Workers will get retirement income boost from 'simple change', Treasurer says

The Treasurer, who is in the final stages of preparing the budget, said the move to payday super, due to come into effect from July 1 2026, would boost the retirement incomes of millions of workers.

"This simple change will strengthen Australia's superannuation system and help deliver a more dignified retirement to more Australian workers," Dr Chalmers said, adding it would also help businesses and reduce abuse of the system.

"More frequent super payments will make employers' payroll management smoother with fewer liabilities building up on their books," he said.

"Payday super will also make it easier for employees to keep track of their payments, and harder for them to be exploited by disreputable employers."

The Australian Taxation Office estimates there was $3.4 billion of unpaid super in 2019-20 and the government claims the change will add thousands to super balances.

It said a 25-year-old on a median income whose superannuation contributions were currently paid quarterly while their wages came fortnightly would be about $6000 better off at retirement as a result of the change.

As part of the change, the government will give the ATO extra resources to detect unpaid super and set more ambitious targets for the recovery of payments.

Peak body Industry Super Australia (ISA) has been lobbying hard for the change, claiming that underpaid superannuation has cost workers more than $33 billion in the past seven years.

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ISA chief executive Bernie Dean said aligning the payment of super and wages would help ensure workers did not miss out on the super that they were owed because it would make it easier for them to notice and resolve an incorrect or missing super payments.

Dr Chalmers said the long lead time for the changes would give employers, superannuation funds, payroll providers and others ample opportunity to prepare.

The change it the latest move by the government to tinker with the superannuation system after earlier this year cutting the tax concession on earnings from super balances in excess of $3 million.

The government has also called for the objective of superannuation to provide retirement income be clearly enunciated and legislated.