Once legislation has been passed, gig workers’ benefits and standards will be determined via conversations with the FWC, and it is highly likely that superannuation will be included in their perks. With research showing that adding superannuation to gig workers’ benefits could boost their retirement balances by an average of $29,000, it’s no surprise that this decision has been welcomed by Industry Super Australia (ISA) and other advocates of financial inclusivity.
Why Superannuation is Important for Gig Workers
Gig workers, like anyone else, need financial security in their retirement. The difference is that these workers are not usually offered access to superannuation, which is a standard retirement perk for Australian workers. Extending superannuation to gig workers, as suggested by the ALP commitment, will go a long way in building up their retirement balances.
Research from ISA demonstrates that gig workers, who are predominately young, would benefit a lot from superannuation earned during their time in the gig economy, as an extra $29,000 in retirement balances would make a significant difference for these workers. Furthermore, since gig workers are usually students, unemployed individuals, or people living with disabilities, small super contributions could be financially meaningful for when they retire, as evidenced by the data from ISA.
The Benefits of Superannuation to Different Sectors of Gig Workers
The benefits of extending superannuation to gig workers will vary significantly by sector, according to ISA research.
Gig economy workers operating in the transport and delivery sectors and the human service sector, such as carers and support workers, would receive a substantial positive impact due to the extension of superannuation.
Workers in these sectors with an average income and hours of work could gain between $1,100 and $1,900 extra annually if they were to receive super. If they worked in the gig economy for three to five years, they would get between $10,800 and $28,700 extra benefits.
These figures are based on age assumptions, such as the predominately young age of gig workers, and the length of time they have to accumulate a super balance.
Gig Workers Deserve Financial Security and Inclusion
It is unacceptable for gig workers to be without basic financial security, such as superannuation. It reduces their chances of living a fulfilling retirement, and it hurts the national interest by making more people reliant on the tax-subsidized age pension system.
Paying superannuation to gig workers is not merely the right thing to do; it also makes economic sense because they will be more self-sufficient in retirement.
Furthermore, since the gig economy has become a vital cog in caring for the elderly and delivering food and other commodities as well as providing repairs and maintenance for homes and personal belongings, it is vital that these workers be granted a decent livelihood that they can rely on. By treating gig economy workers like other workers, albeit with some differences as to their work structure, the government can significantly improve their financial well-being, productivity, and happiness. As a result, it’s imperative that extending superannuation to gig workers becomes law sooner rather than later.
Gig workers deserve basic financial security, like any other Australian worker, and it's heartening that the Albanese government and Labor are taking steps to make sure that they receive it.
Industry Super Australia's research shows that extending superannuation to gig workers could provide them with a significant boost of $29,000 in retirement balances, which will make an enormous difference in their financial well-being in old age.
This proposed legislation is a step in the right direction towards financial inclusion and could make the gig economy an even more efficient, productive, and satisfied workforce.
