Australians earning less than $450 a month from a single job will soon begin receiving super contributions from their employers.
Federal parliament has passed superannuation legislation that removes the $450 per month income threshold under which employees do not receive the super guarantee from their employer. The changes will come into effect on 1 July.
It’s estimated the new laws will affect around 300,000 lower-income Australians, of which 63 per cent are women.
“This will remove an outdated structural feature of the superannuation system and in doing so will improve equity in the system,” said Treasurer Josh Frydenberg.
“Through these measures, the Morrison government is ensuring the superannuation system works harder for all Australians by strengthening protections around the retirement savings of millions of Australians.”
Reforming Australia’s superannuation system has been a priority for the government, which has also passed the Your Future, Your Super legislation, which came into effect 1 November 2021.
The Australian Institute of Superannuation Trustees (AIST) says the changes are long overdue, and while welcome, still don’t do enough to address inequities in the retirement system.
“The super industry has long called for the scrapping of this arbitrary limit on employer super contributions, so we welcome the passage of the legislation,” said AIST CEO Eva Scheerlinck.
“This is an important equity measure that will make an immediate difference to the retirement outcomes of some of Australia’s most disadvantaged workers, including women, who make up two out of three of those impacted, many of whom work in two jobs just to make ends meet.
“However, a lot more needs to be done to address the difference in super balances between men and women.”
The gender inequality in the superannuation system is a long-unaddressed problem in Australia, with women on average retiring with 47 per cent less super than men.
On average, full-time working women earn 18 per cent less than men; 43 per cent work only part-time and the average time out of the workforce to care for children is five years.
Debby Blakey, CEO of health and community services super fund HESTA, says women make up more than 80 per cent of her fund’s members and that scrapping the earnings limit is a step in the right direction.
“Our members spend their working lives caring for others and the long overdue removal of this threshold will ensure they’ve now got a better opportunity to enjoy a more financially secure retirement,” she says.
“The requirement to earn $450 per month with one employer before you get paid super has compounded financial insecurity for casual and part-time workers, who often have lower pay and are in insecure or precarious work.
“Super is for all Australians and ending this outdated measure helps make our super system fairer for women and those on lower wages.”
Will this change mean more super for you? Are you confident you’ll have enough in retirement? Let us know in the comments section below.
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