Changes to boost women’s super
When Paul Keating introduced compulsory superannuation some 30 years ago, the main losers were women with their extended breaks from paid work, part-time workers and people with multiple superannuation accounts, collected as they move from one employer to another.
Over the years, the Federal Government has worked to redress these issues, making compulsory superannuation more accessible to low paid workers and people who constantly move between jobs.
Compulsory super contributions now apply for example to all workers including those employed in part-time positions regardless of how little they may earn working for any one employer.
It is also much easier to consolidate superannuation funds and workers can now insist that their super is paid into the fund of their choosing. So workers don’t have to accept their employer putting their super into say an industry fund, just because its easier for the employer to make one payment to one fund.
In another step in making compulsory superannuation fairer for all Australians, the Federal Government has now taken steps to help millions of women who are on extended leave for family reasons to continue to receive super contributions during this time.
Starting from today, women who are taking government-funded paid parental leave, will also receive a superannuation payment paid to them as if their parental leave income were wages.
This additional payment is estimated to help the near 200,000 Australian mothers each year who do on extended leave and narrow the gender superannuation gap at retirement by around 30 per cent.
According to the ASFA, a woman taking 24 weeks leave will now have $7,200 more at the time of retirement. When the regime is extended to 26 weeks, the boost to the super balance increases to around $7,800.
ASFA chief executive Mary Delahunty said this is a major win for Australian women who take time out of the paid workforce to have and raise children and helps reduce the superannuation gender gap.
While this may appear to be a small step, it is an important step in recognising that women have been treated unfairly with the compulsory superannuation system since it started some 30 years ago.
It should also lead to reducing the inequality between the total balance that your average Australian retires on, with women still reporting significantly lower super balances at retirements then their male counterparts.