‘Financial disadvantage': Super boost to close gender gap

News.com.au

4 hours ago

Major superannuation changes are set to roll out across the country starting from July 1, set to help millions of women bridge the gender pay gap.
Starting next Tuesday parents taking government-funded paid parental leave will also receive a superannuation payment.
This additional payment is estimated to help the near 200,000 Australian mothers each year and narrow the gender superannuation gap by around 30 per cent.
According to the ASFA a woman taking 24 weeks leave the superannuation contributions will lead to $7,200 more at the time of retirement.
When the regime is extended to 26 weeks, the boost to the super balance increases to around $7,800.
ASFA chief executive Mary Delahunty said this is a major win for Australian women who take time out of the paid workforce to have and raise children, and helps reduce the superannuation gender gap.
'While compulsory superannuation has been delivering on its purpose of providing a dignified retirement for most Australians, it's long been known that women are often financially disadvantaged in retirement due to time taken out of work to have and raise a family. she said.
'The introduction of superannuation payments on government paid parental leave from 1 July on will go a long way to closing the gender superannuation gap.'
Australian treasurer Jim Chalmers said paying super on paid parental leave from this Tuesday is part of our efforts to ensure parents earn more, keep more of what they earn and retire with more as well.
'A sornger paid parental leave system is good for families and good for the economy as well,' he told NewsWire.
'This important change means a more dignified and secure retirement for more Australian parents and especially women.'
A second change which will see nearly 14 million workers will see their superannuation guarantee increase from 11.5 to 12 per cent starting from July 1.
While the changes seem small, the treasury uses an example of a 27 year old woman who has taken up a graduate position as a professional lawyer.
'During her career, she takes an extended six-year career break for the birth and care of her two children,' treasury estimates.
'Her balance will be $22,000 higher at retirement as a result of the permanent 0.5 percentage point increase in the SG rate from 11.5 to 12 per cent.'
Mr Chalmers says these reforms will make a meaningful difference for millions of Australians, helping them work towards a well-deserved and dignified retirement.
'Since we've come to government, we've increased the superannuation guarantee four times, and this means an extra $98,000 at retirement for a 30 year old earning the average full-time income,' Mr Chalmers said.
While the Albanese government has implemented an increase of the Superannuation guarantee from 10 to 12 per cent.
It was the then Morrison government who started the changes, which saw superannuation lift from 9.5 per cent to 12, at a 0.5 per cent increment a year.
The treasury department says the changes to Tuesday's superannuation guarantee will see 14 million employees have their retirement lifted.
The ASFA said this increase means a median 30-year old worker making $75,000 a year will add about $20,000 to their superannuation balance by the time they retire.
This $20,000 increase will mean the median 30-year old will retire with $610,000 in superannuation, above the $53,383 a year or $595,000 they would need for a comfortable retirement.
ASFA says a couple requires $73,875 a year or $690,000 combined in total to live comfortably in retirement using their super plus age pension top-ups.
The major caveat to these figures for singles and couples is owning your own home by retirement.
The National Minimum Wage and award wages will increase by 3.5 per cent from 1 July 2025, adding $0.85 per hour to $24.95 for full time staff.
Treasury estimates this change will add $75,114 over the average working life of an employee.