Employers who fail to pay super within seven days of paying wages will face tough penalties under proposed laws.
The federal government has previously announced payday super reforms to take effect in 2026, requiring employers to pay superannuation payments at the same time as wages.
A revised framework released on 18 September outlines tough penalties for employers who do not pay on time, including a penalty payment of up to 50 per cent of the amount owing (which includes the unpaid super as well as interest and other charges).
IEU-QNT Branch Secretary Terry Burke welcomed the reforms and urged the government to legislate them as soon as possible.
“Denial of superannuation has been a scourge upon the employment system, affecting 1 in 4 employees and costing them over $5 billion each year,” Mr Burke said.
“Workers most affected are women, young workers, migrant workers and those in insecure work.
“These proposed laws would deter most employers from engaging in super theft,” he said.
Mr Burke said a foundational aspect of the super system was compounding interest.
“Super cannot compound if it hasn’t been paid – that’s why payday super laws are essential,” he said.
“The federal government should enshrine payday super in law as soon as possible.
“Workers’ financial future depends upon it,” Mr Burke said.
Reforms welcomed across sector
Payday super has been welcomed as a “game-changer” by a peak body of super funds, the Association of Superannuation Funds of Australia.
“This reform means workers will see their super build in real-time, alongside their wages,” Chief Executive Mary Delahunty told the Financial Standard.
“It will mean less lost super and better investment outcomes in preparation for retirement.”
The Super Members Council agreed payday super would stop workers from being “short-changed”.
“Unpaid super locks too many Australians out of the full transformative benefits of the retirement system and leaves people poorer when they retire,” Chief Executive Misha Schubert said.
“A unified push is needed to stamp it out,” she said.
Australian Council of Trade Unions (ACTU) President Michele O’Neil said the laws affirmed superannuation payments were earnings that belong to workers.
“When super is not paid regularly, the money is kept in employers’ accounts, which means workers lose large compound interest returns on their money,” Ms O’Neil said.
“Payday super will put more super, more regularly, into more workers’ accounts and directly improve the retirement outcomes of all Australian workers.
“More regular employer super payments will give workers greater oversight over their money, reduce super theft and deliver higher compound interest returns for workers.
“Many responsible employers already pay super on payday. However, this change will make a difference for those workers whose employers hold onto workers’ money and still think of super as an optional extra,” Ms O’Neil said.
Read more about payday super via the ATO website.
