Media release – Jim Chalmers, Treasurer; Stephen Jones MP, Assistant Treasurer, Minister for Financial Services, 2 May 2023
Introducing payday super
The Albanese Government will require super to be paid on payday, a reform that will benefit the retirement incomes of millions of Australians.
From 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages.
This simple change will strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers.
By switching to payday super, a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000 or 1.5 per cent better off at retirement.
More frequent super payments will make employers’ payroll management smoother with fewer liabilities building up on their books.
Payday super will also make it easier for employees to keep track of their payments, and harder for them to be exploited by disreputable employers.
The change will particularly benefit those in lower paid, casual and insecure work who are more likely to miss out when super is paid less frequently. Women are overrepresented in this group.
While most employers do the right thing, the Australian Taxation Office (ATO) estimates $3.4 billion worth of super went unpaid in 2019–20.
To further strengthen the system, the ATO will receive additional resourcing to help it detect unpaid super payments earlier and the Government will set enhanced targets for the ATO for the recovery of payments.
Treasury and the ATO will consult closely with industry and stakeholders on these changes in the second half of this year.
The 1 July 2026 start date will provide employers, superannuation funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change.
The Albanese Government is committed to strengthening the superannuation system so that it is equitable, sustainable and delivers better outcomes for all Australians.
Media Release – Super Consumers Australia, 2 May 2023
Super payday for Australians
Super Consumers Australia welcomes the Federal Government’s announcement that people will now be paid super at the same time as wages. The move will see more money in the pockets of Australians at retirement and help the regulator crack down on wage theft.
Super Consumers Australia has been part of a broad coalition of industry, employer and employee groups calling for the reform. Currently, people can be left waiting up to three months to be paid their super. A recent Super Consumers national survey found that 2 in 3 Australians want super paid at the same time as wages.
“The Federal Government’s announcement today is a big win for Australians looking to grow their super. It will make it much easier for people to manage their money and make sure they are paid what they’re owed,” says Xavier O’Halloran, Director, Super Consumers Australia.
“Not paying super on time can lead to real consumer harm. Currently ,people miss out on months of investment returns and risk missing life insurance premiums when they fall due.”
“Real-time payment will strengthen the super payment regulator, the ATO’s, ability to identify missed payments. This will allow the ATO to take timely action to remind employers who have made a genuine mistake to pay, and take more serious action against employers who are engaging in wage theft.”
“Our recent survey found the majority of people don’t realise they can report non-payment to the ATO and that it is the regulator’s responsibility to investigate. We encourage people to report unpaid super to the ATO if they can’t resolve the issue directly with their employer.”
The ask is one of six key recommendations made by Super Consumers in their 2023-24 Federal Budget Submission ahead of the May Budget.
