Understanding the Shift to Concurrent Super Payments

For years, employers have been permitted to make superannuation contributions quarterly, leading to delays and, in some cases, non-payment. This system has disproportionately affected lower-income earners and those with frequent job changes, who are less likely to notice discrepancies in their superannuation accounts. The shift to concurrent payments is designed to rectify this imbalance and ensure that all employees receive their entitled superannuation benefits in a timely manner.

Joint bodies representing superannuation funds and employer groups have called for clear communication and ‘nudges’ to assist businesses in adapting to the new legislation. They emphasize the need for accessible resources and guidance to ensure a smooth transition. The Australian Journal of Pharmacy reports that unions are optimistic the new rules will significantly reduce the number of unpaid super claims.

The ATO is actively preparing for the implementation of payday super, developing new systems and processes to monitor compliance. They are also providing educational materials and support to employers to help them understand their obligations. Accountants Daily notes that while the legislation is now finalized, there are still areas requiring clarification and ongoing attention.

Alvarez & Marsal highlights the importance of businesses understanding the implications of the new rules and taking steps to ensure compliance. This includes updating payroll processes, training staff, and seeking professional advice if needed. The change represents a fundamental shift in how superannuation is handled in Australia, and businesses must adapt accordingly.

But what impact will this have on smaller businesses, already grappling with rising costs? Will the administrative burden of more frequent payments outweigh the benefits of a more equitable system? These are questions that will continue to be debated as the implementation date approaches.

The ATO’s warning underscores the seriousness of the issue. With $6.25 billion in unpaid superannuation currently outstanding, the government is determined to ensure that employees receive the retirement benefits they are entitled to. This legislation is a key step towards achieving that goal.

Did You Know?: Approximately one in three employees have experienced a shortfall in their superannuation contributions at some point in their working lives.

External Resources

• ATO – Super for Employers
• Superannuation Australia

Frequently Asked Questions About Payday Super

• What is ‘payday super’ and how does it affect me?

  Payday super requires employers to pay superannuation contributions at the same time as wages and salaries, rather than quarterly. This ensures employees receive their superannuation benefits more promptly and reduces the risk of unpaid contributions.

• When will the payday super legislation come into effect?

  The legislation will be implemented on July 1, 2026, giving employers time to prepare their systems and processes.

• What should employers do to prepare for payday super?

  Employers should review their payroll systems, update their processes, and train their staff to ensure they can accurately and efficiently process superannuation payments concurrently with wages.

• What are the penalties for non-compliance with the payday super rules?

  The ATO may impose penalties for non-compliance, including fines and increased scrutiny of payroll practices.

• Will payday super benefit all employees equally?

  Payday super is expected to particularly benefit lower-income earners and those with frequent job changes, who are more vulnerable to unpaid superannuation.