A superannuation bungle has left Northern Territory public servants short-changed and seen 14 politicians overpaid, the NT Government has revealed.
Government staff were told by email on Thursday morning about errors in superannuation payments, which spanned the last ten years.
16,000 current and 41,000 former employees were underpaid a total of $20 million and another $10 million is owed in interest.
The average underpayment is around $350 per person excluding interest.
The super stuff up doesn’t end there – another 390 people were overpaid to the tune of $6.5 million, including $36,000 which was overpaid to 14 current members of parliament.
So, how did it happen?
In 2009, the Government missed a ruling by Australian Taxation Officer on recreation leave loading and termination entitlements, meaning the payroll system wasn’t re-programmed.
It also wasn’t re-programmed in 2010 and 2018 when superannuation entitlements for employees on parental leave without pay changed, or in 2013 for Acting Judges when the Superannuation Guarantee law was amended to remove the age limit of 70 years for contributions.
For staff who were overpaid, the payroll system wasn’t programmed to suspend superannuation contributions once an employee reached the ‘ordinary time earnings’ cap of $55,270 per quarter.
The Commissioner of Public Employment, Vicki Telfer, explained the Department of Corporate and Information Services realised the error after a clarification was released by the ATO earlier this year.
“It prompted DCIS to start going through the record,” she said.
“It was at that point that, along with the NT Public Service, many other employers across the country identified there was a problem.
“We are very sorry that this has happened for our employees.”
Funds have been set aside to repay effected staff with interest, while some overpayments will be recovered.
“I want to stress, we are not asking people to put their hand in the pocket to pay this and we are waiving the first $2,000 of any overpaid superannuation entitlement,” said Ms Telfer.
“We will be going back a maximum of three years.”
The Government will short-pay future superannuation payments over the next few months, which is allowed by the ATO, and recover any remaining money from superannuation funds.
For politicians, the process will be the same.
“We haven’t spoken to the superannuation funds yet but that will be one of the things we do very soon,” said Department of Corporate and Information Services CEO Kathleen Robinson.
“We will use phone numbers and other information we have available to us to endeavor to contact them (and) if we can’t contact them, we will pay the ATO, as we are required to, and they will have their details.”
Unions have been briefed on the bungle and payroll systems have been re-programmed.
An executive steering committee has also been established to monitor any rulings or clarifications put out by the ATO.
The pay bungle has already been factored into the budget, despite not being mentioned by the Treasurer in her mid-year update last week.
Ms Telfer said funds to repay staff were set aside from general reserves and won’t impact agency budgets.
She conceded workers in the private sector may also be getting underpaid superannuation, if their employers aren’t aware of ATO rulings.
“I think it would be a wise thing for any employer to check they are paying all their entitlements correctly.”