9 million Aussies would be better off under payday super
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.
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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