The catch behind a proposed $5000 baby bonus
The Association of Superannuation Funds of Australia (ASFA) is proposing a $5000 superannuation baby bonus be introduced, as the industry also calls for the government to prioritise the removal of the $450 threshold as parliamentary sitting resumes.
Releasing details of its pre-Budget submission, ASFA has called for the introduction of a $5000 super baby bonus, payable upon the birth or adoption of a child.
The $5000 figure would be equivalent to the amount in superannuation guarantee contributions a person on a $60,000 salary would receive, ASFA says, adding that such a measure could benefit up to 300,000 women.
"While the superannuation system is well-designed and working for the majority of Australians, there is a significant gap of 23.4% in superannuation balances between men and women as they approach retirement," ASFA chief executive Martin Fahy.
"A recent consumer survey undertaken by ASFA found more than 80% of respondents believe the government should take measures to boost the super balances of women who take time out of the workforce to have children."
ASFA added that the super baby bonus would supplement proposals to pay SG on paid parental leave, as well as the removal of the $450 income threshold.
Super fund Rest and industry body Women in Super have both urged the government to prioritise the removal of the monthly income threshold to improve the retirement outcomes of low-income Australians.
Its removal has bipartisan support and the legislation containing the measure was tabled late last year.
"With the federal election due in the coming months, there are only a handful of days left to ensure this critical reform is passed in time for the proposed start date of July 1, 2022," says Rest chief executive Vicki Doyle.
"The $450 threshold is preventing thousands of lower-income workers from receiving retirement savings for every dollar they earn. They can't afford for this change to be delayed any longer."
Meanwhile, Women in Super says the estimated 300,000 workers currently earning less than $450 a month will continue to be penalised if the reform is not passed.
"Time is running out for women on low incomes and people working multiple small jobs," says Women in Super chair Kara Keys.
"The Bill is before the Parliament this week and has bipartisan support. There is no reason not to pass it."
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