Super savings of low-income earners - predominantly women - to benefit from Budget announcements

Women & super
10 June 2021

During the Federal Budget 2021/22, the Government proposed that from 1 July 2022, the $450 per month minimum threshold for employer super guarantee (SG) payments will be removed.  

According to the Government’s Retirement Income Review, women are more likely to earn less than $450 per month from one employer and consequently not receive super payments. The review found that this affects around 197,000 women, compared to 114,000 men.* 

CareSuper CEO Julie Lander says this is a welcome and long-awaited change to make super fair for all Australians. 

‘We’ve been advocating for the removal of the SG threshold alongside other industry funds for many years. It’s a change that will improve the retirement outcomes for low-income earners, particularly women, assisting them to grow their super account balances and bridge the gender super gap,’ she said. 

While, if approved, this measure will help to progress economic security for women, we still have a long way to go. Removal of the $450 SG threshold is a good start, but this doesn’t help older, single women, who are more dependent on the Age Pension and are the fastest-growing cohort of homeless people in Australia. This Budget was also silent on the gender pay gap, which currently sits at 13.4%^ and missed an opportunity to mandate SG payments on the Commonwealth Paid Parental Leave scheme, meaning that women continue to miss out on super when on parental leave.

Pleasingly, there was no mention in Budget announcements of delaying the increase of SG payments from 9.5% to 10% on 1 July 2021. Current legislation means that SG payments will gradually increase to 12% over the next 5 years. 

It’s promising to see the Government introducing measures targeted towards improving women’s financial outcomes in retirement. But it’s still important to take control of your financial future. One of the keys ways you can do this is by only having one super account, so you pay a single set of fees and maximise the growth of your super contributions through the power of compound interest.# We’ve shared some more ways you can improve your financial wellbeing now and set yourself up for the future here

*Retirement Income Review Final Report. Published 20 November 2020, chapter 3 Equity, Page 269. 
^Australia’s Gender Pay Gap Statistics 2021. Published 26 February 2021. 
#Before combining your super into CareSuper you should consider whether this is right for you. You should also check the impact on any insurance arrangements (such as loss of insurance) or other benefits.