while the rest must be paid back.

What can be done in similar cases?

In this case, the NT government realised its error, publicised the mistake and is making efforts to rectify the situation. But what can the average Australian do if he or she finds that an employer has been underpaying a superannuation fund?

Across the country, no matter the state or territory, issues regarding employers not meeting their super obligations should be reported immediately to the ATO. There is an online tool that makes reporting easy – whether it’s an issue regarding the payment amount, paying late or paying into the wrong fund. An investigation will be launched after the due date has passed. Moreover, reporting unpaid contributions may qualify you as a tax whistleblower, and you have the option to remain confidential.

In the meantime, you should also seek legal counsel. After all, superannuation funds can be crucial if you are off work and need to look for income protection or if your family ever needs to file death benefits claims. If your super has been underpaid, this could throw the future into uncertainty, so contact Gerard Malouf and Partners Compensation, Medical Negligence & Will Dispute Lawyers to consult with the team today.

Call us now on 1800 004 878 to book a free appointment with one of my compensation experts, or email your enquiry.