A major milestone in ensuring workers’ financial security is underway, with the federal government releasing new draft legislation to have superannuation paid at the same time as wages. This ‘payday super’ measure is set to benefit millions of Australians, directly tackling unpaid super issues and offering a clearer path to a more secure retirement.
According to Australian Unions, this initiative will make it tougher for employers to neglect their super obligations. Unpaid super affects one in four workers—a total of 2.8 million people—costing them a collective $5.1 billion every year. The Super Members Council estimates each affected worker loses an average of $1,800 annually or about $30,000 by retirement.
The move has also been warmly received by COTA Australia, the leading advocacy group for older Australians.
“These laws will tackle the $5 billion annual shortfall in unpaid super that leaves 2.8 million workers short-changed,” said Patricia Sparrow, Chief Executive of COTA Australia. “We’ve long called for super to be paid on payday—not quarterly—and we’re pleased to see the Federal Government taking action to make this a reality by 2026.”
Sparrow underscored the ripple effect unpaid super has on those in insecure work and on women, who already face notable retirement income gaps.
“Unpaid super is money workers are legally entitled to. Every day it goes unpaid, Australians are losing out on their own retirement savings, missing the benefits of compound interest that could make a real difference later in life.”
Unions and industry leaders alike say the new system will streamline the payment process for businesses by integrating super into regular payroll cycles. They highlight that this shift reduces administrative burdens and ensures workers see the retirement contributions they are owed in real time.
“This is a no-brainer reform. It benefits workers by ensuring they get paid what they’re owed and helps businesses by simplifying super payments and reducing red tape,” Sparrow continued.
“With Australians living longer, we need a superannuation system that supports people throughout retirement. Paying super on payday is a fundamental step towards that goal.”
Acknowledging there is more work to be done to address broader retirement concerns, Sparrow remains confident this change is a vital starting point. “While this won’t fix every challenge in our retirement income system, it’s a major step forward in ensuring Australians can retire with dignity,” she said.
Payday super represents a critical opportunity to close the unpaid super gap and strengthen the nation’s retirement framework—an outcome welcomed by both workers and industry experts. If implemented as proposed, it could markedly reduce super theft, secure better financial futures and allow Australians greater oversight of their own retirement savings.
Related: Retirement funds at risk as Australians choose healthcare over savings
Ritchelle is a Content Producer for Healthcare Channel, Australia’s premier resource of information for healthcare.
