All workers must get super, government told
Casual workers with multiple employers will be the big losers if the government follows through with a plan to raise the amount you need to earn each month before you are paid superannuation.
That is the view of the Australian Institute of Superannuation Trustees (AIST), which has called on the government to get rid of the earning threshold altogether.
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Currently employees must earn more than $450 a month from a single employer before they are eligible for compulsory superannuation contributions. But the Board of Taxation has recommended this be raised to $1,350 a quarter. While this still amounts to $450 a month, you would have to work for three months before you qualified for superannuation contributions.
AIST chief executive Tom Garcia said this is unfair on people who work casually or for multiple employers, which he said is common in industries such as retail, hospitality and nursing. In theory you could earn several thousand dollars in total, but if it comes from several different employees, you might not receive a cent of superannuation.
“If you work, you should get super,” Mr Garcia said. “Moves to deny more workers of super will simply widen Australia’s retirement savings gap.”
The small business lobby, however, opposes abolishing the threshold, saying it would create more red tape.
“Getting rid of the threshold makes no sense in the real world of small business,” said Peter Strong, chief executive of the Council of Small Business Australia.
“If there was no threshold, you’d be doing a lot of paperwork for someone you employed once for $100 dollars. If you’ve got a café near a uni, for example, you have a high turnover of employees, and it’s hard to chase them up for information. And then when the employee leaves, the super fund keeps sending you information and asking you where the employee is.”
He said the only reason small businesses would support abolishing the threshold would be if the Tax Office took over responsibility for superannuation payments through PAYG. Otherwise it would create too much red tape.
But Mr Garcia countered this position. “Let’s not get lost in the red tape argument. The super industry has spent millions of dollars moving towards electronic super payments making payroll thresholds for super redundant”.