How women can “super-proof” their future

How women can challenge the superannuation pay gap

For most people, taking control of their super is something that’s most likely been on the backburner for years, but for women, it might be better to get to that sooner than later.

While most people are aware of the gender pay gap, the issue of gender gap in superannuation gets much less attention.

The average super balance for Aussies aged above 15 years old was $111,853 for men and $64,499 for women in 2015–16, a report by The Association of Superannuation Funds in Australia (ASFA) found.

And at the time of retirement (roughly between 60 and 64 years old), the average super balance was $270,710 for men and $157,050 for women.

That indicates a gender super gap of 73 per cent for average working Aussies and 42 per cent for those at retirement.

A 2015 Senate inquiry report into the economic security for women in retirement found that the lower super balance at retirement is due to:

  • Women being more likely than men to take career breaks to provide care for family without pay.
  • Women being more likely than men to work part-time, casually or flexibly while they provide unpaid care.
  • The gender pay gap, which the Senate noted to be 18.8 per cent in 2015.

For women, this all adds up, leading to lower contributions towards their superannuation.

So, what can a woman do realistically to boost their super? Here are a few points to think about:

Salary sacrificing

While you are earning income from employment, making regular voluntary contributions could be a good way to grow your super balance. These contributions will come from your pre-tax income and will be taxed at 15 per cent when it hits your super account. This is something you would need to request your employer to do and is included in the concessional contribution cap of $25,000 per financial year.

One-off super contributions

Perhaps you don’t want to make salary sacrifices that often, or your employer might not provide the option to salary sacrifice. One way to get around it is by making one-off super contributions, which come from your after-tax income.

You might also be able to claim a tax deduction for your one-off after-tax contributions. Check with your super fund to see if you are eligible. To boost your nest egg even faster, you could also consider mixing up regular sacrifices with one-off contributions, if you can afford it.

Split super contributions with your partner

When a couple has a baby, it’s common for one person – usually a woman – to either stay at home to look after the child or reduce their working hours. Meanwhile, the other usually continues to earn most, if not all of, the household income. This means the main income-earner tends to continue accumulating super while the stay-at-home partner receives less or none. The amount of super missed out could be higher if the person takes unpaid parental leave or has multiple children.

Given the different working patterns in women’s lives, some super funds, such as new player FairVine Super, allow couples to split their super payments between the two partners. This is a way to potentially balance out the disparity between a couple’s super balances over time.

Make sure you’re getting paid your super

If you earn more than $450 per month before tax, your employer must pay you super. This is 9.5 per cent of your earnings and must be paid at least four times a year.

So just because you’re working reduced hours and earning less, it doesn’t necessarily mean you miss out on super, even if you’re a casual employee or contractor. It’s important to ensure you’re getting all the super payments you’re legally entitled to.

Compare your superannuation options

If you are currently working or intending to go back to work, it pays to ensure you’re in a competitive super fund.

While there’s debate on whether it’s better to go for lower fees or higher returns, it’s generally agreed by many, including the Barefoot Investor Scott Pape, that it’s more important to choose a fund with lower fees rather than higher returns because high fees can add up over time and eat into your super balance. This could ultimately leave you with less money at retirement.

To find a more competitive superannuation, consider using RateCity’s comparison table. But it’s best to speak to a professional advisor who can give you personal advice before switching funds.

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Learn more about superannuation

What are reportable superannuation contributions?

For employees, there are two types of reportable superannuation contributions:

  • Reportable employer super contributions your employer makes for you
  • Personal deductible contributions you make for yourself

What are concessional contributions?

Concessional contributions are pre-tax payments into your superannuation account. The payments made by your employer are concessional payments. You can also make concessional contributions with a salary sacrifice.

Is superannuation taxed?

Superannuation is taxed. It is generally taxed at 15 per cent. However, if you earn less than $37,000, you will be automatically reimbursed up to $500 of the tax you paid. Also, if your income plus concessional superannuation contributions exceed $250,000, you will also be charged Division 293 tax. This is an extra 15 per cent tax on your concessional contributions or the amount above $250,000 – whichever is lesser.

What age can I withdraw my superannuation?

You can withdraw your superannuation (or at least some of it) when you reach ‘preservation age’. The preservation age is based on date of birth. Here are the six different categories:

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

When you reach preservation age, you can withdraw all your superannuation if you’re retired. If you’re still working, you can begin a ‘transition to retirement’, which allows you to withdraw 10 per cent of their superannuation each financial year.

You can also withdraw all your superannuation once you reach 65 years.

What superannuation details do I give to my employer?

When you start a job, your employer will give you what’s called a ‘superannuation standard choice form’. Here’s what you need to complete the form:

  • The name of your preferred superannuation fund
  • The fund’s address
  • The fund’s Australian business number (ABN)
  • The fund’s superannuation product identification number (SPIN)
  • The fund’s phone number
  • A letter from the fund trustee confirming that the fund is a complying fund; or written evidence from the fund stating it will accept contributions from your new employer; or details about how your employer can make contributions to the fund

You should also provide your tax file number – while it’s not a legal obligation, it will ensure your contributions will be taxed at the (lower) superannuation rate.

