Industry Super Australia’s Deputy Chief Executive Matthew Linden says men retire with about 40% more super than women on average, and the Morrison Government could have made closing this gap a priority by proposing to pay super throughout parental leave.
He said the government’s superannuation proposals, as outlined in the Federal Budget on Tuesday night, were mostly aimed at older Australians, including those with already healthy super balances.
“Sadly, the budget again misses an opportunity to take action to help the millions of Australians missing out on super entitlements – particularly women and younger workers,” Mr Linden said.
Financial Planning Association CEO Dante De Gori said Australian women were still at an enormous disadvantage when it came to superannuation.
“We’re disappointed not to see more measures to address the gender retirement gap in this budget other than increasing the spouse contribution age limit,” Mr De Gori said.
Canstar’s Group Executive of Financial Services Steve Mickenbecker said typically women were more likely to take a career break to raise children, which hurts their retirement savings.
“Savings are potentially further diminished by generous parental leave programs that result in women being out of the workforce for longer (without any super contributions),” he said.
The superannuation changes in the Federal Budget include:
- Those aged 65 and 66 years will be able to make voluntary concessional and non-concessional super contributions, without meeting the work test of 40 hours over a 30-day period.
- Currently, super members aged less than 65 can make three years’ worth of non-concessional contributions in one year. The budget proposes to extend this to members aged 65 and 66 years, allowing them to make non-concessional contributions of up to $300,000 in a single year.
- Members will also be able to make voluntary contributions for a spouse up to age 74. The current cut-off is 69 years.
Labor leader Bill Shorten has previously announced a $400 million plan to close the gap between women and men’s retirement savings, including top-up payments for thousands of super accounts every year for those on parental leave.
He is expected to target women with bigger tax cuts for working mums on low incomes and the promise of better superannuation outcomes during his budget reply speech tonight.
Mr Mickenbecker said increasing the upper age limit for making additional superannuation contributions gives senior Australians the opportunity to transfer savings into their super at a stage when their wealth tends to peak.
He said the budget did also contain some initiatives to help boost young people’s retirement savings, including the concept of opt-in insurance for under 25 year olds and the proposal to transfer the balances of inactive superannuation accounts to the Australian Taxation Office to consolidate with a person’s active super account.