It’s time the Commonwealth Government finally addresses the outdated superannuation system that sees Victorian women retire with much lower superannuation balances than men.
The Andrews Labor Government’s submission to the Commonwealth’s Review of the Retirement Income System makes a number of recommendations aimed at making sure women enjoy the same financial security in retirement as men – and aren’t penalised for taking time out of the workforce to have children.
Currently, women do not earn super on the Commonwealth’s Paid Parental Leave scheme. This means their superannuation balance takes an immediate hit, while they also forego compound interest for the rest of their working lives.
It’s unfair and it fails to recognise the professional hurdles they face when raising children.
The case for action is clear: The average woman’s superannuation balance at time of retirement in 2015/16 was $157,050, compared with $270,710 for men. That’s a 42 per cent superannuation gap.
That’s why the Labor Government’s submission makes a number of recommendations, including:
- Making superannuation payable as part of the Commonwealth’s Paid Parental Leave scheme
- Mandating superannuation funds to introduce a fee-free period of up to 12 months for parents on parental leave
- Allow joint superannuation accounts for couples, including same-sex couples
- Amend the sex discrimination act to allow employers to offer higher superannuation payments for female employees without requiring them to seek exemptions
As part of its recommendation, the Labor Government wants the Commonwealth Government to deliver on its commitment to increase the Super Guarantee rate to 12 per cent – and provide a pathway for it to be lifted to 15 per cent.
The Government also wants to see the abolition of the $450 monthly earnings threshold that disadvantages part-time or casual workers who work more than one job, and making superannuation payments payable on pay day in part of a bid to end some companies committing superannuation theft – a form of wage theft.
As noted by Treasurer and Minister for Industrial Relations Tim Pallas
“The superannuation system is outdated – and it needs refreshing to stamp out the discrimination that some Victorians face.”
“We’re calling on Canberra to fast-track its commitment to lift the superannuation rate to 12 per cent – and provide a pathway for it to be increased again to 15 per cent.”
As noted by Minister for Women Gabrielle Williams
“Women encounter various forms of discrimination in the workplace, including through the existing superannuation system. This is a chance for the Commonwealth to make it fairer for women and the community as a whole.”