Urgent changes are needed to boost the superannuation accounts of low income earners to help address the growing number of retired women living in poverty, according to Women in Super chair Cate Wood.
Speaking at the launch of the new Women in Super (WIS) Make Super Fair campaign, Ms Wood said there was a crisis in retirement outcomes for women which warranted an urgent rethink of how the superannuation system can better deliver for half of the population.
“When around 40 per cent of older single retired women live in poverty, we need to stop and say enough is enough,” Ms Wood said.
“We must do better than a system that sees women retiring with 47 per cent less than men. This is a crisis and unless we act now we will be leaving a tragic legacy for younger women.”
“It is not fair or reasonable to simply tell women to fix the problem themselves. We need to get the basics right.”
WIS called for the immediate implementation of the policy solutions to approve the super outcomes for women and low income earners.
- – Annual $1000 super contribution to provide a fair share of support for low income earners, up to a super balance of $100,0001
- – No further delay in increasing super contrubtions to 12%
- – Pay super on Paid Parental Leave
- – Remove the $450 monthly income threshold on super contriubtions which sees over 220,000 women per year miss out on super contributions
- – Require Government to undertake and publish a gender impact statement for any changes to age pension or retirement income policy; ongoing tracking by WGEA of women’s retirement gap.
Ms Wood said that structural inequity requires structural solutions and all elements of the package are required.
A spokesman for Revenue and Financial Services Minister Kelly O’Dwyer said the Government had announced a number of measures in the 2016-17 Budget “that will assist women increase their superannuation savings”.
- These included the introduction of the Low Income Superannuation Tax Offset will increase the superannuation savings of around 1.9 million women with annual income less than $37,000.
- The flexibility to make catch-up concessional contributions expected to allow around 230,000 individuals to make additional contributions in 2019‑20, including women who have taken time out of the workforce.
- Expanded eligibility will also allow an extra 5000 individuals to claim a spouse tax offset for contributions to the superannuation account of a low income spouse.
“These measures complement the Government’s existing superannuation co-contribution scheme, which matches after-tax contributions of low income earners at a rate of 50 per cent up to $500,” he said.
“Individuals can also boost their spouse’s retirement savings by ‘splitting’ up to 85 per cent of their concessional contributions each year to their spouse’s account.”