Australia’s superannuation landscape has been undergoing a progression of significant change, with recent amendments to the National Employment Standards (NES), the slated introduction of payday super, and ongoing measures to address non-compliance with the Superannuation Guarantee (SG) rules.
In this article, we provide a snap-shot of these developments to help you keep abreast of what is happening in the superannuation space.
NES Amendments: A Right to Superannuation
The Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 enshrines the right to superannuation contributions in the National Employment Standards (NES) from the 1st of January 2024.
This right empowers employees to take legal action under the Fair Work Act to recover unpaid or underpaid superannuation.
This change supplements the superannuation guarantee laws currently administered by the ATO.
When onboarding new staff, employers should be mindful that the Fair Work Information Statement has been updated to reflect this new right.
Payday Super
In a joint media release with the Hon Treasurer Jim Chalmers MP, Prime Minister Anthony Albanese announced the introduction of payday super, marking a fundamental shift in the timing of superannuation payments.
Under the proposed payday super system, employers will be required to remit superannuation contributions at the same time as salaries & wages from the 1st of July 2026.
The Government has undertaken consultation on the design of the payday super system and is expected to reveal the details on the design as part of the 2024/25 Federal Budget which is due to be handed down in May.
Superannuation Guarantee (SG) Compliance
Back in November, the ATO released their annual statistics on SG compliance.
These statistics show that employers are paying over 94% of the required SG contributions without ATO intervention.
However, the superannuation gap of $3.6 billion remains a significant cause for concern.
The ATO continues to focus on policing SG non-compliance and are expanding their use of Single Touch Payroll (STP) data to further improve compliance activities.
With Single Touch Payroll and SuperStream now entrenched in the SG compliance landscape, the net is closing on non-compliant employers.
Superannuation Guarantee (SG) Contribution Rate: Another Increase Coming
The SG contribution rate is progressively increasing until it hits 12% from the 1st July 2025.
The SG rate is currently 11% and will increase to 11.5% on the 1st of July 2024.
Employers need to take steps to ensure that they pay the correct rate from the 1st of July.
Stapled Super Funds
A stapled super fund is an existing super account that is linked, or ‘stapled,’ to an individual employee.
This means that the super fund remains constant for the employee, following them as they change jobs.
The primary objective is to eliminate new super accounts being opened each time an employee starts a new job.
The introduction of stapled super funds adds an additional step for employers in order to comply with choice of fund rules.
If a new employee:
- completes their Superannuation Standard Choice Form by selecting ‘my employer’s default super fund’; or
- neglects to return a completed form.
The employer will be required to check with the ATO to see if the employee has a stapled super fund.
Where there is a stapled super fund, the employer must make SG contributions to that fund.
If there is no stapled super fund, then and only then, the employer should make SG contributions to their default super fund.
The pace of change in the superannuation landscape has been intense in recent times and this article touches on just a few of the myriad changes.
When it comes to managing your employer superannuation compliance, or maximising the outcomes for your personal superannuation, we are here to help.
If you are in need of guidance on compliance requirements, or are interested in strategies to maximise your super, please get in touch.
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Sky Accountants Ballarat
Phone: 03 5332 8855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 5428 1400
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437