Most self-employed will struggle to afford comfortable retirement: ASFA

The majority of self-employed people have little or no superannuation, research by the Association of Superannuation Funds of Australia (ASFA) has found.

The research found that most self-employed people – who account for around 10% of the workforce – will struggle to afford a comfortable retirement. The majority of the self-employed have lower super balances, across all age groups, compared to employees, with women at a “particular disadvantage”.

ASFA found that 19.1% of self-employed people have no superannuation, compared to 8% of employees. Read more...

Leaving SG rate at 9.5% condemns low-paid to poverty in retirement

A proposal to not increase the Super Guarantee rate condemns low-paid workers to poverty in retirement and women to relying on rental handouts, says the Association of Superannuation Funds of Australia (ASFA)

The Grattan Institute recently argued in a research paper that superannuation is not effective in providing retirement incomes for low-income workers. Instead of raising the Super Guarantee rate, the Institute called for lower superannuation tax concessions and boosting rental assistance for retirees. Read more...

Super Guarantee crackdown doesn’t go far enough: Nick Xenophon Team

Employees are “short-changed” by proposed Government legislation cracking down on Superannuation Guarantee underpayment that doesn’t go far enough, says the Nick Xenophon Team.

NXT MP Rebekha Sharkie said: “While the Nick Xenophon Team welcomes the fact that the Government is finally paying attention to this issue after we introduced our own Private Member’s Bill last year to try and fix the problem, we feel the Government’s draft legislation fails to give employees any real power to fight for their own money.” Read more...

Draft Bill targeting Superannuation Guarantee underpayment released

The Government has released draft legislation aimed at cracking down on Superannuation Guarantee underpayment.

A draft of the Treasury Laws Amendment (Taxation and Superannuation Guarantee Integrity Measures) Bill 2018 has been released for consultation.

If the draft Bill is passed the ATO would have the power to disclose information to an employee about a failure, or suspected failure, by an employer to comply with their Super Guarantee obligations.

The Bill would also give the ATO the power to issue a direction to an employer to pay unpaid and overdue Superannuation Guarantee, or to undertake an approved education course on the SG obligations. Changes are also made to director penalties, including the ‘lock-down rule’. Read more...

Government officially drops Super Guarantee penalty changes

The Government has officially dropped its proposed winding-back of penalties for underpayment and late payment of Superannuation Guarantee, while announcing other measures to tackle SG non-compliance.

The Government had intended to “simplify” and make the SG charge and penalties “more proportionate” to non-compliance. This included changing the calculation of the SG Charge from total salary and wages to the less-encompassing Ordinary Time Earnings, reducing the time over which interest was charged and changes to the SG charge penalty. Read more...

Recovering unpaid super Bill introduced by Xenophon Team

A Bill to help recover unpaid superannuation has been introduced to the Parliament by the Nick Xenophon Team.

The Nick Xenophon Team (NXT) has introduced the Fair Work Amendment (Recovering Unpaid Superannuation) Bill 2017 to the House of Representatives. The Bill would allow the Fair Work Ombudsman to use its authority to help recover unpaid Superannuation Guarantee, among other changes.

NXT also wants the $450 minimum monthly salary and wages threshold for Super Guarantee contributions to be abolished, and the salary sacrifice ‘loophole’ to be closed. Employers would be required to notify employers, likely on payslips, which superannuation contributions are paid and which are not. The Bill would remove restrictions on choice of super fund, from 1 July 2018. Read more...

Rise of gig economy threatens retirement income system

The rise of the ‘gig’ economy may threaten superannuation and retirement incomes.

Association of Superannuation Funds of Australia (ASFA) CEO Dr Martin Fahy said the gig economy has the potential to have profound effects on the nature of work, and will also challenge the effectiveness of the superannuation system.

ASFA estimates that the are currently 100,000 workers in Australia using web-based platforms to obtain work on a regular basis, or around 0.8% of the Australian workforce, with this number expected to grow. Read more...

Super Guarantee $450 threshold creates ‘underclass’ of workers

The minimum earnings threshold to receive Superannuation Guarantee payments creates an ‘underclass’ of workers, says the Association of Superannuation Funds of Australia (ASFA).

ASFA says the “biggest losers” are those men and women working in the sales, community and personal service roles who earn less than $450 per month – the threshold for most workers to receive Super Guarantee payments.

The organisation said there is also substantial numbers of workers affected among Australia’s male labourers and females working in clerical and administrative roles. Read more...

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. Read more...

ATO needs more funding to audit businesses not paying Super Guarantee: ASFA

The ATO should receive more funding in order to better audit businesses for unpaid Superannuation Guarantee, says the Association of Superannuation Funds of Australia (ASFA).

ASFA CEO Dr Martin Fahy said that recent reports showed there was “substantial” non-payment of, what should be, compulsory superannuation entitlements.

“Non-payment of super is increasing in Australia with at least 690,000 or 6.5 per cent of the workforce affected annually,” he said.

Audits by the ATO’s superannuation and small business departments have a greater than 70% success rate in identifying unpaid super obligations, according to the Australian National Audit Office. Read more...