February 1 2022

Proposed removal of the $450 super threshold

In the 2021 Federal Budget, the Australian Government announced its intention to remove the $450 monthly income threshold for Superannuation Guarantee (SG) contributions.
Woman behind a counter in a clothing shop hands a shopping bag to a customer Woman behind a counter in a clothing shop hands a shopping bag to a customer

Rest has long advocated for this change because the $450 monthly income threshold affects hundreds of thousands of Australians working in lower-income, part-time and casual work, especially women. Currently, workers could earn more than $450 each month in aggregate from multiple jobs, but not receive any superannuation contributions because each job pays less than $450 per month.

In addition to our own advocacy, Rest contributed to the Pre-Budget Submissions developed by the Australian Superannuation Funds Association (ASFA) and the Australian Institute of Superannuation Trustees (AIST), which both recommended removing this measure. The ASFA has estimated that up to 350,000 people – 220,000 of whom are women – would benefit from the removal of the $450 super threshold.1

Implications for employers

Currently, employers generally only need to make SG contributions to employees who are:

  • 18 years and older and are paid $450 or more (before tax) per calendar month; or
  • under 18 years old, are paid $450 or more (before tax) per calendar month and work more than 30 hours in a week.

Should the threshold be removed, employers will be required to pay SG contributions to all eligible employees, regardless of their income.

Timings for the proposed change

While this measure has not yet been legislated, the Government has proposed removing the $450 super threshold from 1 July 2022.

We hope the legislation will be debated and passed in the parliamentary sitting days scheduled for early 2022, and we will keep you updated on progress.

1 Pre-Budget Submission for 2018-19, Association of Superannuation Funds of Australia, February 2018.

This information is current as at 31 January 2022