Government told to remove income threshold for super
The Indigenous Superannuation Working Group is calling for the removal of the $450 monthly income threshold as it reduces the superannuation guarantee entitlements received by many Aboriginal and Torres Strait Islanders.
Under the current $450 monthly income threshold policy, The Indigenous Superannuation Working Group (ISWG) said employers are not required to pay superannuation guarantee (SG) to employers over the age of 18 that earn less than $450 per month.
ISWG said Australian Bureau of Statistics data shows an estimated 220,000 Australian females and 145,000 males are missing out on around $125 million of superannuation contributions each year as a result of the monthly income threshold.
ISWG chair Jo Naquesage said that the threshold affects low income earners and many Aboriginal and Torres Strait Islander peoples who tend to be in that group.
“The weekly household income for Aboriginal and Torres Strait Islander adults is almost half that of other Australian adults so they are more likely to be affected by the income threshold,” said Ms Naquesage.
“As a result, many Indigenous people aren’t being paid superannuation from their employer meaning less compound interest is being earned, and ultimately, they are getting less money in retirement.”
Ms Naquesage also highlighted some of the other challenges faced by Aboriginal and Torres Strait Islander people in accessing superannuation “including verification of identity, communication and literacy issues, different cultural practices and relationships, and life expectancy differences”.
“There are still a number challenges for Aboriginal and Torres Strait Islander peoples in regards to superannuation and retirement outcomes, however removing barriers like the $450 threshold is an important step,” she said.
First Nations Foundation chief executive Amanda Young said many Aboriginal and Torres Strait Islander people hold down several jobs, each earning under the threshold so no superannuation is required to be paid.
“For example someone working nearly full-time across several child care centres, but only for a few hours each, will most likely miss the threshold at any one centre and therefore not get paid any super,” said Ms Young.
“There’s a big inequality gap which needs to be addressed. Fair’s fair – as a society we need to help everyone achieve a dignified retirement.”