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28 Mar, 2022
From 1 July 2021 to 1 July 2025, the Superannuation Guarantee will increase from 9.5% to 12% in 0.5% increments.
Under Australia’s Superannuation Guarantee laws, employers are normally required to pay the equivalent of 10% of ordinary time earnings in FY2021/22.
Because of a concern that this will still leave many retirees too reliant on the age pension, the Parliament legislated a gradual increase of the percentage to 12% by 2025.
Why the rise?
Increases in the super guarantee have been discussed and implemented for almost as long as compulsory super has been around. Back in 1995, just three years after compulsory superannuation was introduced, economists were already warning that super contributions at current rates were likely to leave employees with insufficient super for a comfortable, independent income by the time they retire. In recent years, it has been generally accepted by governments that the super guarantee would need to be raised to 12% in order to meet the basic needs of Australian retirees