Super slug tipped for lowest earners

LEGISLATION before federal parliament to repeal the low-income super contribution would be a disaster for low-paid workers, Tamworth mum Simone Hurst said.

The preschool teacher is quite perturbed at the prospect.

“I find it really disturbing because they’re taking it off the people that need it the most – and they do this every time,” Mrs Hurst said.

NOT HAPPY, TONY: St Peters Preschool employee Simone Hurst is aghast that the federal government is thinking of canning the superannuation rebate for low-income earners. Photo: Barry Smith 050514BSB04

NOT HAPPY, TONY: St Peters Preschool employee Simone Hurst is aghast that the federal government is thinking of canning the superannuation rebate for low-income earners. Photo: Barry Smith 050514BSB04

“Since I’ve finished uni, I think I’ve had one full-time job between children. I only had one other job that pulled in more than $30,000.”

Mrs Hurst currently works four days per week and earns about $22,000 per year – “and that’s only because I fill in as a casual, otherwise it would only be about $18,000”.

If the rebate goes, she says she would certainly be worse off.

“I can guarantee I’ll be affected. Because I’ve only had part-time jobs ... my super is nowhere near what my husband’s is,” she said.

“I’m not asking for handouts but there’s not going to be rebates. It all helps, but when I retire, there’s not going to be much left, so I just find it’s really disappointing they’re doing things like this.

“I’m working: I’m having a go. What are they taking it off us for – especially for women, for working mums?”

The low-income super contribution was introduced in 2012 to make the tax treatment of super more equitable for low-income workers. 

A total of 3.6 million Australians, 30 per cent of the workforce, may benefit from the measure.

Australian workers who earn up to $37,000 per year get a tax rebate from the federal government’s low-income superannuation contribution (LISC). 

Under the scheme, eligible workers receive up to $500, paid annually back into their super account, on the tax paid on their superannuation contributions.

Women in Super national chairman Cate Wood said if the government abandoned the LISC, 3.6 million workers would be affected, including almost 70 per cent part-time workers, 80 per cent female part-time and 40 per cent of regional Aussies.

“Without the LISC, the lowest-paid 3.6 million working Australians would receive no tax break on their compulsory super contributions, while the highest-paid workers would continue to receive a tax break of 30 per cent,” Ms Wood said. 

“We think it’s unfair to penalise any working Australian for saving for their retirement – especially those who have the least capacity to save.

“The current government plans to repeal the LISC as it is part of the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013. 

“This has been defeated in the Senate; however, they will represent the Bill when the Senate changes after July 1. 

“Abolishing the LISC will, I am sure, be part of their budget calculations and forward estimates.”

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