Treasurer Jim Chalmers introduced payday super legislation to parliament today, with the laws set to come into effect from July 1 next year. (Source: AAP/Getty)
Australian workers are one step closer to having their superannuation paid at the same time as their wages. Payday super laws have been introduced to parliament today, after being announced by the government more than two years ago.
Employers are currently legally required to pay super quarterly. But from July 1 next year, new payday super rules would require employers to pay employee’s super within seven days of their wages.
The move is designed to help tackle unpaid super, which the Super Members Council found cost 3.3 million Aussies $5.7 billion in super payments in the 2022-23 financial year. That’s an average of $1,730 each a year, which can add up to a loss of $30,000 in retirement.
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Treasurer Jim Chalmers introduced the bill to parliament today, which will also update penalties and charges for late or missed payments.
“In a typical unpaid super case, for a 35-year-old, recovering their super leaves their retirement balance more than $30,000 better off in today’s dollars,” Chalmers said.
“While most employers do the right thing, some disreputable ones are exploiting their employees.”
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The Super Members Council said the change was “long overdue” and has urged parliament to pass the laws promptly to meet the looming start date.
“The introduction of payday super legislation has been a long time coming, it’s time to get this done,” Super Members Council CEO Misha Schubert said.
“Payday super is a simple, fair and urgent reform to help ensure every dollar owed to workers makes it into their super account on time and in full. Millions of Australians cannot afford to wait.
“Payday super is also tipped to deliver an average of an extra $7,700 for working Australians by retirement because being paid your super sooner helps to grow your retirement savings faster.”
Australian business owners have raised concerns over the payday super changes and the risk of penalties to employers.
Under the new rules, employers who miss the seven-day payment deadline would be liable for an updated super guarantee charge. This would include the shortfall amount, daily interest, and an extra enforcement charge.
Daniel McGowan, owner of Lucky Cat Cafe in Ipswich, previously told Yahoo Finance he broadly supported the introduction of payday super but admitted it would “add another layer of stress”.
The small business owner is already juggling rising rents, wages and operating costs, and said the change may mean he needs to trim staff shifts and work behind the counter himself.
Lucky Cat Cafe owner Daniel McGowan said upcoming payday super legislation would have an impact on his small business. (Source: Supplied)
“I need to have that cashflow right here and now to put into the business to go straight into superannuation,” he said.
“I don’t think this is going to hurt staff in that they’re going to get less hours. But it is a consideration now, and I’ve spoken to them about it.”
The Council of Small Business Organisations of Australia has said it supports the principle of payday super but has called for a phased approach to implementation.
The group has argued businesses need more time to ensure the system is fully prepared before a stricter seven day requirement is enforced.
The reform was first announced in the 2023-24 federal budget, giving employers, super funds and software providers three years before the start date.
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