The Australian government has passed historic reforms to the superannuation system. These changes will make it easier for payers and payees to transact and increase the likelihood that workers build retirement savings. Parents and childcare teachers are ecstatic. The new legislation passed federal parliament on Tuesday unanimously. It requires that employers be required to pay superannuation in line with wage payments, beginning from July 2026. Shifting to a workday that’s better aligned with evening commutes will improve outcomes for employees, too. In fact, the Australian Taxation Office (ATO) found that 21% of Australians have multiple superannuation accounts.
Treasurer Jim Chalmers on the transformative power of these reforms He said they should increase the balance of the average 25-year-old worker by the equivalent of “an additional $6,000 in today’s dollars.” The reforms do a good job of addressing the issue of late superannuation payments. This confusing policy consistently causes workers to mistakenly make multiple accounts.
On existing legislation, employers are only required to pay superannuation a minimum of four times a year. These payments need to match specific quarterly due dates. The modelling of these reforms suggests it’s quite likely. Disallowing late payment creation would dramatically reduce the instances of Australians having to deal with multiple accounts. This amendment would lead to hundreds of millions of dollars in additional savings for employees — between $16 and $280 million depending on the service.
Even with these improvements, there are still serious issues with whether employees will be adequately protected from being misled into opening unnecessary duplicate super accounts. Super Consumers Australia Xavier O’Halloran issued a stinging criticism of the reforms. He’s skeptical they’ll go far enough. He stated, “People will get paid their super faster, but many will still be misled into creating multiple accounts, costing them tens of thousands in retirement income.”
O’Halloran further acknowledged that although quicker payments are a positive step, their adoption doesn’t completely address the issue of duplicate accounts. He remarked that, “It was meant to stop people [from] being influenced into creating duplicate accounts they never wanted, and that part has been dropped.”
We’ve made the onboarding experience for all new employees a priority. This will be useful for them to know as they decide if they do indeed have an “existing stapled fund.” And finally, every year, about 325,000 people enter an open talent pool via contract and freelance work platforms. It’s important for them to understand their choices and make informed decisions.
Misha Schubert, a Super Consumers Australia representative, revenueing the reforms a “game-changer.” Combined, these changes will make sure that workers get every dollar in superannuation that they have earned but never turned up to their account. Schubert emphasized the importance of tracking any underpayments or missed payments: “It will make it a lot easier to track any underpayments of super or missed payments.”
The proposed ban on reasonable delayed payments would increase costs to employers by $234 million annually. This begs the crucial question of how industry will bear the financial cost of meeting the new standards. Mary Delahunty, chair of the Victorian portal, acknowledged that these reforms are a good start. She reiterated that there’s never enough done in super.
Chalmers and Assistant Treasurer Daniel Mulino further stressed their commitment to improving retirement outcomes for all Australians, stating: “We’ll continue partnering with policymakers to strengthen disclosure frameworks and improve retirement outcomes for all Australians.”
