The Parliament has sealed legislation that would give a super boost to 300,000 Australians on lower incomes, two thirds of which getting more super payments are women.
Long overdue legislation to abolish the outdated $450 threshold, when super is not paid if a worker earns less than that figure a month, was passed yesterday removing a system relic that denied part-time and casual workers retirement savings.
Industry funds had long fought to remove this antiquated law and the government, and the Parliament should be congratulated for passing the Enhancing Superannuation Outcomes for Australians Bill, which contained the measure to remove the $450 threshold.
The median super balances of those impacted by the $450 threshold is just $12,000 – securing them retirement contributions – many for the first time - will be vital for their future financial security.
About 60% - roughly 200,000 - of those impacted by the $450 threshold are women and this measure is a necessary step towards bridging the gender super gap, which sees women retire with about a third less super than men.
But it is just a first step towards addressing gender equity in retirement.
There are a suite of measures the major parties must commit to – starting with paying super on Commonwealth Parental Leave Pay and sticking with the super guarantee rise to 12% - to seriously address the gender super gap.
Industry Super Australia also welcomes the passing of the Retirement Income Covenant. The covenant will help super funds assist their members in the retirement phase as well as the accumulation.
Comments attributable to Industry Super Australia Advocacy Director Georgia Brumby:
"Abolishing the $450 threshold removes a structural inequity that discriminated against those on lower incomes and disproportionately impacted women – it is a welcome first step towards addressing retirement inequality."
"The government and Parliament should be congratulated for delivering this overdue reform, but further measures – like paying super on Commonwealth parental leave – now need to be taken to ensure the next generation of women do not face financial insecurity at retirement."
"The Retirement Income Covenant is a welcome measure that will help funds assist their members in the retirement phase."
