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Payday super changes everything

ABN Director Peter Thorp describes the recent payday superannuation changes announced for rollout in 2026 is a complete transformation of the system that needs all the time allocated to get the whole industry ready.

The Federal Budget announcement of Payday superannuation will come into force at the beginning of the 2026-27 financial year. A collective breath was held across the nation among every industry person, business, and association linked to administering superannuation.

The announcement of these changes sees employee superannuation cash flow brought forward from 28 days after the end of the quarter to every pay day, with processing of super now expected up to 52 times a year, rather than four times a year.

Australian Bookkeepers Association (ABA) Director, Peter Thorp, who has been significantly engaged in the Treasury consultations in the lead up to and since the announcement, said the change is a major transformation unlike anything the tax system has seen in decades.

“This affects everyone,” said Peter. “We’ve never seen any change like it in recent memory.

“The whole system is rearranging the approach,” continued Peter. “It will force change to systems that are over 30 years old affecting employees, employers, bookkeepers and accountants, super clearing houses, accounting software providers, and everyone in between.

“There are so many changes needed,” said Peter. “The current Super Guarantee Charge system will need to be significantly re-engineered, and maybe even scrapped altogether.

“At the least we need to update the platforms and software that can facilitate immediate payment.

“Quicker communication is also needed with super funds to accurately characterise the recipient and nature of the contribution.”

ABN agrees the large-scale change was a long-time coming and is welcomed, but the degree of the change wasn’t expected and it will need every ounce of time to reshape the systems to deliver it.

“The Treasury consultation process was thorough and inclusive, which confidently backs the brave move made to combat the growing problem of unpaid Super Guarantee,” said Peter.

“The change will take adjustment and will be tough on employers that don’t have regular cash flow including seasonal businesses,” said Peter. “There’ll be additional costs in software, administrative labour and transaction costs.

“Employees will particularly benefit over time as they’ll receive Super Guarantee payment earlier, closer to the time they earned it, rather than wait to the end of each quarter.”

To keep in touch all major announcements to the payday super changes, along with bookkeeper insights, register to become an ABN member.  

Category
ABN
Published
17 Aug 2023
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