Warning on low income super threshold
Australia's low income workers would be unfairly penalised if the Federal Government adopted a recommendation from the Board of Taxation and lifted the superannuation payment threshold for low income workers to $1350 a quarter, according to the Australian Institute of Superannuation Trustees (AIST).
Commenting on the Board of Taxation's latest recommendations aimed at reducing cost impacts on small business, AIST chief executive, Tom Garcia, claimed that raising the exemption threshold would unfairly penalise low income workers and those in precarious employment.
He said that the AIST had always supported the complete removal of the $450 monthly superannuation payment threshold because it believed all workers should be entitled to superannuation payments.
"If you work, you should get super," Garcia said. "Moves to deny more workers of super will simply widen Australia's retirement savings gap".
He said that while moving to a quarterly threshold would ease the red tape burden on small business, such an initiative would have failed to take account of the current e-commerce reforms in the super industry that would soon see super payable at the push of a button.
"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," Garcia said.
He said research had shown that removing the $450 monthly threshold would be of minimal cost to the Government and would result in significant improvements for those individual workers who were most disadvantaged.
AUTHOR
Mike Taylor
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