Part time, low income earners set for a super boost
Changes to superannuation will help maximise the super savings of millions of low income and part time Australian workers, according to the Australian Taxation Office (ATO).
The following reforms will boost the savings of working Australians from 1 July this year:
- The super guarantee rate will gradually increase from nine per cent to 12 per cent over the next seven years, boosting the super savings of Australian workers by around $500 billion by 2035.
- The upper age limit for compulsory super will be removed, so no matter how old you are, if you are working you can still grow your super.
Around 3.6 million Australians earning up to $37,000 will be given a boost as part of the Australian Government’s super reforms.
The reforms are designed to help protect and grow the savings of all Australians, particularly those on low incomes and part-time workers.
Recent research by the ATO shows that people on a low income are particularly disengaged with super - tending to concentrate on day-to-day living expenses and other more immediate financial priorities. Changes to super will help to maximise the retirement savings of those who don’t take an active interest in their super.
Low income earners can already benefit from the following:
1) Low income super contribution
The super savings of around 3.6 million Australians are set to receive a boost, with people earning $37,000 or less per year eligible for up to $500 annually,
ATO deputy commissioner for superannuation, Alison Lendon said, “Best of all, if eligible, people won’t have to do anything to receive the boost, the ATO will work out their eligibility for them and pay it to their fund - but people can help by ensuring their super fund has their tax file number.”
2) Keeping track with SuperSeeker
The ATO’s free online tool, SuperSeeker gives people more information about their super in one place. By logging into the secure system, people can view any super accounts to which contributions have been made in the last two financial years, as well as find any lost super reported to the ATO and super that the ATO holds on their behalf.
People can also use SuperSeeker to request a transfer of funds between accounts with an online form, making super easier to manage.
“There’s plenty of lost super out there for people to reunite with - around 3.4 million lost super accounts in Australia with an average value of $4,800 per super account,” Ms Lendon said.
“To get the most out of SuperSeeker, people will need to create a secure login. Make sure you have personal documents, such as your last notice of assessment from the ATO with you so you can verify your identity and log into the system. And SuperSeeker’s data is updated regularly, so if you don’t find anything to begin with, make sure you try again.”
3) Tax file number (TFN) – key to super
One of the best ways Australian workers can avoid having lost super is to make sure their super fund has their TFN. Changes have been made to the use of TFNs by super funds, making it easier to keep track of and transfer super and to find any lost super or super the ATO holds on a person’s behalf.
To take full advantage of these changes people should make sure their super fund has their TFN by checking their member statement. If it’s not listed, they should contact their fund and provide it to them.
Another way to avoid lost super is to make sure you provide your TFN to your employer when you start a new job. Remember to consider using your own super fund when you start a new job as well. You don’t have to automatically go with your employer’s default fund.
Source: Australian Taxation Office, 26 June 2013
