Pushback will give 'sufficient time to comply with the new logistical demands on the system'
The Australian government is being urged to push back the implementation of Payday Super by up to two years amid concerns with the superannuation transmission network.
Eight professional bodies, including CPA Australia, made the call in their submitted feedback to the Treasury on the Payday Super exposure draft legislation.
"One of our main concerns is that the superannuation transmission network will not be ready to manage the increased traffic by July next year," said Richard Webb, CPA Australia's Superannuation Lead, in a statement.
"We believe it is vital to postpone the start date for Payday Super by at least a year, ideally 24 months, to allow all stakeholders sufficient time to comply with the new logistical demands on the system."
Payday Super proposes a mandate that employers pay super on payday starting July 2026 in a bid to address the problem of unpaid super in the country.
"Payday super will make it easier for employers to manage their payroll by paying super at the same time as salary and wages," Financial Services Minister Stephen Jones said in March. "The new law will also streamline the way super is paid by employers to make it easier to meet their obligations."
Peak professional accounting and tax practitioner bodies in Australia, which include CPA Australia, said they broadly support the government's policy of introducing Payday Super (PDS).
"The introduction of PDS would get SG contributions into employees' superannuation accounts sooner and take important steps towards addressing the SG gap, which was $5.2 billion in 2021–22 alone," the bodies said in their submission.
However, the peak bodies said the proposed July 2026 start "should be deferred for, ideally, 24 months, but at least 12 months."
The bodies made the call as they pointed out that the superannuation transmission network might not be able to handle the increased traffic by July 2026.
The Superannuation Transmission Network refers to the infrastructure that provides efficient and secure processing of superannuation contributions made by employers to superannuation funds.
"The superannuation transmission network is fundamental to the successful delivery of Payday Super. If it is not adequately prepared for the transition, it would create a perfect storm of confusion and uncertainty for both employees and employers," Webb said.
"The practicalities of delivering a once-in-a-generation reform of the infrastructure underpinning the superannuation payments system are extremely challenging."
Meanwhile, the peak bodies also called on the government to introduce a grace period to allow employers to receive education and support without immediate penalties for non-compliance.
According to the peak bodies, the current proposal may lead to employers being subjected to penalties due to events outside their control, such as potential cyberattacks and internet or power outages.
"This is fundamentally unfair and fails to recognise that penal consequences should proportionately reflect the scope and extent of the mischief or error," they said. "It is unreasonable and unfair to penalise an employer for a late payment when the delay arose from the actions of a third party."
Payday Super has been pushed in Australia in the wake of recent reports that employees are losing millions of full superannuation entitlements.
Analysis from the Super Members Council last year revealed that Australians have collectively missed out on $41.6 billion in unpaid super over the past nine years.
SMC CEO Misha Schubert said the Payday Super plan will modernise the super system and should "hugely reduce underpayments."
"It's an excellent example of reform to benefit super fund members, which will make super fairer for workers and employers alike," Schubert said in a previous statement.
