Employees will no longer need to meet the monthly minimum income threshold of $450 to receive superannuation guarantee payments from their employers from the 1st of July 2022.
At this point in time, employers are not required to pay super guarantee payments to their employees if they have not earned $450 per month. It does not matter if employees are working for multiple employers – if they have not earned $450 per month from a single employer, they are still not eligible for superannuation guarantee payments.
For those employees working in lower-income jobs or in part-time or casual employment who may not reach that minimum income threshold, this has meant that they have been missing out on critical payments to their superannuation. With a significant portion of these workers being women, it has also been a contributing factor to the widening ‘gender gap’ in superannuation.
Next month’s removal of the minimum income threshold means that these employees will now be able to accrue super through the payments made by their employer and help address a long-term equity issue that had been in place in superannuation for years.
These changes should come into effect by the 1st of July 2022 and, though they may not necessarily improve the retirement outcomes of individuals, the savings resulting from these payments into super will be boosted and all workers will as a result be provided with superannuation coverage, regardless of whether or not they earn more than $450.
If you are an employer who did not have to pay super guarantee payments to your employees and will need to do so starting next month, you can find out your compliance requirements by speaking with your trusted adviser.