WORKERS AGED OVER 70 WILL NOW BE PAID SUPERANNUATION UNDER A SURPRISE CHANGE ANNOUNCED BY THE GILLARD GOVERNMENT

Assistant Treasurer Bill Shorten says the legislation will mean any working Australian, no matter how old they are, will be entitled to be paid superannuation and the age limit for employer contributions would be abolished from July 1, 2013.

The Government has announced that it will increase the SGC (Superannuation Guarantee Charge) to a maximum of 12% by the 2019/20 financial year.  The charge will increase in increments as outlined in the table below;

SGC CUT-OUT AGE EXTENDED TO 75

The entitlement age for the SGC will be lifted for workers, with the cut-out age limit increasing from 70 to 75 years of age. This change will commence in 2013/14 and will align the SGC cut-out age with voluntary and self-employed contributions.

ADDITIONAL GOVERNMENT CONTRIBUTION FOR LOW INCOME WORKERS

A new government contribution will apply to low income workers from 1 July 2012.  The new measure is a contribution that applies only to workers earning $37,000 or less.  The contribution is calculated by applying a matching rate of 15% on concessional contributions made with the maximum contribution payable of $500.  The contribution will then be paid into the worker’s superannuation account. As a result of the $500 limit, every dollar of contributions above $3,333 made by low income earners will not be matched by the government.

Note: The changes covered in this article subject to the passing of the Superannuation Guarantee Amendment Bill 2011