For many older Australians who are still working and looking to boost their retirement savings in their final career years, a major change to superannuation is now officially on the way.
Labor’s new legislation requiring employers to pay super at the same time as salary and wages has passed Parliament — a shift set to put thousands of extra dollars into workers’ nest eggs over time.
Under the reform, employers will need to deposit employees’ super within seven business days of each payday from 1 July next year. The move is aimed at strengthening Australia’s superannuation system, cracking down on unpaid super, and helping workers grow their balances earlier and more consistently.
The government says employees will benefit from more frequent and earlier contributions that can grow and compound over their working life, ultimately helping deliver a more secure retirement.
The new law will:
The reform has been widely welcomed by industry groups. Superannuation peak body Association of Superannuation Funds of Australia (ASFA) described the Treasury Laws Amendment (Payday Superannuation) Bill as a game-changing reform for fairness and Australian workers’ retirement outcomes.
ASFA Chief Executive Officer Mary Delahunty said the reform will help address the long-standing issue of unpaid super, which currently sees more than $5 billion in retirement savings withheld from Australian workers each year.
“Payday Super is one of the most significant reforms to the superannuation system in decades, and it’s long overdue. Paying super with wages will make the system fairer, boost retirement balances, and ensure super is achieving its core objective,” Delahunty said.
“The sector has long advocated for this change, and now that it’s law, the real work begins: ensuring regulations are practical, delivering a smooth transition for employers, payroll providers and funds alike. ASFA will lead that work on behalf of the sector.”
COTA Australia Chief Executive Patricia Sparrow also welcomed the reform, emphasising its impact on older Australians, women, and casual or part-time workers who often lose out the most.
“Paying super on payday will help more Australians retire with dignity,” Sparrow said.
“This is a really positive reform that means people will finally get their super when they earn it – not months later. It’s a simple, fair change that will make a big difference over a lifetime.
“Australians work hard for their super. This change will particularly benefit women, older workers and those in casual or part-time roles who often miss out the most.
“We know there’s nearly $18 billion in lost super, including hundreds of millions belonging to older Australians. Paying super on payday will help close that gap and keep people in control of their savings.
“Of course this won’t solve all the problems people face when it comes to retirement income, but it’s a common-sense change that will benefit help more Australians retire with dignity, like they deserve to.”
For older Australians still building their super, and for younger workers planning ahead, Payday Super marks a long-awaited step toward a fairer system that helps everyone retire with greater security and peace of mind.
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