Friday, 24 June 2022
Hundreds of thousands of Australians will be better off in retirement as we countdown to common sense and officially say goodbye to the $450 income threshold for superannuation payment on July 1st. This will mean employees aged 18 and over will have to be paid superannuation, regardless of how much they earn.
In real terms, a member aged 47 with a salary of $450 per week would accumulate a balance of about $56,000 in 20 years’ time. This would translate to an additional income in retirement of $3,100 p.a. But the real winners are likely to be gig economy workers who fill a small number of hours each week in multiple jobs with different employers.
Aware Super Chief Executive Officer, Deanne Stewart said this is something the Fund has been advocating to be removed for some time.
”The $450 threshold was arbitrary and illogical. To see this important reform finally come into effect is a huge win, particularly for people working in the gig economy, for part-time or casual workers with lower incomes, and for women. This change has been a long time coming so we’re delighted it’s finally here,” said Ms Stewart.
“It affected some 800,0001 Australians working in the gig economy, juggling two or three jobs where one or more might fall below the threshold, meaning they have been short-changed of valuable retirement savings. Many of these workers are within the Healthcare and Education sectors – two pillars of our communities that have delivered so much for us all over the past two years.
“It punished hundreds of thousands of low-income Australians in part-time and casual work – including young people finding their feet in the workforce. But it was especially harmful for women who are much more likely than men to work in these types of roles.
“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.
“With many of our members women, and working in these essential roles, you can see why this has been such a focus for us. Australia’s superannuation system is among the best in the world, but this is a significant improvement for the workers who will wake up on 1 July with markedly better retirement prospects.
”Of course, there are further steps we must take 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.”