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The need to bridge the superannuation balance gender differential has long been on the agenda for many in industry and government.
In recent years there have been a number of policies intended to provide individuals who spend time out of the workforce with the ability to make ‘catch up’ contributions, obviously targeting women, with some albeit limited success.
Recent research from Roy Morgan has seen the gender balance cap close somewhat over the last decade – but not in all areas. 
While there are now 70.9% of women who have superannuation (up from 66.2% a decade ago), the average balance for women still sits at approximately 71% of the average male balance – a closure of just over 6% in the last 10 years.
Progress is being made, but far slower than we would have liked. By ‘we’ I mean both industry and women.
So, in terms of policy settings and the industry seeking positive change, what else can be done to help close the gap? In conjunction with the Federal Budget which was announced last month, here are my top five suggestions:
1. Parental Leave & Super
A long-standing request from industry is that superannuation be paid on parental leave. An obvious reason behind why we see a gap is that traditionally women spend longer out of the workforce. While the Government dropped this historic election promise due to the cost, many have been calling for its reintroduction, especially given the additional Budget revenue proposed from extra tax on earnings for superannuation balances over $3 million.
2. Aligning the Super & Pay Cycles
Already proposed for this year’s upcoming Budget is the alignment of superannuation to salary payments. Rather than having superannuation being paid quarterly, the Government has just announced that from 1 July 2026, employers will be required to pay superannuation at the same time as wages. This proposal will assist in mitigating the $1.3 billion annual loss in unpaid super and subsequent earnings that impacts one in five women. As long as it is enacted after next week’s impending announcement, then the Commonwealth should be congratulated for this initiative.
3. Considering Carers
With our aging population living longer, family members often find themselves providing care for parents and other family members more frequently than in previous years or as compared to older generations – and this role traditionally tends to fall to women. Given this often leads to additional time out of the workforce, it would be worth considering the measures available to assist family carers, possibly those who are on support payments, or even additional supplemental contribution caps for people performing this essential service.
4. Removing the 5-year cap on ‘Catch Up’
A positive change has been the ability for individuals with super balances of less than $500,000 to ‘catch up’ on a return to work by utilising up to five years of previous potential contributions. However, many people, especially women, spend more than five years out of the workforce giving birth to and subsequently raising kids, among other demands of life. So, the actual cost of extending this time period should be considered against the benefit it could provide for a primary carer and the broader economy in terms of workforce participation and productivity.
5. Contribution Rebates for Primary Carers
While the ability to make ‘catch up’ contributions has been a positive step in the right direction, it requires individuals to have the cash flow available to be able to do so, which is often not until later in life, and then also impacts on lost earnings. A rebate on the contribution tax, up to a certain limit yet to be determined, would provide a higher balance available for those who meet carer criteria.
FOR MORE INFORMATION
If you would like to learn more about the topics discussed in this article, please contact your local RSM office.
