'It also seeks feedback on how employee onboarding and their choice of fund could be improved under payday super'
The Australian government is now asking for feedback on its plan to make employers pay for their employees' super on payday.
The government released on Monday the Securing Australians' Superannuation consultation paper, which will remain open until November 3, 2023.
"The consultation paper invites industry and stakeholder input on the framework to pay super at the same time as salary and wages," said Treasurer Jim Chalmers in a statement. "It also seeks feedback on how employee onboarding and their choice of fund could be improved under payday super."
Subject to passage, the proposed payday super plan is set for implementation on July 1, 2026, which Chalmers said will benefit the retirement income of "millions of Australians."
"The reform will address the issue of unpaid superannuation by giving employees better visibility of their retirement savings," the treasurer said.
Millions to benefit
According to Chalmers, around 8.9 million Australians will benefit from higher retirement savings when they receive their Superannuation Guarantee contributions earlier and more frequently.
"By switching to payday super, a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000 or 1.5% better off at retirement," Chalmers said.
More frequent super payments will also make payroll management smoother for employers and reduce liabilities building up on their books, he added.
The reforms come after estimates from the Australian Taxation Office (ATO) revealed that employees are owed $3.4 billion worth in super in 2019-20.
"The reform will improve the ATO's ability to detect and recover unpaid super payments," Chalmers said.
The ATO is now carrying out consultation with the industry this year until next year on the reform's administrative design. For its legislative design, the Treasury said it plans to hold consultation on the in 2024.
