9 million Aussies would be better off under payday super


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The government has released a consultation paper, inviting stakeholders to provide feedback on a proposed framework to synchronise superannuation payments with wages.

The Securing Australians' Superannuation consultation paper also seeks feedback on how employee onboarding and their choice of fund could be improved under payday super.

In the 2023-24 Budget, the government announced that from July 1, 2026, employers will be mandated to pay Superannuation Guarantee (SG) contributions alongside salary and wages payments.

payday super government consultation

What is the Securing Australians' Superannuation consultation paper?

The consultation paper said that aligning superannuation payments with wages ensures employees have clearer visibility over correct SG contributions.

This adjustment not only offers employees extended time in the fund, amplifying the benefits of compounding returns, but also bolsters the Australian Tax Office's capabilities for early detection of discrepancies, increasing the likelihood of timely compliance actions to recover unpaid SG.

It's estimated around 8.9 million Australians will accrue higher retirement savings from receiving SG contributions earlier and more frequently.

How does payday super work?

For example, by switching to payday super, a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6000 or 1.5% better off at retirement.

More frequent super payments will also make employers' payroll management smoother with fewer liabilities building up on their books.

How will more regular super payments benefit Australians?

Treasurer Jim Chalmers and minister for financial services Stephen Jones said: "This simple change will strengthen Australia's superannuation system and help deliver a more dignified retirement to more Australian workers."

Interested parties are encouraged to provide input on the consultation paper by November 3.

This article first appeared on Financial Standard

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Andrew McKean is a journalist at Financial Standard. He covers superannuation, wealth management and financial advice. Prior to this he has worked freelance for not-for-profit organisations and corporate educators. Andrew has a Bachelor's degree in journalism and non-fiction writing from Macquarie University. Connect with him on LinkedIn or Twitter.