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Super needs to be considered part of pay: AIST
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| Fiona Reynolds
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There is an urgent need for superannuation to be considered an automatic component of wages for all workers, pay scales and pay types, according to the Australian Institute of Superannuation Trustees (AIST).
In a budget submission to the Federal Government, the AIST highlighted the need for the removal of the $450 monthly minimum earnings threshold for superannuation guarantee (SG) contributions to ensure low-income earners did not miss out. Women in particular had their retirement adequacy impacted by the threshold, the AIST stated.
Paid parental leave also does not currently attract a superannuation component but it is still considered pay and should include super, according to AIST chief executive Fiona Reynolds.
“We need to get to a situation whereby any money that is earned on an ongoing basis as salary must have super attached,” she said. “That to me includes the self employed — they’re still getting a wage and they should pay super.”
The AIST also recommended the Government legislate to enable all workers to make pre-tax-salary sacrifice super contributions, introduce mandatory SG contributions for the self employed on a phased basis and introduce a $2,000 super payment to older workers returning to work and women who have had a family break.
The existing co-contribution scheme should be retained and amended to make it more equitable, caps for concessional contribution should be increased and financial advice costs should be tax deductible up to a capped level, according to the submission.
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