Low-income earners to get a super boost
In a welcome and long-awaited change, the Government has passed legislation to remove the $450 monthly income threshold for super guarantee (SG) contributions. Thanks to this change, from 1 July 2022, an estimated 300,000 Australians will become eligible to receive super contributions.
First announced in the Federal Budget 2020/21, the removal of the SG threshold is an important step towards improving the retirement savings of low-income earners, particularly women.
According to the Government’s Retirement Income Review, women are more likely to earn less than $450 per month from one employer, meaning they’re not eligible to receive super payments. The review found this affects around 197,000 women, compared to 114,000 men.*
CareSuper CEO Julie Lander welcomes the change and said CareSuper has been advocating for the removal of the $450 threshold, alongside other industry funds, for many years.
‘The $450 per month SG threshold penalised an estimated 300,000 Australians – mostly women – who work in part-time or casual roles and has contributed to the gender super gap.’
‘While we’re pleased to see the Government introducing measures targeted towards improving the economic security of women, more still needs to be done. This includes paying super on paid parental leave, addressing the gender pay gap and ensuring there are no delays to the legislated timetable to increase the super guarantee to 12 per cent,’ said Julie.
The removal of the SG threshold is a significant change, which will lead to positive outcomes for the retirement savings of low-income earners. But we still have a long way to go to close the gender super gap and our members can count on us to keep advocating for their financial wellbeing now and in the future.
*Retirement Income Review Final Report. Published 20 November 2020, chapter 3 Equity, Page 269.