in brief: superannuation changes to affect working women
The Coalition Government plans to axe a rebate for low-income workers, which is set to affect up to half of all working women and will also hit rural workers.
The plan is to scrap a $500 Low-income Super contribution for people earning less than $37,000 a year, as part of the bill to abolish the mining tax. Industry superannuation funds are proposing a tax offset for all workers and scaling back the Coalition’s paid parental leave scheme in order to maintain the rebate.
According to Industry Super Australia (ISA), the move will cut up to $27,000 from the retirement savings of 3.5 million Australians, most of which is set to be taken from savings already in funds, particularly from women and rural and younger workers. The Minerals Resource Rent Tax (MRRT) repeal bill may also delay increases to compulsory super contributions made by employers.
The axing of the rebate is set to undermine efforts to improve women’s retirement savings, and will affect the income of around 2 million working women, and up to 80 per cent of part-time workers.
ISA chief executive David Whiteley said that the changes are ‘unfair and unsustainable.’ He said the cuts leave low-income workers without a tax concession on their super, with high-income earners already receiving concessions.
The Coalition mentioned the cutting of the contribution during the federal election campaign, and has confirmed the move earlier this month.
The Opposition has described the move as ‘warped’ and has vowed to fight the move in Parliament.