The Association of Superannuation Funds Australia (ASFA) is calling on the government to extend the Low Income Superannuation Tax Offset (LISTO) to reduce the gender super gap.
This would boost the super balance of low income earners by effectively refunding tax paid on super contributions.
The current threshold is $37,000, but ASFA believes this should be extended to $45,000.
Glen McCrea, deputy chief executive, said: “ASFA considers that this threshold should be raised to $45,000 (to equate with the top of the second-lowest income tax bracket) and that the maximum payment be increased accordingly to $700.
“This change would increase the number of women benefiting from the scheme from around 1.4 million to around 1.9 million per year.
“A core goal of super policy should be to improve equity in the super system including between men and women. These proposed policy changes are a big step in the right direction.”
Leading up to retirement, women have a median super balance that is 25 per cent lower than men as a result of taking time out of childcare or working part-time.
As well as changes to the LISTO, there is also the option to extend super to be payable on paid parental leave (PPL) that will benefit around 170,000 women each year.
Finally, a ‘Super Baby Bonus’ would deposit $5,000 in the super accounts upon birth of a child.
ASFA analysis showed a combination of the two factors would almost fully offset the impact of a year off work for parental leave.
Women aged 55–59 exhibited the largest difference between super balances, with a gap of $44,400 (or 30 per cent) between men and women while those aged 60–64 had a difference of $41,200, according to data from Morningstar.
In the May federal budget, super organisations criticised Treasurer Jim Chalmers for the missed opportunities in paying super on PPL or bringing the LISTO in line with the superannuation guarantee (SG).
Minister for Financial Services, Stephen Jones, responded that there was a limit to the government’s abilities and highlighted the extension of PPL’s time frame from July 2026 to 26 weeks.
“There’s a limit to how much we can spend. We’ve extended paid parental leave, we’ve got childcare initiatives, and there are substantial reforms for single parent payments,” he said.
