Industry superannuation fund Rest has estimated that as many as 260,000 of its members received super for every hour they worked during the past financial year thanks to the removal of the income threshold for super guarantee contributions.
The threshold, which had been in place since compulsory super was introduced in 1992, meant that employees earning less than $450 per month were not required to be paid super.
However, following legislation introduced under the former Morrison government in 2021, which passed Parliament in February last year, the $450 monthly income threshold was scrapped with effect from 1 July 2022.
“The removal of the $450 income threshold has offered more than a quarter of a million examples of the power and value of reform efforts to build a fairer and more equitable super system,” commented Rest chief executive officer Vicki Doyle.
“This finding highlights the benefit to Rest members, but it’s likely many more working Australians are now receiving super for every hour they work as a result of the change.”
Rest said its analysis of member contributions from the 2022–23 financial year determined that women, who account for 59 per cent of the fund’s total membership, made up 64 per cent of the members which have benefited from the threshold removal.
“Women were over-represented among the 260,000 members and therefore more likely to benefit from this change. This was particularly the case for those aged between 40 and 59,” Ms Doyle noted.
“As a result, the change will contribute to closing the gender gap in superannuation balances, which is around 26 per cent for Rest members aged 60 to 64.”
Of the 260,000 members that have benefited, Rest said approximately 180,000 were existing members who earnt additional contributions they were previously unlikely to receive.
Meanwhile, approximately 80,000 of the 260,000 were new members, some of whom Rest said were unlikely to have received any contributions otherwise.
The super fund also noted that over 11,000 inactive accounts had been reactivated, allowing these members to continue to accrue investment returns on their retirement savings.
“Coupled with the introduction of payday super and plans to increase the visibility of unpaid superannuation, there has been some encouraging progress towards greater fairness and equity recently,” said Ms Doyle.
“We need to build on this momentum and implement further reforms, such as superannuation contributions on paid parental leave.”
“This simple change will strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers,” they said at the time.
Meanwhile, calls have continued for other reforms in the super space, including KPMG’s recommendation last month to add super guarantee contributions to the carer payment.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.