2 May 2023
ASFA welcomes commitment to pay super with wages
The Association of Superannuation Funds of Australia (ASFA) said the Government’s announcement that they will mandate the payment of superannuation with wages will mean thousands of dollars more in retirement for millions of Australians.
ASFA has long recommended measures to improve Superannuation Guarantee (SG) compliance and payment of SG with wages has been top of the list.
“Requiring employers to pay SG at the same time as wages will make it easier for employees to monitor the SG compliance of their employer and for the ATO to compare superannuation payments with wage payments”.
“It will limit build-up of SG liabilities and hold employers to account,” said ASFA Deputy CEO Glen McCrea.
ASFA said that the announcement of additional resources in next week’s Federal Budget for the ATO to help detect unpaid super and meet new targets for recovery is a necessary step in combating the scourge of unpaid super.
The ATO has previously estimated a net SG gap of $3.4 billion. This is the shortfall in SG payments by employers and represents 4.9 per cent of the total expected SG contributions for the year 2019-20.
“Left unaddressed, the issue of unpaid SG contributions comes at a significant cost to people’s retirement. For example, a 35 year old on $65,000 per year who misses out on SG for 2 years would be around $24,000 worse off in today’s dollars at the time of retirement,” said Mr McCrea.
The 1 July 2026 start date provides ample lead time for the ATO and business to update systems and processes to implement the change.
ASFA looks forward to contributing to the Government’s consultation and continuing to play a key role working with members and industry to implement these important changes to secure better retirement outcomes for Australians.
For further information, please contact:
ASFA Media team, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.