This simple change will strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers.
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 per cent better off at retirement. The change will particularly benefit those in lower paid, casual and insecure work who are more likely to miss out when super is paid less frequently.
More frequent super payments will make employers’ payroll management smoother with fewer liabilities building up on their books.
Payday super will also make it easier for employees to keep track of their payments, and harder for them to be exploited by disreputable employers.
To further strengthen the system, the Australian Taxation Office (ATO) will receive additional resourcing to help it detect unpaid super payments earlier and the Government will set enhanced targets for the ATO for the recovery of payments.