Industry Super Australia
The Government is to be congratulated on its decision to change the law and mandate ‘payday super’, a measure that goes a long way to ending the $5 billion a year scourge of unpaid superannuation.
The Treasurer made the announcement ahead of the Federal Budget and said the move to payday super will come into effect from 1 July 2026.
This announcement comes after a growing chorus of organisations have been calling for the government to change the law to require employers to align super payments with payday, on the basis it’s the only meaningful way to reduce underpayments.
Superannuation and union members have known for years that payday super was a reasonable and just solution, recognising that the vast majority of employers do the right thing.
Industry Super Funds, unions and their members have been critical to securing broad community support including consumer and employer groups, to demonstrate to government that it was time to put members’ best financial interests first.
As a result of this decision, one in four workers currently underpaid every year could get an additional $50,000 in savings, when lost super is combined with higher compound interest from more frequent payments.
This measure is a big win for all workers, but particularly those lower-paid blue-collar workers who bear the brunt of unpaid super, plus the more than 1 million mostly lower-paid and younger women who are short-changed.
More than 4 million Australians currently receiving their super quarterly are set to benefit just from more frequent payments. ISA modelling shows a 30-year-old earning the age-based median wage could be $8,000 better off at retirement if paid super fortnightly instead of quarterly, because contributions compound for longer if paid more frequently.
The government should be commended for listening and then taking the necessary steps to end the huge super rip-off which was undermining the future economic security of too many young women and others on lower incomes.
Government decisively acts to stop the $33 billion scourge of unpaid super