Staff get more legal rights to claim superannuation in company collapses

Reported across several media outlets are the changes to laws giving staff greater ability to claim unpaid superannuation when companies collapse. Here is an excerpt from The Australian (read in full here):

Under new laws, which came into effect this week, superannuation will be given the same priority as other debts and will rank equally with employee entitlements such as unpaid wages and annual leave.

The Australian Taxation Office says any outstanding superannuation contributions and superannuation guarantee charge will be paid to employees before payments to ordinary unsecured creditors and once priority creditors and liquidators’ fees are paid.

The change is good news, but not one that would have me rejoicing. You see, it could takes years before the company is liquidated and the superannuation debt paid to former employees. (Ansett Airlines is still being liquidated many years after it collapsed.)

A better path is to keep an eye on your superannuation guarantee payments. If they are not paid on time one month then you approach your employer as it could be an early warning sign of a sinking ship. (It could also be an honest mistake in the timing of the payments, so be open to a quick satisfactory resolution.)

Under current regulations compulsory superannuation guarantee payments must be made quarterly. Salary sacrifice contributions must be paid in the month following the month they were sacrificed. (Actual deadline dates are listed on the ATO website.)

So at least take a quick glance at your superannuation account once every quarter to check on superannuation contributions. It may give you an early signal that you should start looking for a job with a different employer.