Over 26,700 workers in Chifley earning under $37,000 a year will effectively pay no tax on their superannuation, Federal Member for Chifley, Ed Husic said today.
“This will help hard working people, including mums working part time, contract cleaners, shop assistants, child care workers, hairdressers, aged care and disability workers, hospitality and bar staff, gardeners and many others on low-incomes,” Mr Husic said.
The Low Income Superannuation Contribution will assist around 3.6 million low income Australians, who currently pay up to $500 a year in tax on their superannuation, save more for their retirement.
In particular, the superannuation savings of over 2.1 million Australian women, who tend to earn less than men, will be boosted by over $500 million in 2013-14 alone.
“There’s no point working hard all your life only to retire poor,” Mr Husic said.
“The 26,700 low income workers in Chifley will have the tax they pay on their superannuation automatically refunded straight into their superannuation account, without having to fill out a tax return or any other paperwork.”
“Of course, the Coalition plan on scrapping this important reform, ripping away the extra retirement savings from these workers. It’s about time Tony Abbott and the Coalition stopped saying ‘no’ to everything and did what is best for Australian workers.”
A 30 year old permanent part time worker earning a quarter of the average weekly earnings, and who receives the contribution for 20 years of their working life, is projected to receive eight per cent more in real retirement benefits or around $13,000 extra in their superannuation account.
The Low Income Superannuation Contribution will assist around 26,700 low income workers in Chifley who currently receive minimal (or in some cases, no) tax benefit from contributing to superannuation, due to the 15 percent superannuation contribution tax being at or above their income tax rate.
From 1 July 2012, most low income earners will effectively pay no tax on their superannuation guarantee contributions and the tax refund will be directed into their superannuation accounts.
“Superannuation should be of benefit to every Australian worker, no matter how much you earn. The Gillard Government is making the superannuation system fairer by assisting workers on low incomes achieve financial security and build their wealth for their retirement,” Mr Husic said.