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New report reveals dire consequences of Super Guarantee backflip

Georgia Brown avatar
Georgia Brown
- 3 min read
New report reveals dire consequences of Super Guarantee backflip

An analysis released by Industry Super Australia (ISA) has found that millions of low and middle-income Australian families will not have enough to retire on if the government cuts the legislated Super Guarantee (SG) rise.

The SG has been legislated to increase from 9.5 per cent to 12 per cent by 2025, with the first 0.5 per cent increase scheduled for July this year. However, the government has indicated it is considering revoking this promise and redirecting the funding.

ISA’s report, titled Super Guarantee: Why we need 12%, found that if the super rate is frozen at 9.5 per cent, approximately half of all middle-income Australian families will not reach the benchmark of a retirement income that is 65 per cent of what they earnt while working.

Industry Super SG

Source: Industry Super Australia

ISA’s chief executive, Bernie Dean, has called on the government to re-commit to lifting the superannuation rate to 12 per cent.

“If the government cuts super, millions will not have enough for retirement and will have to drastically change their lifestyle,” Mr Dean said.

“For some people it could mean choosing between a night out or keeping the heater on, and for others it might mean selling their house just to keep going.”

The report also found that of the 6.1 million workers who will receive the scheduled SG increase in 2021, most will be women (3.2 million), about 63 per cent earn less than $70,000, and more people in their 20s will get the increase than any other age bracket.

According to ISA, the legislated increase will:

  • 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; 
  • This year, on average, only cost $8 a week for a full-time worker and $5 for a part-time worker, and;
  • Inoculate retirees from future adverse changes to the Age Pension.

Taking control of your super

Despite the government’s potential backflip on the legislated SG increases, there are a few things you can do to ensure your retirement nest egg is reaching its potential. Some of these include the following:

  1. Consolidate your super –Rolling your retirement savings into one fund will allow you to keep track of it and will typically save you money on excess fees and other costs.
  2. Make voluntary contributions – If it works with your budget, you might like to consider making personal contributions to your super in addition to the SG.
  3. Compare performance – It’s worth comparing the past performance of your super fund with that of other funds to ensure it is competitive. Remember, past performance isn’t necessarily an indicator of future performance, and there are other factors to consider when comparing funds such as fees and investment options.


This article is over two years old, last updated on April 30, 2021. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent superannuation articles.

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.