The federal government is inviting industry and stakeholder feedback on its plan to introduce payday super, a measure originally unveiled as part of the May budget.
Under the plan, employers will be required to pay their employees’ superannuation guarantee (SG) entitlements at the same time that they pay salary and wages beginning from July 2026.
In a consultation paper released on Monday, the government explained it is seeking input from stakeholders on the policy and legislative design of its “Securing Australians’ Superannuation” package, which aims to address the “structural drivers” of unpaid SG.
This, the government noted, will be informed by consultation led by the Australian Taxation Office (ATO) later this year on the administrative approach to the package.
“The aim of this consultation process is to work with stakeholders to co-design an approach which achieves the goals of the Securing Australians’ Superannuation package and is fit for purpose, whilst minimising the administrative and regulatory burden on stakeholders who will implement the changes,” the consultation paper said.
Announcing the consultation in a joint statement on Monday, Treasurer Jim Chalmers and Financial Services Minister Stephen Jones said that around 8.9 million Australians will benefit from higher retirement savings due to receiving SG contributions earlier and more frequently.
“This simple change will strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers,” they said.
“The reform will address the issue of unpaid superannuation by giving employees better visibility of their retirement savings.”
The ATO has estimated that employees were owed a collective $3.4 billion of super in the 2019–20 financial year. Mr Chalmers and Mr Jones indicated that the new package aims to improve the ATO’s ability to detect and recover unpaid super.
“The consultation paper invites industry and stakeholder input on the framework to pay super at the same time as salary and wages. It also seeks feedback on how employee onboarding and their choice of fund could be improved under payday super,” they said.
Additionally, the Treasurer and Financial Services Minister suggested that payday super builds upon the government’s objective of super, “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
By introducing payday super from July 2026, the consultation paper noted that employers, digital service providers, super funds, and other stakeholders will have enough time to make the necessary changes to accommodate the increased frequency of SG contributions.
“By increasing the payment frequency of superannuation to align with the payment of salary and wages, this will both ensure employees have greater visibility over whether contributions have been correctly paid; additional time in the fund for employees to benefit from compounding returns and increase the likelihood of the ATO being able to recover unpaid SG through earlier detection and compliance action,” the paper said.
Additionally, by increasing its investment in the ATO’s data matching capabilities, the government said the tax office will be able to develop and implement digital infrastructure to identify instances of underpayment or non-payment of SG in a timelier way.
Glen McCrea, the deputy chief executive officer of the Association of Superannuation Funds of Australia (ASFA), welcomed the consultation in a statement to InvestorDaily.
“ASFA has long advocated that arrangements be put in place to require employers to make superannuation payments at the same time as wages,” he said.
“We support implementing payday super as it will reduce the quantum of unpaid super (along with improvements to ATO data matching). ASFA welcomes the release of the consultation paper with all the details of the new payday super regime and will work with our members to develop a submission.”
The current consultation closes on 3 November. The ATO is also set to continue consulting with industry this year and into next year on the administrative design of the new package, while Treasury consultation on the legislative design is planned to take place next year.
There won’t be any requirement for data matching if the ATO take over payment of superannuation under this provision. It will be a productivity gain for the whole country by cutting out multiple handling and fail points in the current system. I am sure employers, when they realise what a great benefit this will be, (IF the ATO agree to take responsibility rather than reactively auditing offenders), will be more enamoured with this change. My money is the ATO will be happy to continue to sit back and throw stones, rather than be proactive and embrace this opportunity completely.