In the 2022-2023 financial year, Australians missed out on a staggering $5.7 billion in superannuation contributions due to employers failing to pay their workers’ entitlements correctly. According to the Australian Taxation Office (ATO), this issue affected over three million workers across the nation. The loss, which averages about $1,730 per impacted worker, is a significant blow to retirement savings, highlighting ongoing flaws in the system.
With the potential to undermine financial security for millions of Australians, the situation has prompted widespread calls for reform. In particular, the concept of “payday super”—which would require employers to pay superannuation entitlements alongside regular wages—has gained traction as a solution. However, this reform has not yet been fully legislated, and industry experts warn that further delays will cost Australian workers even more in the long run.
$5.7 Billion Lost to Unpaid Superannuation
Data from the ATO revealed that the superannuation entitlements of around 3.3 million Australians went unpaid last year. This includes workers in various states and industries, with the amounts differing across regions. New South Wales saw more than one million workers missing out, with an average shortfall of $1,760 per person. In Victoria, over 848,000 workers lost out on an average of $1,670, while Queensland saw 679,000 workers affected, with an average loss of $1,720.
The overall increase in unpaid superannuation from the previous year was significant—an additional $600 million was lost to unpaid entitlements, bringing the total weekly loss to approximately $110 million. These figures underscore the growing problem that could affect workers’ long-term financial security, particularly as they approach retirement.
The Push for Payday Super Reforms
To address the ongoing issue of unpaid superannuation, experts are advocating for “payday super” reforms, which would ensure that employers pay superannuation at the same time as wages. Currently, employers are only required to make super contributions on a quarterly basis, which leads to delays and discrepancies in payments.
The proposed reforms, first announced in May 2023, would make super payments a mandatory part of every payroll cycle, ensuring that workers receive their full entitlements in real time. Supporters of the reform, including Super Members Council Deputy CEO Georgia Brumby, argue that it would help eliminate unpaid superannuation and provide a more predictable and reliable system for workers. According to Brumby, the reform could add nearly $8,000 to the average Australian’s retirement savings due to the benefits of more frequent contributions and compounding interest.
Industry Concerns and Delays
Despite the potential benefits, the reform has faced opposition from some accounting bodies. CPA Australia, CA ANZ, and the Tax Institute have all voiced concerns about the proposed July 2025 start date for the payday super reforms. They argue that the complexity of the superannuation payment system, which involves clearing houses, payment gateways, and super funds, could make a 2025 start date unrealistic. Instead, these groups are pushing for a delay of at least one to two years to allow businesses and the superannuation system adequate time to prepare for the changes.
These delays could further exacerbate the financial strain on workers who are already losing out on their superannuation entitlements. While the push for reform is widely supported, the uncertainty around its implementation timeline leaves many workers in limbo, unsure of when they can expect improvements to the system.
The Long-Term Impact on Workers’ Retirement Savings
For millions of Australian workers, the missing superannuation funds represent a significant portion of their retirement savings. If this issue continues unchecked, it could lead to lower retirement incomes for those who are already struggling to save for the future.
The ATO’s data shows that the problem is not just about individual payments—it’s about the systemic issue of delayed and missed superannuation contributions. This has long-term consequences, as every missed payment means less money working for workers’ futures through the power of compounding interest. If the payday super reforms are not enacted soon, workers will continue to lose out on essential retirement funds that could help secure their financial independence in later life.
As calls for reform grow louder, the question remains: will lawmakers act quickly enough to address the superannuation issue, or will millions of Australians face a retirement with less financial security than they deserve?
