Casual workers need active approach to super

Casual workers can face an uphill battle saving for retirement, which is why a proactive approach is essential.

Around one in five Australians are casual workers, and this number is likely to swell as school leavers take up casual jobs over the holiday period.

Casual work can earn a higher hourly rate than permanent jobs but that’s about where the perks end. The big downside is the potential to be short-changed on super.

Super Guarantee payments are far from guaranteed

Employers aren’t obliged to make super contributions if you earn less than $450 per month. And for casual workers, who may at times earn less than this, it’s important to take action to avoid a financially lean retirement.

If you’re juggling several jobs, it can be worth pushing for more hours with one particular employer. That’s because employer-paid super contributions are based on 9.5% of your total ordinary time earnings – not just the amount above the $450 threshold.

For instance, if you work two jobs and earn $450 a month from each employer, you’ll receive a monthly wage of $900 but no employer-paid super.

However, if you can work more hours with Employer A so that you’re earning, say, $600 a month, while earning $300 per month from Employer B, your total income won’t change, but Employer A will be required to pay $57 into your super fund each month.

Choose your fund. Take it with you

Casual workers aren’t the only people facing the risk of low super savings. An estimated 100,000 Australians work in the ‘gig’ economy, using web-based platforms like Uber to pick up work where they can. On top of this, around 4.1 million Australians do some sort of freelance work.

If that sounds like you, it’s important to choose your own fund rather than relying on an employer’s default option. This makes it easier to stay connected with your super throughout your working life.

Embrace voluntary contributions

It’s also worth looking at ways to grow your super. I realise many casual workers earn a modest income but establishing a savings routine and making regular voluntary contributions to your super can pay off.

As an added incentive, if you earn less than $36,813 in the current financial year, adding to super from your own pocket could see the Federal government chip in up to $500 through the super co-contributions scheme.

Check out AMP’s range of superannuation calculators to see how personal contributions, and other super-related choices you make today, could make a difference to your retirement nest egg.


Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

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