Australian workers could be $6000 better off under new proposal

Australian workers would ultimately be up to $6000 better off with a remarkably simple change to their pay, a minister said.

Millions of Australians could be $6000 better off when they retire when the government changes when superannuation needs to be paid to workers.

If the new draft proposal is implemented, employers will need to pay superannuation at the same time as they pay salary or wages, starting from July 1, 2026.

Currently employers are required to pay superannuation entitlements every three months to their employees.

Workers could be up to $6000 better of under the government’s proposal: NewsWire / John Gass

Assistant Treasurer Stephen Jones says by switching to payday super, a 25‑year‑old median income earner currently receiving their super quarterly and wages fortnightly could be around $6000 better off in retirement.

“Payday super will make it easier for employers to manage their payroll by paying super at the same time as salary and wages,” Mr Jones said.

“The new law will also streamline the way super is paid by employers to make it easier to meet their obligations.”

Separate figures from the Super Members Council show this simple change would mean almost nine million Australians would get their super paid sooner – adding $7700 more at retirement – because the more frequent super contributions start to compound sooner.

Mr Jones said the change would strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers, in line with the objective of super.

The Super Members Council described the new laws as a “game changer” as employees would be able to check they have been paid superannuation at the same time they check their pay.

Superannuation groups call it a “game changer” for millions of workers. Picture: NewsWire / Luis Enrique Ascui

“Crucial payday super laws will make the system fairer for both workers and businesses, so more workers are paid the super owed to them and businesses compete with each other on a level playing field,” Super Member council chief executive Misha Schubert said.

“Paying super on payday will modernise the super system to stem underpayments for workers.

“Unpaid super leave people poorer when they retire – and a unified push is needed to fix it.”

Mr Jones also said these changes would help workers stop being underpaid superannuation, which was costing them billions.

“This will tackle the scourge of unpaid super directly. While most employers do the right thing, the Australian Taxation Office estimates $5.2bn worth of super went unpaid in 2021-22,” he said.

Originally published as Australian workers could be $6000 better off under new proposal