Double rate of concessional contributions for mums

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One of the big inequalities that Australian superannuation still has is how under-saved women are compared to men, according to AFA CEO Brad Fox. This is predominantly down to two factors; the average wage of women being lower, and taking time out of the workforce to raise children.

The Institute of Public Accountants has tried to address this issue by calling for twice the rate of concessional contributions for carers, where they have been out of the workforce for more than 18 months.

“Carers basically provide a low-cost solution to government as unpaid service providers; their service should be valued, not penalised,” said IPA chief executive officer, Andrew Conway.

“Policies that ensure carers have adequate superannuation balances on retirement are essential.”

Brad Fox isn't so sure about this approach and says the answer is simplification.

“What happens when halfway through that, or after 12 months, the caring for someone weighs you down so much that some of your family step in and gives you a six-week break – does that start the count again?

“Keep the broad rules simple. Make them easy to understand and make it attractive for people to use them to maximise their own retirement savings.”

He says advisers can encourage couples to move across 85% of their eligible earnings from the provider to the carer at the end of the financial year, but this is merely splitting the pie, rather than adding more money to super.

“If there’s anything that male or female can do, is to make sure that in their earlier adult years, they do contribute extra to super, because the multiplying effect over time for that will help extraordinarily in retirement.”