Australia’s superannuation funds have welcomed forthcoming laws that will accelerate the flow of billions of dollars each year into their giant coffers.
The Australian Government is releasing draft legislation requiring employers to pay super on payday, rather than quarterly, to tackle the estimated $5 billion-plus of unpaid super each year.
Assistant Treasurer and Minister for Financial Services Stephen Jones said employers would be required to pay their employees’ super at the same time as salary and wages from 1 July 2026.
“This will tackle the scourge of unpaid super directly,” Jones said in a media release.
According to the Australian Taxation Office, there were more than 500,000 cases of underpayment and more than 200,000 cases of non-payment of super in the 2022 financial year, resulting in lost retirement savings of A$5.2 billion (US$3.0 billion).
Australian super assets grew 11.5% in 2024 to $4.117 trillion at 31 December with contributions rising 14.8% to $198.1 billion over the year.
The announcement was welcomed by the peak bodies for the major industry, public sector, corporate and retail super funds in Australia, The Association of Superannuation Funds of Australia (ASFA) and Super Members Council (SMC).
ASFA said the legislation would mean Australians retired thousands of dollars better off by ensuring they did not miss the benefits of compounding investment returns through more frequent contributions.
“Payday super means over three million workers will see their super build in real-time, alongside their wages. It will mean less lost super and better outcomes in preparation for retirement,” ASFA CEO Mary Delahunty said in a media release.
SMC CEO Misha Schubert said the laws would make it easier for workers to check they had been paid the right amount of super and for businesses to smooth out cashflows and avoid time-consuming reconciliation processes.
“Crucial payday super laws will make the system fairer for both workers and businesses, so more workers are paid the super owed to them and businesses compete with each other on a level playing field,” Schubert said in media release.
