Budget highlights that increasing compulsory superannuation is vital to improving retirement outcomes for women and low-income earners
The Australian Institute of Superannuation Trustees (AIST) welcomes the removal of the $450 monthly income threshold for super contributions announced in tonight’s Federal Budget. This and lifting the compulsory super rate to 12% as well as other reforms are needed to prevent women, low income earners, and other vulnerable Australians from facing financial hardship in retirements.
“Removing the $450 monthly income threshold is welcome and long overdue but increasing the super compulsory rate to 12% as legislated is the vital piece in preventing many women and other vulnerable Australians from experiencing poverty in retirement.”
Ms Scheerlinck said the removal of the $450 monthly income threshold was particularly important for the estimated 300,000 workers – predominantly women working in multiple low paid jobs.
“Abolishing this threshold will make a real difference to a cohort of low paid workers who have been missing out on compulsory super payments. In this modern era of payroll systems, there is no justification for an arbitrary income threshold that hurts the retirement outcomes of our most vulnerable workers,” Ms Scheerlinck said.
Ms Scheerlinck said the legislated timetable to increase the SG to 12%, with the first rise due to come into effect on 1 July, 2020, would ultimately make the biggest difference to the retirement outcomes of vulnerable Australians.
“Increasing the super rate to 12% is vital to the retirement security of women and low income earners who are more likely to experience broken work patterns, insecure employment and involuntary retirement.”