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Joint super peak bodies have urged for the Coalition to reverse its ‘optional’ proposal for the Commonwealth Parental Leave Pay scheme as it will undermine the purpose of the policy to boost women’s retirement savings.
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Coalition super amendment could exacerbate women’s poverty, warn peak bodies
13 September 2024
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The proposal introduced as an amendment to the bill will ask women to take the Commonwealth Parental Leave super payments as cash or additional leave, instead of super.
The Super Members Council (SMC) and Women in Super (WIS) have welcomed the Coalition’s support for the Commonwealth Parental Leave scheme.
However, the bodies do not support the push for cash payments or additional leave in replacement of super.
The peak super bodies believe the cashout proposal will send a “worrying” message to mums that they should sacrifice future financial security to meet daily living costs.
SMC said the Coalition’s suggestion for the scheme undermines the whole policy intent and is a worrying departure from bipartisan principles of universality and compulsion.
WIS revealed due to compound interest, the impact on women’s finances is $7,500 at retirement, “not simply” the $2,900.
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This proposal does not contribute towards closing the gender super gap or alleviating the risk of women retiring into poverty, according to WIS.
SMC CEO Misha Schubert has urged the Coalition to reverse the policy as it risks exacerbating women’s retirement poverty.
“This opt-out proposal is a deeply worrying departure from bipartisan principles of universality and compulsion in super that are key to a more financially secure retirement for all working Australians,” she said.
“It undermines the policy intent to boost the retirement savings of Australian mums and to start to turn around the gender super gap – which has been widening for women in their 30s.”
According to the peak super body, superannuation is universal and compulsory for the “compelling” reason of growing people’s retirement savings for when they retire.
Data from the council has revealed women retire with a quarter less super than men, which will likely deepen with the enforcement of this policy.
Schubert said undermining the superannuation system will leave all Australians ‘poorer’ in retirement.
“There are key policy foundations that have built the retirement savings of everyday Australians, if they are undermined or uphauled, all Australian savers will be poorer in retirement,” Shubert said.
“Compulsion and universality in super enable millions of Australians to have a far better quality of life in retirement.”
WIS CEO Jo Kowalczyk said they strongly urge the Coalition to “change course.”
“Why is it that once again, women are being asked to choose between financial security now and in retirement?” she said.
“The Coalition’s assertion that the value of the superannuation entitlement is a lump sum as it is ‘the same level of financial support’ as a payment into their super accounts is disingenuous.”
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