More women and lower-paid workers to qualify for compulsory super
11 May 2021
5
min read
If you earn less than $450 a month from a single employer you may soon be eligible for compulsory superannuation payments under new rules introduced by the Australian Government.
In the 2021-22 Federal Budget handed down on 11 May 2021, the Government announced that from 1 July 2022, it would remove the $450 per month earning threshold for eligible employees to receive Super Guarantee payments.
The Government said removing the threshold aimed to boost the retirement savings of part-time workers and women, many of whom may be working in insecure, part-time jobs.1
It said the reform improved the coverage of the superannuation system and would help to increase retirement savings for people with lower incomes, including women.
Before the change, employers have paid the super guarantee on top of a wage or salary to an eligible employee earning $450 or more (before-tax) in a calendar month. The removal of the threshold means employers pay super to eligible employees regardless of how much they earn in a calendar month.
This means that if you are an eligible employee, your employer must pay you the super guarantee (SG) on top of your wage or salary. The SG rate is based on your ordinary time earnings salary, which is generally what you earn for your ordinary hours of work, including commissions, shift loadings and allowances, but not overtime payments.
The rate of compulsory super that employers pay workers, the Super Guarantee will rise to 10.5% from 1 July 2022.
What difference could this make to your retirement?
We have a range of calculators to help you plan for your retirement. Try our Super Projection Calculator to check how much super you're on track to end up with, what sort of income you can expect in retirement, and how long your super might last.
1. Australian Government, Budget 2021-22, Women’s Budget Statement, at budget.gov.au