Quarter of a million Rest members get more super due to $450 monthly income change

Rest, one of Australia’s largest profit-to-member superannuation funds, estimates around a quarter of a million Rest members are now receiving their full super entitlements due to the removal of the $450 monthly income threshold.

On 1 July 2022, the removal of the $450 monthly income threshold for Superannuation Guarantee contributions came into effect. Previously, employers were not required to pay Superannuation Guarantee contributions to workers who earnt less than $450 per month.

Rest’s analysis of member contributions during the 2022/23 financial year reveals up to 260,000 members are estimated to have received super for every hour they worked as a result of this change.

The analysis also found women made up 64 per cent of the 260,000 members.

“The removal of the $450 income threshold has offered more than a quarter of a million examples of the power and value of reform efforts to build a fairer and more equitable super system,” said Rest CEO Vicki Doyle.

“This finding highlights the benefit to Rest members, but it’s likely many more working Australians are now receiving super for every hour they work as a result of the change.

“Women were overrepresented among the 260,000 members and therefore more likely to benefit from this change. This was particularly the case for those aged between 40 and 59.

“As a result, the change will contribute to closing the gender gap in superannuation balances, which is around 26 per cent for Rest members aged 60 to 64.¹

“Coupled with the introduction of payday super and plans to increase the visibility of unpaid superannuation, there has been some encouraging progress towards greater fairness and equity recently.

“We need to build on this momentum and implement further reforms, such as superannuation contributions on paid parental leave.”

Rest’s analysis also found:

• Around 168,000, or 64 per cent, members were women, and 94,000 were men. Women make up 59 per cent of our total membership, by comparison.
  
  
• Around 180,000 of the 260,000 were existing members who earnt additional contributions that they were previously unlikely to receive. Around 80,000 were new members, some of whom were unlikely to have received any contributions otherwise.
  
  
• More than 11,000 inactive accounts were also reactivated, and therefore these members continued to accrue investment returns on their retirement savings.

1. As at 30 June 2023, the average balance for Rest’s female members aged 60 to 64 was $86,300, compared to $116,200 for male members. This is a gender gap of 25.8 per cent.