Super baby bonus could end inequality
A baby bonus paid into the superannuation accounts of women who go on parental leave combined with paying super during their time off could address the significant gap between the retirement savings of men and women.
According to numbers from the Association of Super Funds of Australia (ASFA), women retire with an average of 23% less super than men.
ASFA economic modelling shows that a large portion of the inequity that arises when having a baby could be neutralised for a woman earning $80,000 and eliminated for a woman earning $60,000 or less by introducing two simple measures; the first being Superannuation Guarantee on paid parental leave, and the second being a Super Baby Bonus of $5000 for each child a woman gives birth to or adopts.
"As we recognise International Women's Day in 2022 and the theme #breakthebias, we are calling for support for women who take time out of the workforce to have or care for a baby," ASFA senior policy adviser Helena Gibson said.
"There is strong support among Australians for policy action. Results of a recent ASFA survey show that more than 80% of people agree that government should try to boost the super balances of women who take time out of the workforce to have children."
The research is based on balances of an average 30-year-old man and woman (in 2022) and assuming the woman has one baby over the period to 2030.
Industry fund HESTA has also used the lead up to International Women's Day to call for new policies addressing gender inequality in superannuation.
HESTA also wants to see SG paid on maternity leave and it is urging the government to introduce a "carer's credit" on unpaid parental leave which would see the super balances of primary carers boosted while they are not earning income.
In addition, HESTA is lobbying the government to act on an issue keeping many women out of the workforce - the affordability of childcare.
Universal access to quality, flexible early childhood education and care until children start school would help boost workforce participation for women with young children, HESTA said. Women's workforce participation rate when the youngest child is 0-5 years is almost 28.2% below that of fathers, and 12.2% lower where the youngest child is 6-14 years.
"There have been some significant reforms such as abolishing the $450 wages threshold for superannuation and improved super splitting arrangements, however, more needs to be done to improve financial security for future generations of women," HESTA chief executive Debby Blakey said.
"An incoming government needs to prioritise long-overdue superannuation equity measures and boost women's workforce participation through improved access to affordable childcare. Addressing gender inequity will not only create a better society but has real economic benefits that can help investors like HESTA deliver better outcomes for their members."
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