In addition, ASFA has called for the removal of the $450 per month threshold for the super guarantee (SG) and for the SG to be applied to all substantive income payments, including paid parental leave, as part of a three-step policy agenda aimed at reducing the superannuation gender gap.
Currently, around 250,000 Australians miss out on around $75 million in superannuation due to the SG threshold, according to ASFA, particularly women who tend to work in casual or part-time jobs, often for more than one employer at a time.
ASFA said its removal will provide a substantial boost to the retirement savings of women.
The association also argued that applying the SG to all substantive income replacement payments, including paid parental leave, could add thousands of dollars to the super accounts of women.
“Even just six months of SG applied to the paid parental leave of a 35-year-old woman earning $50,000 could add an extra $10,000 to her final super balance,” said ASFA.
The association has also addressed the need for the Anti-Discrimination Act to be amended in order to allow employers to pay their female employees more superannuation without being in breach of the legislation.
ASFA chief executive Pauline Vamos said women currently retire with around half as much as men in their superannuation account, leaving them drastically short of the savings required to live a comfortable retirement.
“Many women face challenges when it comes to accumulating adequate retirement savings: they are often in lower paid jobs, or work casually or part time, and they often take more time out of the workforce than men to look after children or family members,” said Ms Vamos.
“This makes it hard for them to build up the savings required to live with comfort and dignity in retirement.”
What people fail to realise is that any increase in compulsory super (and lets face it few employers would pay higher super voluntarily)is likely to come out of future wages growth.
We have recently seen the reduction in wage growth (to one of its lowest points in modern history). Whilst some of this is undoubtedly attributable to the “horrific” economic conditions we are experiencing one would also assume that the rise in compulsory super has eaten into the wages growth.
I would argue that by increasing compulsory super for women you will limit their current cash in hand earnings growth.
If for someone (male or female)superannuation is a worry for them then perhaps they need the cash in hand to meet their current day-to-day living expenses rather than their needs 20+ years down the track.
Definitely in favour of reviewing the $450 per month threshold. If the intent is for superannuation support for workers and with current technology, it can’t be too cumbersome for employers to pay SG regardless of someone’s income.
My understanding is that certain Modern Awards have either no minimum or no income base. If this is true, then the $450 per month threshold doesn’t seem to have a place in the modern world.
I almost can’t believe I’m reading this. At present, there is NO discrimination. ALL employees are the same ratio of super to earnings, irrespective of gender. Because the “average” woman spends less time in the workforce or works less hours is NOT discrimination. Any suggestion that women should get paid a higher rate of super than men is, by definition, discriminatory. Yet, it will surprise nobody that we only call it discrimination if it favours men over women.
Many men at the moment also retire with very little in super so why the positive discrimination. That is what the higher contributions for those over 50 years supposed to assist. Mat be go back and kook at Deloitte suggestions of a lifetime limit on contributions rather than annual.