Federal Budget paves the way for super to be paid on the same day as wages

22 May 2023

Employers would be required to pay Superannuation Guarantee entitlements to employees on the same day as they pay salary and wages, rather than quarterly, under changes proposed by the Government in the Federal Budget 2023/24.

The measure is called payday superannuation and, if passed into law, is proposed to take effect from 1 July 2026. It is expected to benefit lower paid and casual workers who are more likely to miss out when their super is paid less often.

The Government estimates that payday superannuation will improve the retirement outcomes for about 8.9 million workers.

Tackling underpayment of super

The Budget also included funding for the Australian Taxation Office (ATO) to crack down on the underpayment of superannuation.

This will enable the ATO to improve data matching capabilities to identify and act on cases of Superannuation Guarantee underpayment.

Tax changes for total super balances above $3m

As expected, the Government pushed ahead with its plans to increase the tax rate for people with total superannuation balances of $3 million or more.

The proposed changes, which could take effect from July 2025, will levy a new tax of 15% of earnings on the proportion of an individual’s total superannuation balance that is greater than $3 million.

The existing tax rate of 15% will continue to apply to earnings while in accumulation phase, or 0% if held in a retirement pension account.

Defined benefit schemes will be included in the new regime. The Government said defined benefit schemes would be appropriately valued and have earnings taxed in a similar way to other interests.

The new measure is expected to affect about 80,000 people.

Sustainable investment

On the investment front, the Government announced it would seek to facilitate investment in sustainable industries through three new initiatives:

• A new sustainable finance taxonomy – a classification system that can help investors understand whether an economic activity is environmentally sustainable. This could help make it easier for investors to target their funds towards sustainability projects.
• Tackling greenwashing – proposed funding for the Australian Securities and Investments Commission will help with enforcement on organisations engaging in greenwashing (which is when misleading or unsubstantiated claims are made about the environmental impact of a product).
• A sovereign Green Bond program – fixed income bonds that provide financing for specific government programs with positive climate change and environmental outcomes. This could give investors opportunities to support public projects that contribute to climate change and environmental objectives.

Guiding you through the changes

The announcements made in the Federal Budget are not yet law. As your superannuation provider, Brighter Super will keep you informed of any further developments with the proposed changes.

We understand these proposals may create uncertainty. We will ensure you have access to the latest information and support, helping you to make informed decisions about your super.

We’re here to help

Brighter Super’s team of qualified professionals can provide advice and guidance on your superannuation and your future.

Our financial advice service can help you plan for a better financial future*. Members can receive limited advice on a single issue related to superannuation, at no additional cost. More comprehensive financial advice is also available, and fees will vary depending on the type and complexity of advice.

We also offer our members Super Health Check appointments over the phone or video call, at no additional cost. We look at your superannuation account, discuss different ways to grow it, and check that you are on track for a comfortable retirement.

Call us on 1800 444 396 to discuss the type of appointment that would suit you best.