Thursday, 10 February 2022
Hundreds of thousands of Australians will be better off in retirement after Parliament this afternoon passed legislation removing the income threshold for superannuation payments.
Aware Super Chief Executive Officer Deanne Stewart welcomed the removal of the $450-per-month superannuation guarantee threshold, saying it was a win for part-time and casual workers with low incomes – particularly women.
From July 1, all employees aged 18 and over will have to be paid superannuation, regardless of how much they earn.
At the moment, employers do not have to pay super to employees who earn less than $450 per month. Even those employees who work multiple part-time or casual jobs – and earn more than $450 in a month as a result – are not entitled to super payments.
Ms Stewart said Aware Super had been advocating for the threshold to be removed for some time.
“This change has been a long time coming so we’re delighted it’s finally locked into law,” she said.
”The threshold was arbitrary and illogical. It punished hundreds of thousands of low-income Australians in part-time and casual work – including young people finding their feet in the workforce and casual employees in the gig economy – short-changing them of valuable retirement savings.
”It was especially harmful for women, who are much more likely than men to have part-time and casual jobs. About 300,000 Australians have been missing out on super because of the threshold, and almost two thirds of those are women.
“Women typically retire with far less super than men, and are far more likely to retire in poverty. While there are many reasons for this – including some deeply-entrenched structural issues – removing the $450 threshold is clearly a step forward.
“Australia’s superannuation system is among the best in the world, but there’s room for improvement and this reform does just that. We commend the Government for introducing the legislation to remove the threshold, and Parliament for seeing it through.
”Of course, there are more steps Australia must take to improve the system and to close the gender superannuation pay gap, such as legislating for super to be paid on parental leave, and improving the accessibility and affordability of childcare to help more women back into the workforce. We’ll continue to advocate for these and other important initiatives.”