The Super Members Council of Australia has voiced its support for payday superannuation following the government’s consultation.
The body was formed earlier this year from the merger of Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST). It also recently appointed Misha Schubert as its first chief executive in late November, who will commence from February 2024 and be based in Canberra.
The Super Members Council (SMC) has now backed the government’s decision to require employers to pay their employees’ super guarantee (SG) entitlements on the same day that they pay salary and wages, rather than quarterly.
On 9 October, the Albanese government opened consultation on its proposal to implement payday super, a measure previously announced in the 2023–24 budget.
According to the SMC, this simple change will create ‘transformative benefits’ on Australia’s retirement system.
“Outdated laws requiring employers to only pay super quarterly was a key reason many lower paid workers were not getting their super in full and on time,” the body said.
Nicola Roxon, interim chair of the SMC, described the government’s commitment to payday super as a key step towards ensuring a financially secure retirement for every worker.
“This is a simple change with a big positive impact for millions of Australians. With the typical retiree having a super balance of $200,000, super provides financial flexibility and peace of mind at retirement – unpaid super was putting that dream at risk for too many Australians,” she said.
“Payday super dramatically reduces unpaid super giving more Australians a dignified retirement.”
New modelling from the industry body has uncovered it could add up to $36,000 to the super balance of workers in the lowest 20 per cent of wage earners.
It also found that on average 2.8 million Australians are underpaid a total of $4.7 billion super per year, according to Australian Tax Office (ATO) analysis.
Roxon continued: “Removing system glitches that deny workers super’s transformative benefits is a key plank of the Super Members Council’s mission to protect and promote the interests of our 10 million members.
“And this payday super measure is an example of what can be achieved when we put Australian workers at the heart of super policy development.”
The ATO recently revealed that during the financial year 2023, it recovered over $1.1 billion in super guarantee charges (SGC), which occur when an employer does not pay super for their staff in full and on time.
The nearly $700 million distributed back to funds and individuals is a “direct boost to Australians’ retirement savings”, the ATO said, arising from unpaid super, compliance activities, and voluntary employer disclosures.
“[Payday super] will help ensure super is paid on time and in full, meaning Australians can have trust and confidence that the super system is working for them – not against them,” Roxon added.