Good news for workers earning under $450 a month and their super

Good news for workers earning under $450 a month and their super

From 1 July 2022, eligible people will be able to earn super regardless of how much they are paid. Until recently, there was a requirement to earn $450 a month before earning super. The removal of the $450 threshold is good news if you’re working several jobs or work part-time. The change will help thousands more people build a nest egg for their retirement.

Helping low-income, casual and part-time workers

This change will help low-income, casual or part-time workers. Until now, the $450 minimum earnings threshold meant up to 300,000 Australians1 missed out on super – the vast majority of whom are women. This puts these people at a disadvantage when it comes to saving for retirement.

AustralianSuper advocated for this change for many years and we welcome the new law. If you’re a casual or part-time worker, you’ll now get paid the super you deserve. This will help you build your retirement savings.

A step towards greater financial security for everyone

The removal of the $450 threshold ends a long debate at a government level and is much-needed change. In 2019 the federal government ordered an independent panel look at Australia’s retirement income system. The Retirement Income Review found that removing the threshold would lead to better retirement outcomes for women, low-income earners, and particularly part-time and casual workers.

Around 300,000 Australians, including about 200,000 women and 100,000 men, were missing out on super each year because of this rule. The review found that women were losing about $4.7 million in super contributions every month as a result.

An extra $120 million to those who deserve it

The Industry Super Association estimates an extra $120 million a year will flow into Australia’s super system because of the change.

As Australia’s largest super fund, we’ll continue to advocate for a superannuation system that’s fair for all Australians, so you have the best chance to achieve the retirement you want.

To read more on the removal of the $450 threshold and example case study, read the full article here.

References
1. Pre-Budget Submission for 2018-19, Association of Superannuation Funds of Australia, February 2018.
2. Retirement Income Review, July 2020
3. Industry Super Association, Response to Federal Budget May 2021
Sponsored by AustralianSuper Pty Ltd, ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.