How does superannuation work?

Superannuation is paid by employers to employees, at least once every three months. The ‘superannuation guarantee’ is currently 9.5 per cent – which means that your employer must pay you superannuation equivalent to 9.5 per cent of your salary. The guarantee is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

Superannuation is generally taxed at 15 per cent. However, if you earn less than $37,000, you will be automatically reimbursed up to $500 of the tax you paid. Also, if your income plus concessional superannuation contributions exceed $250,000, you will also be charged Division 293 tax. This is an extra 15 per cent tax on your concessional contributions or the amount above $250,000 – whichever is lesser.

You can withdraw your superannuation when you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working


How much superannuation do I need?

According to the Association of Superannuation Funds of Australia (ASFA), here is how much you would be able to spend per week during retirement:

Lifestyle Singles Couples
Modest $465 $668
Comfortable $837 $1,150

Here is the superannuation balance you would need to fund that level of spending:

Lifestyle Singles Couples
Modest $50,000 $35,000
Comfortable $545,000 $640,000

These figures come from the March 2017 edition of the ASFA Retirement Standard.

The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.

Here is how ASFA defines retirement lifestyles:

Category Comfortable Modest Age pension
Holidays One annual holiday in Australia One or two short breaks in Australia near where you live Shorter breaks or day trips in your own city
Eating out Regularly eat out at restaurants. Good range and quality of food Infrequently eat out at restaurants. Cheaper and less food Only club special meals or inexpensive takeaway
Car Owning a reasonable car Owning an older, less reliable car No car – or, if you do, a struggle to afford the upkeep
Alcohol Bottled wine Casked wine Homebrew beer or no alcohol
Clothing Good clothes Reasonable clothes Basic clothes
Hair Regular haircuts at a good hairdresser Regular haircuts at a basic salon Less frequent haircuts or getting a friend to do it
Leisure A range of regular leisure activities One paid leisure activity, infrequently Free or low-cost leisure activities
Electronics A range of electronic equipment Not much scope to run an air conditioner Less heating in winter
Maintenance Replace kitchen and bathroom over 20 years No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom No budget to fix home problems like a leaky roof
Insurance Private health insurance Private health insurance No private health insurance

Is superannuation compulsory?

Superannuation is compulsory. Generally speaking, it can’t be touched until you’re at least 55 years old.

What happens if my employer goes out of business while still owing me superannuation?

If your employer collapses, a trustee or administrator or liquidator will be appointed to manage the company. That trustee/administrator/liquidator will be required to pay your superannuation out of company funds.

If the company doesn’t have enough funds, in some cases company directors will be required to pay your superannuation. If the directors still don’t pay, the Australian Securities & Investment Commission (ASIC) might take legal action on your behalf. However, ASIC might decline to take legal action or might be unsuccessful.

So there might be some circumstances when you don’t receive all the superannuation you’re owed.

What are my superannuation obligations if I'm an employer?

Employers are required to pay superannuation to all their staff if the staff are:

  • Over 18 and earn more than $450 before tax in a calendar month
  • Under 18, work more than 30 hours per week and earn more than $450 before tax in a calendar month

This applies even if the staff are casual employees, part-time employees, contractors (provided the contract is mainly for their labour) or temporary residents.

How do you find lost superannuation funds?

Lost superannuation refers to savings in an account that you’ve forgotten about. This can happen if you’ve opened several different accounts over the years while moving from job to job.

You can use your MyGov account to see details of all your superannuation accounts, including any you might have forgotten. Alternatively, you can fill in a ‘Searching for lost super’ form and send it to the Australian Taxation Office, which will then search on your behalf.

When did superannuation start?

Australia’s modern superannuation system – in which employers make compulsory contributions to their employees – started in 1992. However, before that, there were various restricted superannuation schemes applying to certain employees in certain industries. The very first superannuation scheme was introduced in the 19th century.

How do you claim superannuation?

There are three different ways you can claim your superannuation:

  • Lump sum
  • Account-based pension
  • Part lump sum and part account-based pension

Two rules apply if you choose to receive an account-based pension, or income stream:

  • You must receive payments at least once per year
  • You must withdraw a minimum amount per year
    • Age 55-64 = 4%
    • Age 65-74 = 5%
    • Age 75-79 = 6%
    • Age 80-84 = 7%
    • Age 85-89 = 9%
    • Age 90-94 = 11%
    • Age 95+ = 14%

If you want to work out how long your account-based pension might last, click here to access ASIC’s account-based pension calculator.

What are government co-contributions?

A government co-contribution is a bonus payment from the federal government into your superannuation account – but it comes with conditions. First, the government will only make a co-contribution if you make a personal contribution. Second, the government will only contribute a maximum of $500. Third, the government will only make co-contributions for people on low and medium incomes. The Australian Taxation Office will calculation whether you’re entitled to a government co-contribution when you lodge your tax return. The size of any co-contribution depends on the size of your personal contribution and income.