Economic security for women in retirement
The FPA is pleased that the Senate Economics References Committee report on the economic security of women in retirement has, for the most part, followed our recommendations. Specifically, the Committee has recommended that:
- The Superannuation Guarantee be paid on the Commonwealth Paid Parental Leave Scheme; and that mechanisms for improving the retirement incomes of carers be examined.
- Low income earners’ concessional superannuation contributions be taxed at a rate no higher than their ordinary income, and that the Australian Government commit to retaining the Low Income Superannuation Contribution (LISC) beyond 30 June 2017. [Note: the Government have proposed in the 2016 Budget, that the LISC be replaced with the Low Income Superannuation Tax Offset, which would also reduce the effective tax rate applying to the concessional superannuation contributions of low income earners.
- The Sex Discrimination Act 1984 is amended to ensure companies are able to make higher superannuation payments for their female employees when they wish to do so. As part of this process, the Australian Human Rights Commission should develop guidelines and advice for any organisation contemplating providing additional superannuation payments for women.
- All government policy analysis in relation to retirement incomes include specific analysis comparing the impact of each proposal on men and women. In addition, it is recommended that the government abandon its proposal to increase the Age Pension retirement eligibility age to 70 and maintain the current method of indexation and benchmarking for the Age Pension.
The Committee have also recommended that:
- The objectives of superannuation specifically refer to women’s retirement incomes, ‘to ensure gender equity is a continuing focus for policymakers’.
- Superannuation tax concessions be better targeted to assist people with lower super balances to achieve a comfortable retirement. [Note: in the 2016 Budget, the Government have proposed a number of superannuation measures targeted at low income earners and people with low superannuation balances.
- The Superannuation Guarantee percentage be increased faster than currently scheduled.
- The Superannuation Guarantee exemption for those receiving less than $450 per month be removed.
Read the full report
The superannuation measures announced in the 2016 Federal Budget (such as the new low income tops ups and the 5 year rolling concessional contributions cap) aim to address some of the issues raised by the Committee.