Australian workers are set to retire with thousands more in their superannuation accounts after changes to how the money is paid.
From July 1, 2026, employers will have to pay super at the same time as wages and salary.
The changes will leave the average 25-year-old earner about $6000, or 1.5 per cent, better off in retirement because more frequent payments leave more time for compounding interest.
Treasurer Jim Chalmers said the simple change was common sense.
“It will strengthen the system and will boost retirement incomes,” he told ABC radio.
“The main reason for that is it will make it less likely that people will miss out on the super that they’ve earned and that they’re entitled to.”
Super Consumers Australia welcomed the change – one of six recommendations in its submission ahead of next week’s federal budget.
Director Xavier O’Halloran said it would make it easier for workers to manage their money and ensure they were paid what they were owed.
“Not paying super on time can lead to real consumer harm. Currently, people miss out on months of investment returns and risk missing life insurance premiums when they fall due,” he said on Tuesday.
“Real-time payment will strengthen the super payment regulator, the ATO’s, ability to identify missed payments. This will allow the ATO to take timely action to remind employers who have made a genuine mistake to pay, and take more serious action against employers who are engaging in wage theft.”
The Australia Tax Office estimates there was $3.4 billion of unpaid super in 2019-20.
Under the changes, the ATO’s resources will be boosted to aid a crackdown on compliance. It will also have a new target for recovery payments.
Dr Chalmers said the July 1 timing of the change would give businesses a long enough grace period to adapt to the changes.
“We have deliberately given employers and super funds and others a long run-up until 2026 so that they can prepare for this change,” he said.
– with AAP
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