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Consultation opens on payday super
The Albanese government is seeking industry feedback on its proposal to implement payday superannuation, a measure previously announced in the 2023–24 Budget.
With this, employers will be required to pay their employees’ superannuation guarantee (SG) entitlements on the same day that they pay salary and wages.
The consultation is seeking input from stakeholders on the policy and legislative design of this ‘Securing Australians’ Superannuation’ package and will also be informed by ATO-led consultation on the administrative approach to the package, commencing in the second half of 2023.
Described by treasurer Jim Chalmers as a “simple change”, it is aimed at strengthening the super system by addressing the issue of unpaid super and making employers’ payroll management smoother with fewer liabilities building up on their books.
According to the consultation paper, some 8.9 million Australians will benefit from this measure.
“By increasing the payment frequency of superannuation to align with the payment of salary and wages, this will both ensure employees have greater visibility over whether contributions have been correctly paid; additional time in the fund for employees to benefit from compounding returns, and increase the likelihood of the [Australian Tax Office] being able to recover unpaid SG through earlier detection and compliance action,” the paper stated.
Additionally, the government said it is stepping up investment in the ATO’s data matching capabilities towards developing and implementing the necessary digital infrastructure to identify instances of underpayment or non-payment of SG in a timelier way.
In 2019-2020, the ATO estimated $3.4 billion worth of super, or almost 5 per cent of the total expected SG contributions for the year, went unpaid.
The consultation also introduces a new requirement for employers to offer stapling as an option for employees during onboarding.
It also looks to ban advertising super products during onboarding to ensure that employees are not being encouraged into products which have paid to be advertised, may be unsuitable, and may unintentionally lead to duplicate accounts.
Subject to the passage of legislation, this ‘Securing Australians’ Superannuation’ package is expected to commence from 1 July 2026.
According to the government, this timeframe will enable employers, digital service providers, super funds, and other stakeholders the opportunity to make necessary system changes to accommodate the increased frequency of payment of SG contributions.
The consultation will close on 3 November 2023.
AUTHOR
Rhea Nath
Rhea L Nath is a journalist at Money Management and Super Review, with a focus on financial advice, investments, funds management, and superannuation. Previously, she covered small business and entrepreneurship news at Dynamic Business and multicultural issues at Indian Link Media Group. In 2022, she was named Young Journalist of the Year at the NSW Premier’s Multicultural Communications Awards.
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