There is no time to waste in fixing superannuation for the gig economy, says Association of Superannuation Funds of Australia (ASFA) CEO Dr Martin Fahy.
“Gig economy platforms continue to show exponential growth so we need to ensure those involved are not losing out on super,” he said.
“The gig economy can and should be part of the solution for funding retirement rather than a problem.”
“The gig economy, where buyers and sellers of goods and services are matched or organised via web based platforms, can offer positive benefits and facilitate portfolio careers especially for people transitioning into retirement.”
ASFA recommends, in its 2018/19 Pre-Budget submission, that the Government introduce a new ‘dependent contractor’ category in the Super Guarantee rules
“ASFA recommends amending the law to create a new ‘dependent contractor’ category that sits between employee and independent contractor categories and will enhance protections and obligations,” said Dr Fahy.
““This would provide super to people in the gig economy who essentially work like employees but without the associated benefits. Around the world there is increasing attention on getting policy settings right for gig economy workers.”
ASFA also recommends getting tougher on sham contracting, require the self-employed to pay Super Guarantee and remove the $450 monthly threshold for SG.
Dr Fahy said ASFA estimates around 50,000 Australians are affected by sham contracting at any one time.
“It’s a shame, but the reality is some employers will go out of their way to artificially create contractual arrangements to avoid paying entitlements.”
It is unclear from the submission how ASFA envisions the self-employed paying SG would operate. The submission says: “Extending coverage of the SG to the self-employed will of course require a definition of employment income against which compulsory superannuation is to be applied, and a mechanism and timelines for making the superannuation contributions.”
“The contribution rate could be phased in over a number of years – as was the case for the SG rate for employees. If the initial contribution rate was set at a relatively low level, such as two per cent, the revenue impact would be smaller, at around $200 million. Phasing would also help the self-employed adjust to the change, with growth in employment earnings of the self employed being available to help fund the contributions with only a minimal impact on disposable income for the self-employed.”