Super scheme combo to benefit 2m women

Yasmine Raso

Senior Journalist, Financial Newswire

13 July 2023

New research conducted by the Association of Super Funds of Australia (ASFA) has found that combining compulsory super on paid parental leave (PPL) with a ‘Super Baby Bonus’ would compensate a female’s super lost while raising a child for a year.

The representative body said this initiative would help to bridge the gender gap in retirement savings between women and men, which, according to its analysis, is currently sitting at 25 per cent.

ASFA Deputy CEO, Glen McCrea, said a key driver of the super gap is women taking time out of the workforce or working less hours to have and raise children, as several industry bodies and funds have urged the Government to extend compulsory super to PPL schemes for families to claim up to 100 days of paid leave at minimum wage.

This change to the Government’s PPL scheme only would benefit approximately 170,000 women per year, where ASFA’s $5,000 ‘Super Baby Bonus’ initiative added onto super aligned with PPL would come close to covering a full year off from work.

McCrea also suggested extending the Low-Income Superannuation Tax Offset (LISTO) to women who return to the workforce on reduced hours and increasing both the threshold and the maximum payment.

A Government payment that refunds tax paid on super contributions, the LISTO is only available for those who earn $37,000 or less and offers a maximum payment of $500. ASFA is recommending raising the threshold to $45,000 to align with the top of the second-lowest income bracket and increasing the maximum payment to $700.

These changes would mean an extra $500,000 women benefit from the scheme, taking the total number to 1.9 million.

“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,” McCrea said.