Superannuation will have to be paid the same time as wages are paid under laws that have just passed parliament. Photo: Josie Elias.
Labor’s Superannuation Guarantee bill has passed through Federal Parliament, meaning a new law will require employers from July next year to pay their workers’ super at the same time they pay their salary and wages.
Treasurer Jim Chalmers and Assistant Treasurer Daniel Mulino were so pleased with the outcome of the vote that they issued a joint statement on Tuesday (4 November) to applaud the development.
“From the 1st of July next year, employers will be required to deposit their employees’ super into accounts within seven business days of payday,” they said.
“This will strengthen Australia’s superannuation system and help deliver a more secure retirement to more Australian workers.
“Employees will benefit from more frequent and earlier super contributions that will grow and compound over their working life.
“In a typical unpaid super case for a 35-year-old, recovering their super leaves their retirement balance more than $30,000 better off in today’s dollars.
“While most employers do the right thing, the Australian Taxation Office estimates $6.25 billion worth of super went unpaid on the most recent financial year data.”
Employers will be liable for a redesigned superannuation guarantee charge if the employee’s fund is not paid within seven business days of their payday.
The Council on the Ageing (COTA) welcomed the successful passage of the legislation, describing it as a significant step in helping Australians secure their retirement funds.
“Paying super on payday will help more Australians retire with dignity,” COTA chief executive officer Patricia Sparrow said.
“This is a really positive reform that means people will finally get their super when they earn it – not months later.
“It’s a simple, fair change that will make a big difference over a lifetime.
“Australians work hard for their super. This change will particularly benefit women, older workers and those in casual or part-time roles who often miss out the most.”
The Greens proposed an amendment to the bill aimed at ensuring that all 18-year-old workers receive super contributions, regardless of their hours worked.
To be eligible for super, under-18s need to work at least 30 hours a week for the same employer.
With many young people juggling paid work with school and study commitments, they are unable to reach the required 30 hours per week.
Greens workplace relations spokesperson Barbara Pocock said that meant hundreds of thousands of young workers are missing out on super.
The Federal Government refused to support the Greens’ change and voted the amendment down.
“Labor had a chance to back young workers so that all of them are paid super contributions from their employers regardless of their hours. Instead, they voted against it,” Senator Pocock said.
“For too long, workers under 18 have been missing out on super, setting them back financially and costing them thousands early in their careers.
“The Greens want super contributions extended to all under-18s, ensuring every young person is paid super on every dollar they earn, no matter how many hours they work.
“Under 18s pay taxes and contribute to our economy, so why shouldn’t they receive super?”
Once the new law takes effect, it will also require employers to assist the ATO in enforcing the law and more quickly identify employers who are not making contributions.
The ATO is currently consulting on its approach to compliance for the 12 months following the change. It states that its approach will differentiate between low- and high-risk employers.
It will mean that employers who make an effort to pay contributions in line with each pay cycle can fall into the low-risk category.
The Treasurer said unions, industry, businesses and the broader community all provided valuable feedback, engagement and views on the legislation before it was finalised.
Original Article published by Chris Johnson on Region Canberra.
