Gender super gap remains a problem - what you can do about it

While Australian superannuation balances have been growing overall, a significant super gap still exists between men and women. While recently-passed super reforms could help address this disparity, there are also options available that may be able to help some Australians take control of their superannuation and safeguard their retirements. 

What is the gender superannuation gap?

According to the latest data from the Association of Superannuation Funds of Australia (ASFA), at the end of June 2022 the average superannuation account balance for men aged 15 and up was $182,667, with a median balance of $66,159. For women, the average balance was $146,146, with a median balance of $52,075. Looking at Australians closer to retirement age, the median balance in June 2022 for men aged 60–64 was $205,385, compared to $153,685 for women of the same age.

ASFA CEO, Mary Delahunty, said that as women are more likely than men to spend longer out of the workforce following the birth of a child, this becomes a financial penalty for women in retirement.

“The introduction of super payments on paid parental leave will assist to bridge the gender retirement gap but there is still work to be done.  Adequate and equitable pay, the valuing of care work, and tax settings all need examining to ensure women aren’t left behind.”

Some of these proposed superannuation reforms to address these gaps include expanding the Low-Income Superannuation Tax Offset (LISTO), and compulsory super contributions for government paid parental leave, which recently passed in parliament.

What can Australians do about the gender superannuation gap?

While governments and businesses could take action to address the gender superannuation gap by providing flexible working arrangements, closing the gender pay gap, and encouraging men to take more paternity leave, individual Australians may also be able to make small but important changes to their super arrangement that could have significant effects on their retirement lifestyle further down the line.

Where possible, women could consider making additional voluntary superannuation contributions out of your pre-tax income (a salary sacrifice) or post-tax income. Depending on your personal situation, making post-tax super contributions could mean the government may also make a super co-contribution. Making extra super contributions could also potentially affect your taxes – check with the ATO and/or a tax accountant for mode details of how this could affect your personal finances.  

Partners of birth-giving parents who are still in full-time employment may be able to make voluntary contributions into the birth-giving member’s superannuation account so that they do not fall behind while on parental leave. These could be pre-tax or post tax contributions, each with their own terms, conditions, eligibility criteria and tax implications.

Keep in mind that superannuation and tax regulations may be updated over time, and the best superannuation strategy for you may not be the best choice for someone else. Consider seeking professional financial advice before making changes to your super arrangements.

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