Low-paid, unskilled workers who rely on the gig economy to make a living are missing out on mandatory employer superannuation, according to Australia’s peak super body.
- Workers earning under $450 a month not entitled to compulsory employer super contribution
- Some employers treating workers as “independent contractors” to avoid paying super
- Super fund discussion paper reveals almost 25pc of self-employed workers have no super
The Association of Superannuation Funds of Australia (ASFA) wants the current compulsory superannuation system overhauled to ensure workers employed by the likes of Uber, Deliveroo and Airtasker can build retirement nest eggs.
ASFA wants current rules changed, where workers earning less than $450 in a calendar month are not entitled to the compulsory employer contribution.
Chief executive Martin Fahy warns the rapid growth of the gig economy means many independent contractors are being disadvantaged and, in some cases, exploited by unscrupulous employers.
“Workers who already operate under some form of independent work arrangement, such as independent contractors, will migrate onto web-based platforms and new gig economy jobs will be created,” Dr Fahy said.
“The case for change is strong. In the absence of any policy reforms, a growing gig economy would mean lower superannuation balances at retirement.
“This would reduce the broader adequacy of the superannuation and retirement income system.”
ASFA estimates there are around 100,000 workers — or 0.8 per cent of the workforce — who make their living from web-based platforms such as Uber, Deliveroo and Airtasker are potentially disadvantaged by missing out on compulsory superannuation payments.
Research by ASFA also warns about “sham contracting”, where dodgy employers disguise an employment arrangement as “independent contracting” to avoid responsibility to pay the superannuation guarantee.
Dr Fahy said the rise of the gig economy means compulsory superannuation regulations need to be revamped to cover self-employed workers who might make their living from a number of jobs.
The rise of the “gig economy”, where workers are not engaged as traditional employees, may further threaten endangered trade unions.
“This is particularly relevant for people who work sporadically and are on low incomes, but also for those who work in the gig economy as a second job,” Dr Fahy said.
“Workers who inhabit this legal ‘grey area’ are showing growth in worker numbers. This issue will only become more prevalent.”
ASFA has released a discussion paper examining the superannuation and retirement risks for workers in the gig economy.
In the paper, ASFA says almost a quarter of self-employed workers have no superannuation, with women more disadvantaged than men.