Superannuation should be for everyone, says the Association of Superannuation Funds of Australia (ASFA), which is calling for the minimum threshold for receiving Super Guarantee to be abolished.
ASFA says the $450 a month wage threshold to receive Super Guarantee (SG) means 220,000 women and 145,000 men are missing out on around a total of $125 million in super contributions each year.
“Low income Australians need SG too, to help put them on the road to comfort in retirement,” said ASFA, noting that the threshold particularly affects women who work casual or part-time jobs with more than one employer.
ASFA CEO Dr Martin Fahy said that it was about time for total equality with SG and that removing the $450 SG threshold would boost the retirement savings of many women and young people.
“When we are faced with glaring gaps in income and retirement equality for women in this country, any lever that can be pulled to help fix things should be pulled,” he said.
ASFA says that employers now generally have an automated system to pay wages and superannuation, meaning it can be more complicated to work out if an employee is below the threshold than to pay the contribution.
“It’s also wrong to deprive part timers of what in effect is a part of the remuneration for the job they are doing,” Dr Fahy said.
“Employers do not top up the pay of those below the threshold for the missing super contributions.”
“Removal of the threshold is a long overdue correction. As more and more people build portfolio careers around the gig economy, we need to move with the times and recalibrate SG to meet their needs.”
“Regardless of whether you have a full time, part time or casual job, if you earn more than $450 (before tax) in a calendar month, your employer should currently pay super contributions for you.”
“Everyone needs super. It’s time to level the field, give everyone the entitlement of super and strengthen the super system by removing any impediment to providing a fully universal means to build wealth,” said Dr Fahy.