The new Payday Super reforms will leave young workers as much as $5,200 better off in retirement, according to ASFA.
Payday Super came into force on 1 July and means super contributions are now paid at the same time as an employees wages rather than on a quarterly basis. This will bring about the benefits of getting super invested sooner and reducing unpaid super.
It is estimated more than $5 billion in in retirement savings is withheld from Australian workers each year and the changes are especially expected to benefit younger and trade workers.
For a 25-year-old on the average wage, moving from quarterly to fortnightly super adds up to at least $5,200 more in savings by retirement, ASFA said.
ASFA chief policy officer, James Koval, said: “Super funds are already seeing super flowing more regularly into members’ accounts each pay day, from employers that are large companies through to small businesses.
“While this is no doubt a significant change for many businesses, it’s also one that has been underway for several years. Indications are that many employers are either ready for Payday Super or have already transitioned.
“The reform also makes unpaid super easier to catch. Under the quarterly system, workers often notice missing super four to six months after earning it. By then, the business may have gone into liquidation, meaning the worker’s super money cannot be recovered. “
ASFA encouraged workers to keep an eye on their account in the first few pay cycles to ensure the changes have been enacted by their employer.
“My recommendation to every worker is to check that super is actually landing in your account, not just appearing on your pay slip. If something looks off, talk to your employer first, and then the ATO if you need to.”
