The federal government has released draft legislation to progress its plans to introduce payday superannuation payments and has given the super sector four weeks in which to respond.
The government first announced plans to make the change in May 2023 and in November last year added it would spend over $400 million over four years to implement the measure, which is slated to commence on 1 July 2026, once it has passed through parliament.
The legislation will require employers to pay superannuation at the same time as employees’ salaries and wages and updates the penalties and charges for late or missed super payments.
Commenting on the release of the draft legislation, Financial Services Minister Stephen Jones said: “By switching to payday super, a 25‑year‑old median income earner currently receiving their super quarterly and wages fortnightly could be around $6000 or 1.5 per cent better off at retirement.”
The SMSF Association encouraged its members to provide feedback by making an online submission to Treasury, while Association of Superannuation Funds of Australia chief executive Mary Delahunty welcomed the progress of the government’s plans.
“Payday super means over 3 million workers will see their super build in real time, alongside their wages. It will mean less lost super and better outcomes in preparation for retirement. We are sure this change will encourage people to engage more regularly with their retirement savings,” Delahunty said.
She pointed out ATO data from the 2022 financial year showed there were more than 500,000 cases of super underpayment and 200,000 of non-payment, which resulted in an estimated $5.2 billion in lost retirement savings.
Submissions on the payday super exposure draft legislation opened on 14 March and close on 11 April.