Retirement Income Covenant welcome reform but it is now up to Senate to abolish law that sees lower-income women denied super

Industry Super Australia

The Senate must today (Thursday) pass a Bill that will fix a loophole that denied super payment to hundreds of thousands of women on lower incomes.

Legislation to abolish the outdated $450 threshold, when super is not paid if a worker earns less than that figure a month, enjoys the support of both major parties and should be dealt with as a matter of urgency.

While the government and Parliament should be congratulated for passing the separate Bill on a retirement income covenant – which is a good measure to ensure the system caters for members in the retirement phase as well as the accumulation – the Senate’s job is not yet done.

Today is D-day to pass the legislation abolishing the $450 threshold, if it is not passed by the Senate tonight there may not be enough sitting days for the Bill to be enshrined in law before an election is called.

This important and overdue reform will mean 200,000 women who earn less than $450 a month with one employer will finally be paid super. This super boost could prove vital for their future financial security.

About 60% of those impacted by the $450 threshold are women and this measure is a necessary step towards bridging the gender super gap, which sees women retire with about a third less super than men.

The government should be congratulated for pushing through the Legislation in the House this morning and it is now up to the Senate to deliver the much needed and long overdue super boost to low-income earners.

Industry Super Australia welcomes the Retirement Income Covenant’s flexible principles-based approach and the inclusion of spending flexibility as an objective that funds must meet in its strategies.

Comments attributable to Industry Super Australia Advocacy Director Georgia Brumby:

“Abolishing the $450 threshold would remove structural inequity and is the first step a government must take towards addressing retirement inequality.”

“Senators standing in the way of this Bill passing are sending the message that they are content with hundreds of thousands of women on lower incomes being denied retirement savings.”

“The Retirement Income Covenant is a welcome measure that will help funds assist their members in the retirement phase.”

/Public Release.