The Government has passed the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 bringing with it the scrapping of the $450 superannuation threshold from 1 July, 2022.
The bill brought a lowering of the age threshold for super downsizer scheme from 65 to 60 which would help members near retirement convert equity from their home to superannuation income.
The legislation also supported the repeal of the ‘work test’ for non-concessional and salary sacrificed contributions made by individuals aged between 67 and 75 to support retirement balances.
It would also allow retirement outcomes for those individuals who earnt less than $450 a month.
Taking to Twitter, Senator Jane Hume said: “The $450 threshold for super was a discriminatory relic in our system.
“We promised to remove it, and we’ve delivered.”
Australian Council of Trade Unions (ACTU) secretary, Sally McManus, said the abolition of the $450 threshold was a huge and long-fought win for unions.
“This will make a huge difference for casual, young, lower-income and part-time workers who will now receive super on every dollar,” said McManus.
The Association of Superannuation Funds of Australia (ASFA) welcomed the amendment noting it would benefit around 300,000 people, of whom approximately 63% were female and that the removal of the $450 threshold improved the coverage of super and enhanced equity across the super system.
ASFA chief executive, Dr Martin Fahy, said: “The removal of the $450 a month SG threshold is an important step towards improving the retirement savings for low-income earners, particularly women and younger Australians who work part-time, whose superannuation is adversely affected by this threshold.”
The Australian Institute of Superannuation Trustees (AIST) CEO, Eva Scheerlinck said it was an important equity measure that would make an immediate difference to disadvantaged workers, including women, who make up two out of three of those impacted.
“However, a lot more needs to be done to address the difference in super balances between men and women and, as the peak body for profit-to-member super funds, AIST will continue to advocate for broader initiatives to close the gender gap,” Scheerlinck said.
Scheerlinck said other initiatives needed included introducing superannuation on paid parental leave, addressing the gender pay gap, and ensuring there was no change to the legislated timetable to increase the super guarantee to 12%, from 10% now.
Meanwhile, super funds QSuper and HESTA welcomed the passing of legislation to scrap the threshold.
HESTA CEO, Debby Blakey said: “More than 80% of our members are women. Women are more likely to work in multiple part-time or casual roles with different employers. The result is that they can totally miss out on the benefits of super, which leaves them more vulnerable to poverty as they age.”
“The fact that super continues not to be paid on parental leave remains an obvious gap in our super system that needs to be addressed.”
“Our members spend their working lives caring for others and the long overdue removal of this threshold will ensure that they’ve now got a better opportunity to enjoy a more financially secure retirement.
QSuper chair, Don Luke, said: “Superannuation is a long-term investment. In some cases, we are investing to fund benefits our younger members will be seeing into the next century. The establishment of some common ground in this legislation is a signal to them of a consistent long-term approach to how superannuation is regulated.
“I hope we can see more such common ground because superannuation members benefit from long-term policy settings that give them more choices in how they invest in superannuation as part of their retirement planning.”
Earlier this week, Women in Super and Rest Super called on the Government to get the bill over the line by the end of this week to meet a 1 July introduction timeframe.
