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Issue #1795      September 20, 2017

Super group concerned

The Indigenous Superannuation Working Group (ISWG) is calling for the removal of the $450 monthly income threshold that means many Indigenous people miss out on super.

Under the current income threshold policy, employers are not required to pay under the superannuation guarantee to employees over age 18 who earn less than $450 a month.

The ISWG says that based on Australian Bureau of Statistics data, consequently an estimated 220,000 women and 145,000 men are missing out on about $125 million of superannuation contributions each year.

ISWG chair Jo Naquesage said the threshold affects low income earners and many Indigenous peoples who tend to be in that group.

“The weekly household income for ATSI adults is almost half that of other Australian adults so they are more likely to be affected by the income threshold,” she said.

“As a result, many Indigenous people aren’t being paid superannuation from their employer, meaning less compound interest is being earned, and ultimately, they are getting less money in retirement.”

First Nations Foundation chief officer Amanda Young wants this issue addressed to “help everyone achieve a dignified retirement”.

“Many ATSI people hold down several jobs, each earning under the threshold, so no superannuation is required to be paid. For example, someone working nearly fulltime across several child care centres, but only for a few hours each, will most likely miss the threshold at any one centre and therefore not get paid any super,” she said.

The ISWG says Indigenous people face many challenges in accessing superannuation, including verification of identity, communication and literacy issues, different cultural practices and relationships, and life expectancy differences.

“There are still a number of challenges for ATSI peoples in regards to superannuation and retirement outcomes, however removing barriers like the $450 threshold is an important step,” Naquesage said.

The threshold issue also affects other vulnerable groups such as women, young people and low-income earners.

“Superannuation should be a universal entitlement without income exceptions,” Naquesage said. “We’re calling on the government to update the policy and give everyone, regardless of their income, a fair go at saving for retirement.”

The threshold was originally introduced to reduce the administrative burden of paying superannuation to casual and part-time employees, however the introduction of new technology to allow employers to send money and information electronically has largely addressed these issues.

“Now that we have SuperStream, the administrative barriers have fallen away so the threshold should be made redundant,” Naquesage said.

Koori Mail

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