167
argued that low-income earners are not encouraged or incentivised to make additional contributions to their super. Industry Super Australia stresses that the regressive nature of tax on concessional contributions provides an inadequate incentive
for low-income earners to make additional contributions to their super (Campo et al.
2015). Industry Super Australia stresses that the regressive nature of tax on concessional contributions provides an inadequate incentive for low-income earners to
make additional contributions to their super (Campo et al. 2015). The Association
of Superannuation Funds (2018, p. 3) suggests that consideration should be given to
the idea of a ‘top-up’ payment or super co-contribution to incentivise low-income
earners to engage with their super. More substantially, it has been recommended
that the low income super tax offset (LISTO)
8
contribution be increased to $1000
(Scheerlinck and Webb 2017). It is estimated that increasing the LISTO contribution to $1000 would produce a 14.7% increase in superannuation balances for lowincome earners, many of whom are female. Women in Super estimate that a woman
aged 25 with a starting salary of $25,000 p.a. and a projected super balance of
$205,210 would be able to increase this projected balance through the proposed
$1000 government contribution by 14.7%. They estimate that through this scheme,
the projected retirement balance would be $235, 347 (Wood 2017).
11.4.2.2 Superannuation Payments During Parental Leave and Removal
of the $450 Threshold
Paying superannuation payments while on Commonwealth Paid Parental Leave or
employee Paid Parental Leave would assist in narrowing the gender gap in superannuation balances (Campo et al. 2015; Wood and Buckley 2015; Committee 2016;
Dyrenfurth 2018). While all employees are generally entitled to 18 weeks’
government- assisted paid parental leave, these payments do not attract superannuation. Conversely, sick leave, annual leave, and long service leave all attract super
contributions. It is estimated that paying super during government paid parental
leave would increase retirement savings by 1.7% (Campo et al. 2015). In conjunction to this, removing the $450 threshold exemption would boost the superannuation of women who work casually or part-time across different employers and jobs
(Committee 2016). Women in Super noted that there are many females working
part-time or casually across two or three different jobs, none of which allows them
to reach the $450 monthly threshold. Across the two or three distinct jobs, they may
cumulatively earn more than $450 a month, yet receive no super contributions from
any employer (Committee 2016). Campo et al. (2015) estimate that 250,000 individuals are excluded from superannuation contributions due to not satisfying the
$450 threshold.
8 The low income super tax offset contribution (LISTO) provides low-income earners with an
adjusted taxable income of up to $37,000 with a contribution equal to 15% of their total concessional (pre-tax) super contributions. It is currently capped at $500; see Office (2017).
11 SDG 10 Reducing Inequalities
argued that low-income earners are not encouraged or incentivised to make additional contributions to their super. Industry Super Australia stresses that the regressive nature of tax on concessional contributions provides an inadequate incentive
for low-income earners to make additional contributions to their super (Campo et al.
2015). Industry Super Australia stresses that the regressive nature of tax on concessional contributions provides an inadequate incentive for low-income earners to
make additional contributions to their super (Campo et al. 2015). The Association
of Superannuation Funds (2018, p. 3) suggests that consideration should be given to
the idea of a ‘top-up’ payment or super co-contribution to incentivise low-income
earners to engage with their super. More substantially, it has been recommended
that the low income super tax offset (LISTO)
8
contribution be increased to $1000
(Scheerlinck and Webb 2017). It is estimated that increasing the LISTO contribution to $1000 would produce a 14.7% increase in superannuation balances for lowincome earners, many of whom are female. Women in Super estimate that a woman
aged 25 with a starting salary of $25,000 p.a. and a projected super balance of
$205,210 would be able to increase this projected balance through the proposed
$1000 government contribution by 14.7%. They estimate that through this scheme,
the projected retirement balance would be $235, 347 (Wood 2017).
11.4.2.2 Superannuation Payments During Parental Leave and Removal
of the $450 Threshold
Paying superannuation payments while on Commonwealth Paid Parental Leave or
employee Paid Parental Leave would assist in narrowing the gender gap in superannuation balances (Campo et al. 2015; Wood and Buckley 2015; Committee 2016;
Dyrenfurth 2018). While all employees are generally entitled to 18 weeks’
government- assisted paid parental leave, these payments do not attract superannuation. Conversely, sick leave, annual leave, and long service leave all attract super
contributions. It is estimated that paying super during government paid parental
leave would increase retirement savings by 1.7% (Campo et al. 2015). In conjunction to this, removing the $450 threshold exemption would boost the superannuation of women who work casually or part-time across different employers and jobs
(Committee 2016). Women in Super noted that there are many females working
part-time or casually across two or three different jobs, none of which allows them
to reach the $450 monthly threshold. Across the two or three distinct jobs, they may
cumulatively earn more than $450 a month, yet receive no super contributions from
any employer (Committee 2016). Campo et al. (2015) estimate that 250,000 individuals are excluded from superannuation contributions due to not satisfying the
$450 threshold.
8 The low income super tax offset contribution (LISTO) provides low-income earners with an
adjusted taxable income of up to $37,000 with a contribution equal to 15% of their total concessional (pre-tax) super contributions. It is currently capped at $500; see Office (2017).
11 SDG 10 Reducing Inequalities