Paying superannuation on pay day is now in effect, and is expected to boost workers’ retirement savings by thousands of dollars.
From 1 July, your employer must now pay superannuation contributions with each pay cycle, instead of every three months.
This simple change will lead to higher super balances for many Australians and improve transparency around these payments.
When superannuation is paid quarterly, the benefits of compound interest are lost for the individual – that money is sitting with the employer for 3 months when it could have been earning interest for the employee.
Over the course of a working life, workers will see their super balances boosted by almost $8,000 on average.
Superannuation is a part of your pay and paying it at the same time as your wages is a simple but significant reform that will help maximise your retirement savings.
The Albanese Labor Government has also committed to a major change to superannuation for under 18s.
The Labor Party has promised to expand superannuation to all workers under 18 regardless of how many hours they work.
Currently, young workers only earn superannuation if they work more than 30 hours per week. This restriction has set young workers back and prevented them from saving for their retirement when they start work.
The SDA has called for this change for years and we’re pleased to see the Albanese Government back this important reform.