The announcement in May 2023 that the federal government is mandating the payment of super on payday, rather than once a quarter, was great news for everyone here at IFS.  

Not least our unpaid super team who work, day in day out, to recover unpaid super entitlements for super fund members.

With a shared goal of delivering better outcomes in retirement for all members, we’re thrilled about the benefits that this change should bring. Particularly to those in blue collar, hospitality and retail jobs; to younger workers, those in lower paid, casual and insecure work – and to women who are overrepresented in many of these groups and already retire with around a quarter less super than men*.

But there’s more work than ever for IFS and super funds.

1. With implementation not scheduled until 1 July 2026, that’s at least three more years of workers missing out on the super they’re owed.  If current trends continue, at estimates of $4.7 billion a year#, that’s potentially another $14 billion or more that your members could miss out on before implementation.  

2. While pay day super is expected to put a big dent in SG non-compliance once implemented, ISA’s policy costing assumed a conservative 15%* reduction in unpaid super meaning the work of IFS and our partner funds will continue to be a critical pillar in recovering unpaid super for your members.  

3. We expect to see an initial drop off in the easier cases and more focus needed to deal with the more complex cases where the experience and capability of our Unpaid Super recovery team here at IFS will be particularly valuable.

4. According to the latest Australian insolvency statistics**, the insolvency rates reached the highest levels they had been for the past four years at the end of the 2023 financial year, approaching levels not seen since before Covid. This also looks set to continue into financial year 2024. It emphasises the pressing need for funds to vigorously pursue the recovery of their members' unpaid super, especially within the top five industries facing insolvency (construction, accommodation and food services, other services, retail, and manufacturing).  

5. Employers, super funds, payroll providers and other parts of the super system need sufficient time to prepare for the change – hence the Albanese Government’s decision to schedule implementation for July 2026. There’s much work to be done in implementing the new systems, processes and resources - work for super funds, and work for employers who need our help and education.

At IFS, we have already seen increased contact from employers and funds requesting information about how to prepare. Similarly, the funds we partner with have reported increased requests from employers for assistance.

IFS has recovered almost $2 billion for super fund members since 1994. It’s a highly specialised service, and our experienced team has worked with all types of employers and sectors. We have the capability and technology to recover unpaid super and assist employers in meeting their obligations, while also protecting your valued employer relationships.  

We’re committed to working collaboratively with you to help your fund and your employers prepare for the transition to payment of super on payday.  A system that we all hope will bring better retirement outcomes for members.

Contact Alison McIvor, on 1300 001 386 or info@unpaidsuper.ifs.net.au

#  Industry Super Australia (ISA) data based on 2013-14 through to 2019-20  

*  Industry Super Australia (ISA) assumptions in Treasury submission ‘Policy costing: Payday Super’

**Australian Securities & Investments Commission, Australian insolvency statistics, August 2023.

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