Gig economy to uncover more super concerns
The rise of a gig economy where buyers and sellers are matched on web-based platforms will negatively challenge the effectiveness of the current superannuation system for contract employees, according to the Association of Superannuation Funds of Australia (ASFA).
ASFA has today released a discussion paper in which chief executive Martin Fahy pointed to concerns for independent contractors and self-employed workers not covered by the Superannuation Guarantee (SG).
“Workers who already operate under some form of independent work arrangement – such as independent contractors – will migrate onto web-based platforms and new gig economy jobs will be created,” Fahy said.
“However, the current superannuation settings are not suited to these trends.”
ASFA found self-employed workers had lower superannuation balances than employees across every age distribution. In the run-up to retirement between ages 60 and 64, self-employed workers were expected to have just have the amount of super held by salary workers.
“For affected workers and in the absence of any policy reforms, a growing gig economy would mean lower superannuation balances at retirement,” Fahy said.
“This would reduce the broader adequacy of the superannuation and retirement income system.”
The ASFA discussion paper outlined proposals for the adjustment of current settings which included:
- Extension of the coverage of the SG to independent contractors and the broader group of self-employed workers.
- Removal of the $450-a-month wages threshold for the SG to be paid to employees.
AUTHOR
Hope William-Smith
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
