The Australian Government reckons there is $20 to $30 billion in unpaid superannuation. Industry sources claim a further $5 billion is unpaid every year.
Superannuation legislation started in July 1992. In principle, anyone who operates as a sole trader (not a partnership or a company) and is paid more than $450 a month for their labour, must also have superannuation paid.
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It doesn’t matter if you were a contractor-for the purposes of super you are treated as an employee.
Unpaid super also attracts interest at the rate of 10 per cent per year.
There is no time limit to claiming unpaid super, but there are some pitfalls. You must not have the right to engage/employ any other person (whether you do or not).
Kaizen’s first step is to assemble the documents to establish the claim.
Collecting the cash
When Kaizen have all the necessary documents, it makes a claim on the employer. If the employer disputes the claim, Kaizen can lodge the claim with the Australian Tax Office (ATO). The ATO is a big bureaucracy and can take two to three years to finalise a claim.
Recently, Kaizen recovered $388,000 from Sydney Trains for a welder who worked there as a contractor for 17 years. It took nearly three years with the ATO to finalise the claim.
The ATO will not pursue a claim for monies due for more than five years unless you can provide invoices (if you issued invoices) and bank statements proving the amount of the claim.
The next pitfall is that banks say they can only provide records going back seven years. On the surface this is true, but if you go into your branch where the account is held, they often can produce records going back much longer.
The penalties for non-payment of super are huge-200 per cent of the super, plus interest, plus losing the tax deduction for the super, plus potentially a fine and imprisonment.
Some employers don’t pay super because they don’t understand the rules, and other don’t because it reduces their labour costs by around 10 per cent and they rely on the ignorance of contractors.
Kaizen are experienced debt collectors, working ‘on results only’. No recovery no fee. It starts with a simple phone call or an email to discuss your situation then it goes from there if you have a valid claim. If you don’t, Kaizen will explain why.
Contact Kaizen Enterprises at 0414 973 874 or ian.james@kaizenenterprises.com.au