The removal of a $450 per month income threshold that prevents low-income workers from receiving superannuation contributions from their employer is a much-needed step towards a more equitable retirement income system, Council on the Ageing (COTA) Australia says.
“This legislation abolishes a significant inequity in our superannuation system, which directly penalises low-income earners and disadvantaged Australians, as found by the Retirement Income Review,” says Ian Yates AM, Chief Executive of COTA Australia.
“Australians earning less than $450 a month from a single employer are often in insecure work and holding multiple jobs that add up t more than $450 but they receive no super on any of it.
“Women have been disproportionately disadvantaged by this system. Female-dominated industries are low paid, and women are more likely to work part-time and casual, putting many beneath this $450 threshold.
“Now every worker will earn super on every dollar they are paid, no matter what they are paid.
“After calling for this reform for many years, it’s pleasing to see it passed today and know that Australians on low incomes will have a fairer go at a dignified and happy retirement.”
“We also welcome the amendments in this Bill that reduce the age of eligibility for downsizer contributions from 65 to 60, which will provide greater flexibility for older Australians making choices about their lifestyle as they approach eligibility to access their superannuation.
“Another positive change in this legislation is the removal of the work test for people 67-74, which has required people to be in paid work for 40 hours over a consecutive 30-day period during a financial year in order to make superannuation contributions.
“Removing this restriction will enable people in the early years of retirement flexibility to better manage their finances and assets and contribute to optimising their superannuation to make additional super contributions in a flexible way according to their varied personal circumstances.
“I thank the members of Federal Parliament for working collectively to pass these important changes to our superannuation system in a timely way so they can come into effect from 1 July 2022 and make superannuation more accessible and equitable for more Australians.”
