12 July 2023
urges action to close the retirement savings gender gap
ASFA is calling for the Government to reduce the gap in retirement savings between women and men.
Women generally have lower super balances than men across the whole age distribution. Leading up to retirement age, the median super balance for women is around 25% lower than for men.
“A key reason for the super gender gap is women taking time out of the workforce, or working reduced hours, to have and raise children” said ASFA Deputy CEO Glen McCrea.
ASFA has long advocated for policy change to reduce the super gender gap.
“Compulsory super should be extended to paid parental leave (PPL), including the Government’s PPL scheme – where a family can claim up to 100 days of paid leave at the minimum wage.”
For the Government’s PPL scheme alone, this change would benefit around 170,000 women per year.
ASFA has separately advocated for a ‘Super Baby Bonus’, whereby the Government would deposit $5,000 in the super accounts of women upon the birth of a child.
ASFA analysis shows that the combination of super on the Government’s PPL scheme and the Super Baby Bonus would almost fully offset the impact of a year off work.
“For women who return to work on reduced hours, extending the Low-Income Superannuation Tax Offset (LISTO) would boost super balances of low-income earners” said Mr McCrea.
The LISTO is a Government payment that effectively refunds tax paid on super contributions.
Currently, the LISTO applies to people who earn $37,000 or less, with a maximum payment of $500.
ASFA considers that this threshold should be raised to $45,000 (to equate with the top of the second-lowest income tax bracket), and that the maximum payment be increased accordingly to $700.
This change would increase the number of women benefiting from the scheme from around 1.4 million to around 1.9 million per year.
“A core goal of superannuation policy should be to improve equity in the super system – including between men and women. These proposed policy changes are a big step in the right direction,” concluded Mr McCrea.
For further information, please contact:
Jacqui Maddock, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.