A new bill introduced into federal parliament will see compulsory superannuation payments extended to more workers from July 2022.
Currently the Australian superannuation system requires an employer to make regular contributions, 10% of an employee's wage, into an employee's chosen superannuation account.
At present, an employee is currently entitled to super guarantee contributions from an employer if they are 18 years old or over and are paid $450 or more (before tax) in a month from a single employer.
However as a result of legislative changes introduced by the Treasury Laws Amendment (Enhancing superannuation outcomes for Australians and helping Australian businesses invest) Bill 2021, and supported by both sides of the political arena, from 1 July 2022, the $450 monthly earnings threshold will be removed, and the Superannuation Guarantee will also rise to 10.5% from this date.
This means that from 1 July this year, employers will be required to make 10.5% superannuation contributions for their workers earning less than $450 in pre-tax income per month. However, if an employee is under the age of 18, unless they are covered by a workplace agreement that states otherwise, the employee will need to work more than 30 hours in a week before they become eligible for superannuation payments
It is interesting to note that the employees who are affected by this measure, who earn less than $450 a month from a single employer, tend to be female, young, lower-income, part-time workers. Industry Super Australia claims that this change will see almost 300,000 Australians being paid super for the first time, of whom about 63% per cent are women and notes that this is an important step towards providing adequate retirement savings for low-income earners, particularly for women and younger Australians.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.