Payday super laws introduced to Parliament

Earlier this month, the Government introduced its long-awaited payday super Bill to Parliament. Foreshadowed in the 2023-24 Budget, the proposed legislation will require employers to make occupational superannuation contributions at the same time employees are paid their wages.

Treasurer, Jim Chalmers, explained in his address to Parliament that the proposed laws, set to come into force from July 2026, will provide “a strong incentive for employers to make super contributions for their employees at the same time as they pay the employee’s qualifying earnings”. According to the ATO, employers will be liable for the superannuation guarantee charge (SGC) unless contributions are “received by their employees’ superannuation fund within the required timeframe”, which is generally seven business days after payday.

The shift to “payday super” will purportedly mean a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be about $6000 (or 1.5%) better off at retirement, with the Government explaining that more frequent and earlier super contributions will grow and compound over an individual’s working life. Despite early reservations from small business, Treasurer Chalmers has also previously stated that “payday super” will make employers’ payroll management “smoother” with “fewer liabilities building up on their books”.

A companion Bill introduced to Parliament at the same time will endeavour to reduce the incidence of unpaid super – a form of “wage theft” – by empowering the ATO to “more quickly identify employers not making contributions”. Treasurer Chalmers indicated that the companion Bill proposes to redesign the SGC such that employers will be prompted to “quickly rectify late or missing superannuation contributions” while also simplifying the process to do so.

Preliminary information on “payday super” (which has not yet been signed into law) is available from the ATO while super funds have also been rolling out webinars and information sessions for fund members.

Extension to employer-funded PPL payments

On the same date in early-October, the Albanese Government also introduced a Bill designed to ensure employees remain eligible to access employer-funded paid parental leave if their child is stillborn or dies soon after birth.

Workplace Relations Minister, Amanda Rishworth, emphasised that the Bill does not introduce any requirement on employers to provide paid parental leave where the entitlement doesn’t already exist, but it will “preserve” an employee’s eligibility for paid parental leave where the entitlement would have been provided “under the terms and conditions of the employee’s employment, if the child had not been stillborn or died”. The proposed changes will not disrupt initiatives such as “express stillbirth leave entitlements” that some employers have already implemented, nor is it designed to interfere “when employers and employees bargain and agree conditions in good faith”.

Government-funded payments are already available to employees who experience a stillbirth or the loss of a child soon after birth, by way of the traditional paid parental leave scheme or, the stillborn baby payment.