It's estimated around 300,000 Australians, including 200,000 women and 100,000 men, previously missed out on superannuation employer contributions entirely due to this threshold.

Changes to superannuation from passing legislation include:

  • The removal of $450 monthly income threshold for super contributions: benefitting young and low-income Australians.
  • Lowering the age threshold for super downsizer scheme from 65 to 60: helping superannuation members near retirement convert equity from their home to superannuation income.
  • The removal of super contribution “work test” for those aged from 67 to 74 inclusive: assisting older superannuation members to continue to build their retirement balances.

Director at Super Consumers Australia Xavier O’Halloran said the superannuation income threshold was a 'relic' of a previous era before digital payrolls.

"Scrapping this dinosaur rule is a step towards making super fairer and more equitable," Mr O’Halloran said.

Superhero CEO and Co-Founder John Winters said these new changes to superannuation, particularly the removal of the $450 monthly income threshold will allow more Australians, specifically younger Australians and those who work casual or part time hours, to start building their retirement nest eggs sooner as they will now receive super on every dollar they earn.

“While this is a great step, Australians need to be aware of the often high fees that many super funds charge," Mr Winters told

"This is incredibly important as people start building their super and wonder why their super balance is not growing as quickly as they’d expect despite regular payments – because a part of these earnings are taken in fees and admin charges. 

“From a superannuation fund perspective, transparency is key and funds need to be clear about the fees they charge members.

"In addition, Australians – especially those new to superannuation – need to take the time to thoroughly research their options to find a super fund that best suits their needs and will help them grow their super sustainably in the long run.”

Modelling from superannuation trustee QSuper outlined benefits to the removal of the income threshold and lowering the age threshold for the super downsizer scheme.

"The passing of this legislation means that low-income earners will now receive super contributions on all their income which will help lead to a better retirement," QSuper documents read.

"The removal of the $450 income threshold alone could mean tens of thousands more in retirement savings for both women and men who reduce their working hours to care for family members."

Women have higher rates of casual and part-time work, sometimes working for more than one employer, which has added to the imbalance due to the income threshold.  

As an example, QSuper noted with the threshold removed a 40-year-old who earns $449 per calendar month could boost their super by almost $30,000 by age 67.

In terms of downsizing, QSuper said the downsizer contribution has become a key part of the retirement income mix, allowing people to achieve two goals – to move to accommodation more suited as their family size drops and to turn the capital tied up in their home to retirement income.

"A 60-year-old adding $300,000 to their super balance would be able to draw an additional tax-free income of almost $20,000 per year from age 60 until age 88," QSuper documents read.

These changes come at a time when Australians are willing to offload more cash into their superannuation for retirement with recent AMP data highlighting a 28% spike in super contributions compared to pre-pandemic levels.

Image by Blue Bird via Pexels

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