improving women's retirement OUtcomes

The current system is not fair, efficient or sustainable and we need to change it

Make Super Fair

The Women in Super (WIS) Make Super Fair policy is aimed at improving economic security for women in retirement as the current system is not fair, efficient or sustainable:

  • Women still retire with 47% less super than men
  • It is estimated that more than 40% of older single women live in poverty
  • Women are more dependent than men on the age pension
  • The fastest growing cohort of homeless people is single older women
  • Tax concessions in superannuation are skewed towards high income earners – a more equitable redistribution of tax concessions could make a meaningful impact on the gender super gap. 

WIS has developed a five point plan to address these issues and work towards developing a fairer system that sees women and low income earners reach greater economic security in retirement:

  1. Additional annual $1,000 government contribution into super for low income earners, to better support those with inadequate retirement savings
  2. No further delay to scheduled superannuation guarantee (SG) increases
  3. Pay SG on the government paid parental scheme
  4. Remove the $450 monthly income threshold on SG contributions
  5. Require Government to undertake and publish a gender impact statement for any changes to age pension or retirement income policy; ongoing tracking by WGEA of women's retirement gap.

Modelling carried out by Rice Warner was central to the development of the Make Super Fair campaign. From the research undertaken it was found that the proposed additional $1,000 contribution would cost just $2.7 billion per year and would be targeted at low income earners, most of whom are women and who need government help to achieve economic security in retirement. It is estimated that the Government spends $30 billion on super tax concessions annually and the majority of current super tax concessions are paid to high income earners, who do not need government help to achieve a comfortable retirement.

Additional $1,000 contribution

An additional $1,000 government super contribution for low income earners would better support those with inadequate retirement savings. It would mean people earning less than $37,000 per annum receive the annual contribution until their balance reaches $100,000 while they fall within the low income bracket. This would see a woman aged 25 with a starting salary of $25,000pa and projected retirement balance of $205,210 reach $235,347 making a $30,137 (+ 14.7%) increase. This 14.7% increase could mean the difference between retiring in poverty or not.

Increase the Superannuation Guarantee to 12%

The current 9.5% Superannuation Guarantee (SG) will not enable most women to accrue sufficient savings for a comfortable retirement. It is important for women that the SG is increased to 12% as soon as possible.

Removal of the $450 Monthly Threshold

An estimated 220,000 women and 145,000 men are missing out on $125 million of superannuation contributions as they do not meet the requirement to earn $450 per month (before tax) from one employer (many women work more than one part-time job).

Include Super in Paid Parental Leave

Many women miss out on thousands of dollars of super and, in fact, their super savings stagnate and begin to fall behind those of men during child rearing years. WIS strongly supports the Australian Government’s Paid Parental Leave Scheme (PPLS), which commenced on 1 January 2011. However, we believe it is essential to include SG payments in this scheme, as recommended by the Productivity Commission, so that all parents – especially mothers – can continue to grow their superannuation while on parental leave.

Gender impact statement

A number of factors act against women reaching the best possible retirement outcomes, and the impact of tax, economic and social policy can have different consequences for women as opposed to men. As part of our Make Super Fair policy, we recommend that the government measure and publish the super gap each year, and assess the impact that any future legislative changes to super would have on women. WIS has also expressed the need to reinstate the Women’s Budget which would allow proper analysis of the impact of the budget on women, and could help in rectifying the gender super and gender pay gap.   

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