Yahoo Finance Calls for major superannuation change in 2023 budget
A major change to how and when superannuation is paid has been called for.
Did you know that your superannuation contributions aren’t necessarily paid at the same time as your wages, despite it showing on your payslip? Well, Super Consumers Australia (SCA) wants that to change.
SCA has called for super to be paid at the same time as wages to stop the “scourge of unpaid super” on people’s retirement savings.
“These long delays in super payments are a relic of a paper-based era. It is time for the law to reflect people’s expectations.” SCA director Xavier O’Halloran said.
Also read: $300k superannuation boost for these Aussies
“Not paying super on time can lead to real consumer harm. It can lead to people missing out on months of investment returns or failing to pay insurance premiums due to lack of funds.
“It can be months before people realise there is a problem and, by the time they get to act, their employer may have gone insolvent. Real-time payment will strengthen both individuals and the Australian Taxation Office’s ability to identify stolen super in a timely manner.”
While most wages are paid monthly or fortnightly, super payments can be made quarterly, leading to the misalignment between the super payment seen on a payslip and the amount actually deposited into the super fund.
Your boss could be underpaying you
Industry Super Australia previously called on the government to change the way superannuation was paid because the current system allowed companies to underpay staff.
“Most employers do the right thing, but some bosses exploit the misalignment to hide underpayments from their staff – dudding their workers and gaining an unfair advantage over competitors in the process,” ISA said.
“The outdated law is the key reason workers have been underpaid a staggering $33 billion over seven years, losing an average of $4.7 billion in unpaid super each year.”
ISA said modernising the law to align the payment of super with wages in the upcoming federal budget would not only drastically reduce unpaid super rates, it would also boost the retirement savings of all the 4.2 million workers who were paid super quarterly.
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