Time to address super disadvantage
Australia's current superannuation system disadvantages anyone leaving the workforce for an extended period, according to William Buck wealth advisory head Chris Kennedy.
Kennedy claimed that for this reason the system needed an immediate overhaul because it was most commonly women who were being affected.
"It's most commonly women who take time out of the workforce to have children and when they do return, it's often in a part-time capacity so they can balance their family responsibilities," he said.
"They're often not in a position to commit to independent superannuation savings strategies during this time, as financial pressures on the family are at their greatest."
Kennedy cited AMP Retirement Adequacy Index figures which showed that on average, super balances for females were more than 30 per cent less than males, with the greatest gap in the 50-59 age group (above 40 per cent) and with the gap widening significantly from the age of 30, when many women left the workforce to raise families.
He claimed the Government should be looking at a number of initiatives to address the problem, including providing a woman's partner with the ability to make tax-deductible contributions to the superannuation account of their wife or partner while they are on maternity leave.
"This would mean that the partner would effectively get two dips at the superannuation concessional contribution limit, with half of their contributions going to the other's account," Kennedy said.
He suggested another initiative to bridge the divide would be to provide women returning to the workforce with higher tax-deductible contribution limits to recover the ground they had lost.
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