Around 275,000 workers could receive, on average, $1,450 in super contributions per annum by extending the super guarantee (SG) to the gig economy, according to research.
A new report by Industry Super Australia (ISA) highlighted how the average gig worker could have up to $29,000 more in their retirement nest egg if super was paid to the on-demand workforce.
The data showed that the “typical” gig worker worked in the transport and food delivery sector, was in their mid-20s, and worked part-time, although there was a wide range of work performed by gig workers, including administration, education, and care.
The typical transport and food delivery driver gig worker working an average of 14.5 hours a week, earning $24 per hour, missed out on $1,900 super contributions a year, ISA noted.
Spending three years in the industry would mean these super contributions would reach $17,200 at retirement and $28,700 if an individual was in gig work for five years.
Similarly, a typical carer working 8.6 hours per week in their early 20s could be missing out on $1,100 in super contributions per annum, $10,800 across three years, and $17,500 less at retirement if working in the gig economy for five years.
“Being a gig worker should not mean you miss out on the opportunity to save for a decent nest egg at retirement,” said Bernie Dean, ISA chief executive.
Students and the unemployed had higher participation rates in the gig economy, ISA pointed out.
Moreover, those living with a disability and those who spoke a language other than English at home were more likely to participate.
Temporary residents in Australia were three times more likely to be gig workers and twice as likely to have been former gig workers.
Extending superannuation to these workers could not only improve their quality of life at retirement but also reduce the burden on the age pension, according to ISA.
As these workers did not receive super, they were likely to face worse retirement outcomes, miss out on the compounding returns of investment over time, retire with lower super balances, and receive lower incomes over the course of their retirement.
Dean added: “Paying gig workers super isn’t just the right thing to do; it makes economic sense because they’ll be more self-sufficient in retirement and less reliant on the age pension, which we all pay for through taxes.”
The federal government had flagged it would legislate to extend the Fair Work Commission’s powers to set a minimum set of employment standards for many gig workers, which would include the payment of super, which ISA considered “a concrete step in the right direction”.
“These workers are critical to caring for our elderly, delivering food and driving us home; they have every right to share in the benefits of what is meant to be a universal saving system,” said Dean.
