Wednesday was an historic day for anyone who has been campaigning for payday super over the years, after new laws came into effect requiring employers to pay super at the same time as wages instead of only once every three months.
But more importantly, it’s a historic day for victims of unpaid super. Sadly, many victims never realise they are one or only do once it’s too late.
SMC’s latest analysis of recently released tax data shows unpaid super is now costing Australians $6.3 billion each year in lost retirement savings – a $500 million increase on the previous year.
The data shows around 3.4 million workers were underpaid super in 2023-24, missing out on an average of $1,850 each, which can translate into more than $30,000 less at retirement.
The impacts are not shared equally. Women, who already retire with significantly less super than men, are disproportionately affected. Younger workers and lower-income earners are also among those most exposed, with one in two workers earning less than $25,000 a year missing out on super entitlements.
That is why payday super matters. Requiring super to be paid at the same time as wages will make it far easier for workers to spot missing payments and for the ATO to take action early.
A recent survey found more than 70% of Australians agree payday super will help them keep track of whether their employers are paying their super correctly, and more than half saying they will now check their super more regularly.
The transition for businesses is significant but should be manageable, thanks to digital payroll and Single Touch Payroll systems now commonplace. The ATO has also provided a grace period for the first 12 months so businesses aren’t penalised if they do the right thing but payments are late due to factors outside their control.
Around 40% of businesses are already paying super more frequently than quarterly, while ATO data shows that since payday super was announced, around 19,000 more employers are paying super more frequently than quarterly: a 2.4 percentage point increase in the share of employers doing so.
For those interested in a state-by-state breakdown of the latest unpaid super figures, you can find them here.
