AIST budget submission calls for threshold removal

The removal of the $450 monthly minimum earnings threshold for superannuation guarantee (SG) contributions is a key element of the Australian Institute of Superannuation Trustees (AIST) budget submission.

The range of recommendations in the submission need to be viewed in the light of the institute’s support for a move to increase the SG to 12 per cent, according to the AIST.

AIST chief executive Fiona Reynolds said the most important aspects that needed changing were related to making super an automatic part of people’s salary. Currently, she said, paid parental leave does not incorporate super — and those earning less than $450 per month also do not earn super.

“We need to get to a situation whereby any money that is earned on an ongoing basis as salary must have super attached,” Reynolds said. “That to me includes the self employed — they’re still getting a wage and they should pay super.”

The AIST also recommended the Government legislate to enable all workers to make pre-tax-salary sacrifice super contributions, introduce mandatory SG contributions for the self employed on a phased basis, and introduce a $2,000 super payment to older workers returning to work and women who have had a family break.

The existing co-contribution scheme should be retained and amended to make it more equitable, caps for concessional contribution should be increased, and financial advice costs should be tax deductible up to a capped level, according to the submission.