Making Super Fair For Women
Published on: Nov 13 2018
The SDA’s ongoing work to ensure women receive equal access to dignity and security in retirement.
By Barbara Nebart, Branch Secretary
Australia’s superannuation system fails women
Women currently retire with on average 47% less superannuation savings than men.
Despite a life time of work – paid employment and unpaid caring – many women won’t be able to afford to retire with dignity. 90% of women will have inadequate retirement savings and women are at much greater risk of retiring into poverty with around 29% of women over 65 years living below the poverty line.
How the superannuation system is failing women
The current superannuation system relies on an outdated model, designed for paid, full time and continuous work. This structure inherently discriminates against women who are more likely than men to have interrupted work patterns due to unpaid caring responsibilities. Women are also more likely to be employed in part-time or casual work, while they balance work, family and caring responsibilities.
Our society and economy does not appropriately value or financially compensate those who undertake the role of carer for our children, ill, disabled and elderly. A role which predominately falls to women. Unpaid carers need to be properly funded and recognised in a system that improves the economic security of women.
The system also needs to acknowledge that women are more likely to be in lower paid employment and allow for superannuation tax concessions. Ensuring that tax concessions are fairly distributed and are assisting people on lower incomes will provide a positive outcome for women and help to reduce the gender superannuation gap.
Currently the superannuation system mainly benefits people who are already in a privileged position. With half the annual cost of superannuation tax breaks goes to the top 20% of wage earners and less than 10% goes to the lowest 40%.
The purpose of superannuation should be the accumulation of a retirement income not the accumulation of wealth.
Making superannuation fair for women
The ALP has made a range of commitments regarding women and carers receiving their fair share when it comes to superannuation, including:
- Ensuring that recipients of Commonwealth Paid Parental Leave and Dad and Partner Pay payments continue to receive super contributions.
- Phasing out the $450 minimum monthly income threshold for eligibility for the superannuation guarantee.
- Making it easier for employers to make extra payments into a woman’s superannuation fund.
- Improving transparency by committing to consider and publish the impact that any future changes to super would have on women.
Further to this the SDA recommends:
- Extend the Government Paid Parental Leave Scheme to provide universal access to a minimum of 26 weeks paid parental leave plus superannuation.
- Amend the Superannuation Guarantee (SG) Legislation so that employers are obligated to make superannuation contributions during periods of employer paid parental leave and unpaid parental leave for primary and secondary carers. The SG should be paid on ordinary time earnings for the employee for the period of 12 months, as provided for in the Fair Work Act 2009.
- Implement a range of changes to legislation aimed at eliminating discrimination against women and carers and providing the right to part-time or reduced hours for parents and carers.
- Amend the SG Legislation to remove discrimination against employees who are under 18 and over 70. Superannuation should be paid by employers for all ordinary time earnings regardless of age, earnings or hours worked.
- Bring forward the current schedule for the increase in the SG rate to 12 per cent.
- Improve the Low Income Superannuation Tax Offset which will provide more in superannuation to the lowest income earners.
- Ensure that carers who are recipients of Parenting Payments, Carer Payments or Allowances, or Family payments receive Superannuation contributions on these payments. As this is contributed during the periods of caring it will have the benefit of compound interest which applies to superannuation and will be worth substantially more at the time of retirement than the initial investment made by government.
- Implement fairer progressive tax rates to superannuation contributions to remedy the gap in superannuation.
- Superannuation tax concessions should be shifted from higher income earners to low income earners.
- Consider options to boost women’s superannuation – for example: following a period of parental leave or extended carer's leave, allow averaging of earnings for income tax purposes over 5 year periods. With any tax benefit/refund being paid into the recipient’s superannuation account
- Ensure proper investigation and compliance of unlawful industrial practices especially non-payment of super. Establish a mechanism to enable individuals and unions to make claims to retrieve non-payment of wages and superannuation. Increase penalties for employers who fail to pay the SG.
- That the government ensure fair effective marginal tax rates for second-earners who are more likely to be women. This also needs to be assessed when making changes to tax benefits such as Family Tax Benefits.
- Ensure a genuine safety net of terms and conditions of employment which particularly impacts on women who are more award and minimum wage reliant. This has a substantial impact on the ability to accumulate superannuation over a working lifetime.
The SDA will continue to advocate and work to ensure women receive equal access to dignity and security in retirement. To keep up to date with how this progresses and other SDA news please follow us on Facebook.
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