While welcoming some new announcements from Treasurer Josh Frydenberg’s latest budget, the superannuation industry has expressed broad disappointment in the lack of measures to improve the retirement outcomes for women.
Paying super on Commonwealth parental leave pay was a key recommendation made by the industry in the lead up to the budget but was not included in this year’s budget.
“This budget was another missed opportunity to narrow the gender super gap and it’s disappointing the government did not make a modest investment in the financial future of millions of mums and pay super on parental leave,” commented Industry Super Australia chief executive Bernie Dean.
“Working mums are going to keep falling behind until super is paid on parental leave.”
HESTA CEO Debby Blakey said that the super system still had a “persisting gender blind spot” that saw females retire with nearly a third less super than males.
“Eighty percent of HESTA members are women, and those who raise children continue to pay an unfair financial penalty through inadequate super balances, leaving too many vulnerable to poverty as they age,” she said.
The super fund, whose members are mostly in the health and community services sectors, had also called for the introduction of a super “carer credit” to compensate parents for super lost due to unpaid parental leave, however this was not included in the budget.
“Women predominately take on the primary caring role, making an enormous contribution to our economy and society through raising children,” said Ms Blakey.
“Our super system needs to recognise this by helping new parents get their retirement savings back on track, ensuring they’re not penalised with financial insecurity later in life.”
HESTA did point to a number of measures that are expected to improve the workforce participation of women as well as retirement outcomes including paid parental leave changes that allow eligible working parents to share up to 20 weeks of flexible entitlements.
Also expressing disappointment in this year’s budget, the Australian Institute of Superannuation Trustees (AIST) repeated its calls for an assessment into the financial coercion of women who used the early release of super scheme during the pandemic.
“This information is critical in informing future policy decisions and avoiding unintentionally facilitating abusive behaviour and also aligns with the government’s commitment to end family violence,” AIST CEO Eva Scheerlinck.
“We also note the extension of the temporary reduction in the minimum drawdown rates of account-based pensions, but this mostly benefits people with larger balances, and many retirees simply don’t have enough in super to be able to support themselves if they halve what they get from their account-based pension.”
