A new bill introduced in the Federal Parliament will see mandatory pension payments extended to more workers from July 2022.
Currently, the Australian pension system requires an employer to make regular contributions, 10% of an employee’s salary, into the employee’s chosen retirement account.
Currently, an employee is currently entitled to super guarantee contributions from an employer if they are 18 years of age or older and are paid $450 or more (before tax) per month by a single employer.
However, following the legislative changes introduced by the Treasury Laws Amendment (Improving Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021and supported by both sides of the political arena, starting July 1, 2022, the $450 monthly earnings threshold will be removed and the pension guarantee will also increase to 10.5% from that date.
This means that starting July 1 this year, employers will be required to pay 10.5% pension contributions for their workers earning less than $450 in pre-tax income per month. However, if an employee is under 18, unless covered by a workplace agreement that states otherwise, the employee will be required to work more than 30 hours per week before becoming eligible for benefits. retirement.
It is interesting to note that the employees affected by this measure, who earn less than $450 per month from a single employer, tend to be working, young, low-income and part-time workers. Industry Super Australia says this change will see almost 300,000 super-paid Australians for the first time, of which around 63% are women and notes that this is a significant step towards providing adequate retirement savings low-income people, especially women and young Australians.
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