Another employment reform is on the horizon, with the government announcing a change requiring superannuation to be paid on payday.
The reform is slated to come into effect on 1 July 2026 and is set to benefit the retirement incomes of millions of Australians.
Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones give the example of a 25-year-old median income earner currently receiving super quarterly and wages fortnightly. According to them, this individual could be around $6,000 or 1.5 per cent better off at retirement.
The ministers believe that this will benefit bosses too, claiming that more frequent super payments will make employers’ payroll management smoother with fewer liabilities building up on their books.
Payday super will be intended to make cash flow planning easier on businesses and to make it easier for employees to keep track of their payments. Which, in turn, should make it harder for them to be exploited by disreputable employers.
While most employers do the right thing, the Australian Taxation Office (ATO) estimates $3.4 billion worth of super went unpaid in 2019–20.
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.
This change will strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers, claim Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones.