Australian workers are set to retire with thousands more in their superannuation accounts after changes to how the money is paid.

From July 1, 2026, employers will need to pay super at the same time as wages and salary.

The changes will leave the average 25-year-old earner about $6000, or 1.5 per cent, better off in retirement because more frequent payments leave more time for compounding interest.

Treasurer Jim Chalmers said the simple change was common sense.

“It will strengthen the system and will boost retirement incomes,” he told ABC.

“The main reason for that is it will make it less likely that people will miss out on the super that they’ve earned and that they’re entitled to.”

Dr Chalmers said the lead time would give businesses a long enough grace period to adapt to the changes.

“We have deliberately given employers and super funds and others a long run-up until 2026 so that they can prepare for this change,” he said.

The Australia Tax Office estimates $3.4 billion in super was unpaid in 2019/20.

The ATO’s resources will be boosted to crack down on compliance and it will have a new target for recovery payments.

Super Consumers Australia said the decision would better enable people to manage their money and ensure they are paid what they are owed.

“Our recent survey found the majority of people don’t realise they can report non-payment to the ATO and that it is the regulator’s responsibility to investigate,” the organisation’s director Xavier O’Halloran said.

“We encourage people to report unpaid super to the ATO if they can’t resolve the issue directly with their employer.”

The Association of Superannuation Funds of Australia said it was important employers were held to account.

“Left unaddressed, the issue of unpaid superannuation guarantee contributions comes at a significant cost to people’s retirement,” deputy CEO Glen McCrea said.

“For example, a 35-year-old on $65,000 per year who misses out on SG for two years would be around $24,000 worse off in today’s dollars at the time of retirement.”

ACTU assistant secretary Scott Connolly said the move would fit well with other changes to the system.

“Working people will also soon have superannuation recognised as a workplace right in the National Employment Standards, meaning workers and their unions can commence recovery action sooner to stem the haemorrhaging of retirement savings,” he said.

“Every worker should have the right to have 100 per cent of their super paid on time, all the time.”