Key equity measures to boost female super

Yasmine Raso

Senior Journalist, Financial Newswire

1 February 2023

New modelling from HESTA has found the introduction of “equity measures” in the Federal Budget 2023 would promote a fairer superannuation system for women and low- and middle-income earners.

The Australian super fund’s 2023-2024 Pre-Budget submission showed how paying super on the Commonwealth Parental Leave Pay scheme, extending eligibility for the Low Income Super Tax Offset (LISTO) to those earning up to $45,000 and aligning the offset with the current Superannuation Guarantee (10.5%) would improve retirement balances across its member base.

If these measures were introduced, typical HESTA members with mothers could see their super in retirement increased by 3.7 per cent to over 11 per cent depending on how many children they have. The modelling also showed a quarter of a million HESTA members would see their super savings rise if the LISTO eligibility criteria were extended.

HESTA chief executive Debby Blakey said the upcoming Budget was a chance for the Federal Government to target the “motherhood penalty”, a term describing the potential future financial insecurity of women after exiting the workforce to care for children.

“Every dollar our members can add to their super counts. That’s why the Federal Budget is a key opportunity to make real progress on boosting women’s financial security in retirement,” she said.

“Our super system is one of the world’s best, but gaps remain that overwhelmingly disadvantage women and those earning lower wages.

“Now’s the time to address super’s persisting gender blind spot. Not only are these reforms the right thing to do, but our modelling also shows they could be life changing for members on low and middle incomes and would start us on the path to closing the gender super gap once and for all.”

Blakey said the Budget priorities should lie in paying super on the Parental Leave Pay scheme, as failing to do so “sends a clear message to women that unpaid caring work continues to be undervalued in our society”.

This comes as parental leave remains the only widely accessed form of paid leave that does not have balanced super contributions, disproportionately affecting women who are more likely the ones to take it, leaving them to retire with 25 per cent less super than men.

“This is a critical year for super to address longstanding inequities that overwhelmingly impact women, as they shouldn’t be financially penalised after spending their lives caring for others,” Blakey said.