More Australians will benefit from abolishment of super threshold

Australia has the fifth largest superannuation system in the world, worth about $3.4 trillion, more than the value of all the companies listed on the Australian Securities Exchange. It helps individuals save for their retirement and ensures that they have a reliable source of income in their old age. Until recently, however, workers on lower incomes were often excluded from the full benefits that superannuation enjoys. 

The previous $450 monthly threshold for super contributions meant that employers were not required to contribute to their employees' superannuation if they earned less than $450 per month. This threshold meant that many part-time and casual workers missed out on vital superannuation contributions, even if they worked several jobs.

However, in the 2021 Federal Budget, the Australian Government announced that it would remove the $450 monthly threshold for super guarantee eligibility which came into effect on 1 July 2022. The decision is excellent news for Australian workers on lower incomes, as it means more workers will be eligible for super contributions from their employers, helping them to save for their retirement and build a more secure financial future.

There are several benefits to superannuation for workers on lower incomes. Firstly, it provides a way for individuals to save for their retirement, which is essential in a country with an ageing population and rising life expectancy. Without adequate savings, many Australians may find themselves struggling to make ends meet in their old age.

Superannuation contributions can also help to close the gender gap in retirement income. Women, in particular, are more likely to work part-time or casual jobs and are therefore more likely to miss out on superannuation contributions. By abolishing the $450 monthly threshold, more women are now eligible for superannuation contributions, helping to bridge the gap between men and women's retirement incomes.

The decision to abolish the $450 monthly threshold for superannuation contributions is a positive step towards ensuring that all Australians can benefit from the superannuation system. Workers on lower incomes will now be able to save for their retirement and enjoy the security of a reliable source of income in their old age. This change is a win for workers, a win for gender equality, and a win for Australia's retirement income system as a whole.