More than 85,000 ACT workers will benefit from a boost to their nest egg from 1 July as the super rate increases to 10%, with young workers and low to middle-income earners the big winners.
In a media statement, Industry Super Australia (ISA) stated that from 1 July, an extra $230 a year will flow into the super accounts of the average ACT worker.
This super boost may be small, but it will make a big difference at retirement – with a 30-year-old on the median wage expected to have an extra $19,000 at retirement, and a couple to have an extra $38,000.
In total, ACT workers will get an extra $20 million paid in super in the next 12 months, ISA stated.
Almost one in three workers who get the super increase in the ACT are in their 20s (see tables below).
ISA said he extra contributions will help these young workers recoup the savings they lost after they were encouraged to raid their super to support themselves through the Coronavirus downturn.
ISA analysis of tax file data shows that almost half of the people receiving the super increase are on wages less than $55,000 a year.
These 42,000 workers are in line for a five-figure boost to their retirement savings – which will improve their quality of life at retirement dramatically.
The super rate is legislated to rise from 9.5% to 12% by 2025 by annual 0.5% increases.
At the Budget, this year the federal government re-committed to its election pledge to stick to the legislated schedule.
This commitment to 12% super is expected to deliver an extra $85,000 to the typical workers’ retirement savings.
The increase to 12% is also expected to:
- Add $170,000 to the retirement nest egg of the average 30-year-old couple;
- Save $33 billion in Age Pension costs over coming decades;
- Inoculate retirees from future adverse changes to the Age Pension;
- Add $12 billion to Australia’s GDP, create 10,000 jobs and increase real wages, according to research from independent consultants ACIL Allen.
The Superannuation Guarantee is a critical response to the ageing population and improves retirement incomes of working people in a fiscally sustainable manner.
Although still maturing, annual superannuation retirement benefit payments are already double age pension expenditures.
According to Industry Super Australia Chief Executive, Bernie Dean, “even though the increases are only small now, they’ll add up to make a huge positive difference for ACT workers when they retire”.
“These increases will give women more financial independence and that means a better shot at a dignified life in retirement, not one marked by poverty,” Mr Dean said.
“Young people will be the big winners from these increases and help those that raided their super last year, during the downturn, make up some of the lost ground.
“This is the first of a number of increases the government has promised and locked in law for the coming few years,” he said.
Super guarantee increase winners by state
| State | People | Avg payment per person | State Total ($M) |
| ACT | 85,550 | $230 | $20 |
| NSW | 2,199,700 | $246 | $541 |
| Victoria | 1,790,400 | $228 | $409 |
| Queensland | 1,259,150 | $222 | $279 |
| WA | 755,000 | $244 | $185 |
| SA | 467,950 | $208 | $97 |
| Tasmania | 141,300 | $194 | $27 |
| NT | 69,100 | $257 | $18 |
| Australia | 6,768,150 | $233 | $1,576 |
Super guarantee increase winners by income
| State | $5,401-$24,999 | $25,000-$34,999 | $35,000-$54,999 | $55,000-$69,999 | $70,000-$84,999 | $85,000-$99,999 | $100,000-$149,999 | $150,000-$199,999 | $200,000 and over | All |
| ACT | 13,850 | 8,550 | 19,850 | 13,150 | 8,950 | 5,650 | 9,800 | 3,750 | 2,100 | 85,550 |
| NSW | 299,150 | 208,050 | 490,150 | 336,650 | 253,400 | 190,900 | 291,400 | 88,250 | 41,650 | 2,199,700 |
| Victoria | 277,800 | 177,150 | 415,750 | 284,350 | 212,700 | 137,000 | 205,600 | 54,500 | 27,550 | 1,790,400 |
| Queensland | 195,350 | 129,900 | 332,950 | 193,300 | 131,600 | 89,050 | 127,950 | 41,950 | 17,100 | 1,259,150 |
| WA | 106,600 | 71,650 | 152,800 | 106,750 | 84,250 | 64,500 | 118,400 | 35,350 | 14,650 | 755,000 |
| SA | 72,300 | 51,450 | 120,200 | 79,200 | 54,100 | 36,200 | 42,400 | 8,450 | 3,650 | 467,950 |
| Tasmania | 24,200 | 16,600 | 39,500 | 22,850 | 16,450 | 8,100 | 11,700 | 1,200 | 750 | 141,300 |
| NT | 9,100 | 5,500 | 13,050 | 11,450 | 9,100 | 7,400 | 10,550 | 2,350 | 600 | 69,100 |
| Total | 996,350 | 668,850 | 1,584,250 | 1,047,700 | 770,550 | 538,800 | 817,800 | 235,800 | 108,050 | 6,768,150 |
Super guarantee increase winners by age 20-29
| State | 20-29 | 30-39 | 40-49 | 50-59 | 60-69 | 70+ | All |
| ACT | 28,050 | 25,500 | 15,300 | 10,500 | 5,300 | 900 | 85,550 |
| NSW | 591,250 | 590,100 | 444,750 | 368,150 | 181,150 | 24,250 | 2,199,700 |
| Victoria | 485,750 | 492,000 | 364,200 | 288,950 | 140,950 | 18,550 | 1,790,400 |
| Queensland | 354,850 | 326,450 | 258,450 | 211,100 | 96,250 | 12,050 | 1,259,150 |
| WA | 187,500 | 207,100 | 161,050 | 129,150 | 63,050 | 7,150 | 755,000 |
| SA | 122,000 | 116,050 | 99,100 | 84,250 | 42,400 | 4,150 | 467,950 |
| Tasmania | 35,500 | 33,600 | 30,250 | 26,200 | 13,900 | 1,900 | 141,300 |
| NT | 17,800 | 22,400 | 13,350 | 10,500 | 45,500 | 550 | 69,100 |
| Total | 1,822,700 | 1,813,200 | 1,386,450 | 1,128,800 | 547,500 | 69,500 | 6,768,150 |
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