The Payday Super Bill, which will be introduced into the House of Representatives today, is welcome news for all working Australians and especially young people and tradies according to the superannuation sector’s peak body, ASFA.
The legislation will ensure that employers pay super alongside wages each pay cycle instead of quarterly as currently required.
“Payday Super is a simple but powerful reform that will boost the retirement savings of every Australian employee and help address the problem of unpaid super. Australians have been waiting three years for this policy to become law. It’s a hugely popular reform, with 80% of Australians polling in favour of it,” said ASFA CEO Mary Delahunty.
“Our message to all sides of politics is simple: It’s time. Let’s get it done,” Ms Delahunty said.
Super funds ready for “major shift”
Payday Super will greatly increase the administrative load on the super industry because funds will need to process and invest super contributions up to twelve times more often than before. This has necessitated large amounts of technical preparation by the industry.
“The super sector has a dedicated community of implementation experts that is convened by ASFA, known as ASFA InPractice. It brings together professionals from super funds, administrators, software providers and regulators, and has been leading the sector’s preparation for Payday Super since the policy was announced in the 2023 federal budget.
“The higher transaction volumes that will flow once Payday Super begins have required years of behind-the-scenes work to get our systems ready. We’re at the point now where we’re confident the sector will handle this major shift cleanly and efficiently.
“Through ASFA InPractice, and working closely with the ATO, we’ve been co-designing enhancements to the SuperStream payments infrastructure. This collaboration across government, industry and regulators has set us up well, so that the benefits of Payday Super will flow smoothly through to members,” Ms Delahunty said.
Ms Delahunty said the process had been “one of the best Australian examples of an entire industry cooperating towards a positive change in recent years.”
“Every fund and service provider faces the same challenge. By working together rather than competitively, the sector has been creating a consistent and efficient approach that prevents resource wastage and ultimately benefits members’ retirement outcomes,” Ms Delahunty said.
Benefits of Payday Super
The earlier super payments are invested in an employee’s super fund, the longer the money enjoys compounding returns. For a 25-year-old on an average wage, receiving super fortnightly rather than quarterly will mean they are $5,000 better off in retirement.
“Super belongs to the employee who has earned it, as soon as they’ve earned it. In many cases, though, the money is held in an employer’s bank account for months, earning interest for the employer instead of the employee. It’s an unfair situation; Payday Super will correct it,” Ms Delahunty said.
The reform will also help address the problem of unpaid and underpaid super, which can seriously impact a worker’s retirement security.
ASFA modelling shows that a 30-year-old worker on an average wage who misses out on one year of contributions will retire with $25,000 less in super.
The ATO estimates that more than $5 billion in super that is owed to Aussie workers goes unpaid each year. While this occurs across all sectors, tradies and labourers are more than twice as likely to be affected than white collar workers.
“It’s really difficult for employees to keep track of whether their employers are up to date with super payments when they’re only paid quarterly, especially if their pay varies each week. It means going through months of payslips, adding up the super payments, and cross checking them against their super accounts.
“Often, by the time an employee discovers they’ve been underpaid, the employer is insolvent, or unreachable, making it impossible to recover what they’re owed.
“Payday Super lets you check your payslips against your super fund statements each week or fortnight. You can see straight away whether the $200 you were owed in super was paid to your account. And if it wasn’t, you can take action straight away,” Ms Delahunty said.
Payday Super is super popular
Payday Super enjoys significant public support, with an overwhelming majority of Australians backing the change. In a recent, ASFA-commissioned survey, 80% of respondents agreed that super should be paid at the same time as wages.
Support for the reform was consistent across age groups and was slightly stronger among blue-collar workers, who are most likely to be affected by unpaid or underpaid super. The reform enjoyed its highest level of support amongst those in the “mortgage belt”, or outer metropolitan areas.
“Payday Super was announced as a government policy in the 2023 federal budget with a start date of 1 July 2026. The industry has been preparing for the change for three years. It’s complex, but we will be ready for it.
“We will continue to work with government and the business community to ensure a smooth transition to this new, fairer system,” Ms Delahunty concluded.
For further information, please contact:
ASFA media team
0451 949 300
mediaunit@superannation.asn.au
About the Association of Superannuation Funds of Australia (ASFA)
ASFA, the voice of super, has been operating since 1962 and is the peak policy, research and advocacy body for Australia’s superannuation industry. ASFA represents the APRA regulated superannuation industry with over 100 organisations as members from corporate, industry, retail and public sector funds, and service providers. We develop policy positions through collaboration with our diverse membership base and use our deep technical expertise and research capabilities to assist in advancing outcomes for Australians.
We unite the superannuation community, supporting our members with research, advocacy, education and collaboration to help Australians enjoy a dignified retirement. We promote effective practice and advocate for efficiency, sustainability and trust in our world-class retirement income system.