$6,000 super cash boost for Aussie workers as retirement 'drain' halted
Australian workers could be $6,000 better off at retirement when major changes to superannuation kick in. From July 1, 2026, employers will be required to pay superannuation on payday rather than quarterly.
The government revealed its long-awaited draft legislation for the superannuation change last month. Advocates are now calling for the laws to be passed urgently in the first 100 days of the new parliament, with the reform first flagged in May 2023.
Super Members Council analysis found Aussies were missing out on $100 million a week in unpaid super, or $5 billion a year in lost retirement savings. They said passing the 'landmark' legislation would help plug this 'unpaid super drain'.
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'By the time these laws start on July 1, 2026 Australian workers will have waited three years for these reforms. Millions of Australians pay the price of unpaid super every single day. They cannot afford any delay,' Super Members Council CEO Misha Schubert said.
'Payday super will dramatically reduce the level of unpaid super, improve compliance with the law and make the super system fairer for workers and businesses alike.'
Schubert said the ATO, employers, payroll, digital service providers and super funds would need to make a 'concerted effort' to prepare for the reform.Under the draft legislation, employers would be required to process group contributions into the employee's super fund within seven calendar days of payday.
Existing laws require employers to make super contributions quarterly, regardless of how often a worker is paid.
The Council of Small Business Organisations Australia (COSBOA) has supported payday super in principle but has called for a 'realistic timeline' to implement the new laws.
The group argued that current banking and processing systems were not capable of reliably meeting the deadline.
It recommended a phased implementation with monthly payments from July 1, 2026, moving to payday super by July 1, 2030.
'Super payments move through multiple banking and clearing house stages before reaching super funds,' COSBOA chair Matthew Addison said.
'At present, payments can take several business days to clear, and many transactions require additional time to reconcile.
'A phased transition will ensure businesses can comply effectively without unintended consequences.'
Assistant Treasurer Stephen Jones said the change meant a 25-year-old media income earner currently receiving super quarterly and wages fortnightly could be around $6,000 better off in retirement.
'Payday super will make it easier for employers to manage their payroll by paying super at the same time as salary and wages,' Jones said.
'The new law will also streamline the way super is paid by employers to make it easier to meet their obligations.'
Separate research by the Super Members Council found the average Aussie would be $7,700 better off at retirement because more frequent super contributions would accrue and compound sooner.
While most employers are doing the right thing, the Australian Taxation Office (ATO) estimates $5.2 billion worth of super went unpaid in 2021-22.Sign in to access your portfolio
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