Superannuation is the regular payment made into a fund by an employee toward a future pension.

I recently left an employer to start work at a different company. Payroll was not notified, and I kept receiving a salary from the old company for two months (paid monthly, the first month was normal salary instead of partial month and leave payout, second month was salary instead of nothing).

They have asked me to pay back the salary (which I understand, and will do), and also pay back amounts that have gone into superannuation (as if it was salary). Well actually, according to my superannuation statement, only one of those months has actually been paid into superannuation so far, and given the pattern, it appears the most recent payment won't be made for another three weeks.

Given that I won't have access to superannuation for another 20+ years, do I need to pay it back? It seems it should be up to the employer to work out their mistake with the superannuation company, otherwise they have effectively put an amount out of my salary into superannuation without my instruction.

Re being put on hold due to company-specific regulations, agreements, or policies:

I believe the circumstances are broad enough to apply to any similar situation in Australia (unsure about other countries). The superannuation system is universal in Australia. I imagine that any Australian employee who is overpaid on resignation (or leaving a job for any reason) will almost certainly have overpaid superannuation amounts as it they are paid as a proportion of gross salary.

EDIT: After over two weeks of not hearing anything, the employer backed down on his request for the superannuation. They sent another letter which had the superannuation amount missing (it even had the same date as the first letter).

  • Is the account that the payments were made on actually in your control? Could you pay that money back from that account even if you wanted too? – Neo Mar 29 '18 at 11:14
  • Short answer, no. I cannot access the superannuation until retirement age (currently 67 and slowly increasing). I understand there are exceptions like being permanently disabled, but in general, no. – user85471 Mar 29 '18 at 11:20
  • For those not familiar with Australian superannuation, employers must pay 9.5% of gross (but not out of gross, from their own pocket) into a superannuation fund (which is in the employee's name). Effectively a retirement fund which can only be accessed after a certain age. – user85471 Mar 29 '18 at 11:22
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    I have contacted my super company for clarification, and they have outlined a procedure for the employer to follow. – user85471 Apr 2 '18 at 10:39
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    I have also replied to the employer asking them to review their request (ie I shouldn't have to pay back the super), and also included the procedure that my super company has supplied. – user85471 Apr 2 '18 at 10:41

In Australia, employers do have a right to recover overpaid salary (they just can't make any deductions without your written permission).

They also have a right to recover any contributions to superannuations that were made in error. As you say, super funds are generally inaccessible, but there are mechanisms for a super trustee to refund a contribution if they are satisfied there was a genuine clerical error.

Your old employer will need to provide evidence of overpayment to your super trustee.

You also need to make sure your employee removes the overpayment from your annual pay summary (or provides evidence of it) so you don't get overtaxed. And, since you are paying back after leaving, get a receipt for your repayment(s)

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    * get a receipt for your repayment(s)* excellent point. – Neo Mar 29 '18 at 13:17
  • That sounds about what I thought should happen. The tip on getting a receipt is good. Is there any reason to say that they have no right to ask for the superannuation? This would make my response to them compelling and straightforward. – user85471 Mar 30 '18 at 1:40
  • this answer needs an authoritative link from the ATO or ASFA instead of a rando law blog – bharal Mar 30 '18 at 1:58
  • @bharal that's one link out of dozens - including those belonging to super funds – HorusKol Mar 30 '18 at 5:02

Honestly I think by waiting 2 months you lost the ability to say that it is on the employer to correct. Mainly because you were getting all this money, and you spent/withdraw from it and made no effort to contact them on the mistake until they realized it through some internal audit.

I'm not sure on the law but ultimately you may have to pay back the retirement fund out of pocket since you cannot withdraw from it directly. My personal opinion is that if they cannot pull out of the account, you should pay them back out of pocket.

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  • They did not notice the error, I pointed it out to them. And it took them a week to respond to my email. I did not notice on the first month because the amount was not much different to what I would have normally received. – user85471 Mar 30 '18 at 1:32
  • You never thought to followup? – Donald Mar 30 '18 at 1:56
  • yeh, this isn't a good answer. your personal opinion - isn't worth a lot for aussie law, really. i'm not a big fan of blaming employees for the employers mistake either - in the reverse situation, the consequences can be dire. why should employers get to avoid the problem? – bharal Mar 30 '18 at 2:00
  • @Ramhound I was intending to follow up on the day I received the reply. What would you consider a reasonable time in this case? In any case, I figured I didn't want to waste too much time sorting out their mistake. – user85471 Mar 30 '18 at 5:14
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    They can pull out of the account, by proving it should never have gone in, to the trustees of the account. It is absolutely not ever on the employee to do this nor to pay it back from pocket. I think you should know how a system works before trying to make a (terribly wrong) answer about how to use it. – user53718 Mar 30 '18 at 20:09

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