Self-employed workers slipping behind on super

Self-employed Australians have lower levels of superannuation across all age groups than other employees, sparking calls from the Association of Superannuation Funds of Australia (ASFA) to extend the superannuation guarantee (SG) to self-employed and gig economy workers.

Research by the Association found that 19 per cent of self-employed people have no super, compared to eight per cent of employees overall. Women especially were at a disadvantage.

Prior to retirement, the self-employed only had about half the super savings of waged or salaried employees, placing them far below the level needed to retire comfortably.

Self-employed men aged 60-64 years had approximately $143,000 in super, compared with $283,000 for other employees. For women, salaried employees had $175,000 in super on average, $92,000 less than their self-employed counterparts.

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To retire comfortably, individuals on average would need a lump sum of $545,000 in superannuation and couples $640,000.

The majority of the self-employed did not make regular super contributions, despite tax concessions being available.

ASFA said that extending the SG to the self-employed, and guaranteeing it for gig economy employees, would help rectify this situation.

Ten per cent of the national workforce was self-employed, but ASFA chief executive Martin Fahy said that this would increase with the rise of the gig economy, as buyers and sellers of goods and services would increasingly be organised via web-based platforms.

“Most new gig workers will be self-employed contractors,” he said. “Without reform to provide SG for these workers, many will end up with insufficient retirement income.”

The Association planned to talk to some major Australian gig economy platform operators to try and work toward such a change.