Minimum Super Guarantee threshold disadvantaging Aboriginal peoples

The $450 monthly income threshold to receive Superannuation Guarantee payments disadvantages Aboriginal and Torres Strait Islander peoples and should be removed, says the Indigenous Superannuation Working Group (ISWG).

Under current rules employers are not required to pay Super Guarantee to employees over the age of 18 if they earn less than $450 in a month.

The ISWG points to ABS data which estiamtes 220,000 Australian women and 145,000 men are missing out on about $125 million of superannuation contributions each year due to the threshold.

Jo Naquesage, Chair of the ISWG, said the minimum SG threshold affects low income earners, and many Aboriginal and Torres Strait Islander peoples tend to be in that group.

“The weekly household income for Aboriginal and Torres Strait Islander adults is almost half that of other Australian adults so they are more likely to be affected by the income threshold,” said Ms Naquesage.

“As a result, many Indigenous people aren’t being paid superannuation from their employer meaning less compound interest is being earned, and ultimately, they are getting less money in retirement.”

Amanda Young, First Nations Foundation CEO and ISWG member, agrees that the SG threshold is holding back Aboriginal and Torres Strait Islander peoples in their ability to have a decent
retirement.

“Many Aboriginal and Torres Strait Islander people hold down several jobs, each earning under the threshold so no superannuation is required to be paid. For example someone working nearly fulltime across several child care centres, but only for a few hours each, will most likely miss the threshold at any one centre and therefore not get paid any super,” said Ms Young.

“There’s a big inequality gap which needs to be addressed. Fair’s fair – as a society we need to help everyone achieve a dignified retirement.”

The ISWG says Aboriginal and Torres Strait Islander people face many challenges in accessing their superannuation, including verification of identify, issues with communication, different cultural practices and life expectancy differences.

Ms Naquesage said removing barriers like the $450 threshold is an important step, though a number of the challenges would remain.

“Superannuation should be a universal entitlement without income exceptions,” said Ms Naquesage.

“We’re calling on the Government to update the policy and give everyone – regardless of their income – a fair go at saving for retirement.”

The Indigenous Superannuation Working Group is a cross industry initiative, which includes the First Nations Foundation, AIST, ASFA and FSC among it members, along with a number of superannuation and other industry groups and companies.

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