Liberal Senator Jane Hume has introduced a bold plan to tackle the gender disparity in superannuation savings, with a proposal allowing couples to split their retirement funds without incurring extra tax. This initiative, aimed at closing the gender gap, focuses on providing a financial safety net for women who often face the “motherhood penalty” — a significant super imbalance caused by time taken off work to raise children.
Hume’s bill seeks to level the playing field by enabling the partner with a larger super balance to top up their spouse’s savings. It is designed to help close the retirement savings gap, which often leaves women financially vulnerable in their later years. The proposal comes at a crucial time, as the Coalition strives to address gender inequities and reconnect with female voters following its underwhelming performance in the May election.
A Simple Yet Powerful Solution to Gender Inequity
Under the proposed legislation, couples would be allowed to transfer funds from the larger superannuation balance to the smaller one without incurring extra tax. This would ensure that both partners have an equal opportunity to accumulate retirement savings, regardless of the time spent out of the workforce for caregiving.
Currently, Australian women are facing a superannuation gap of up to 47.8% compared to men, particularly in the 55-59 age group, according to the Workplace Gender Equality Agency. This gap is largely due to career breaks taken for child-rearing. Despite existing rules that allow one partner to make voluntary contributions to the other’s super, take-up has been low, with only 1.1% of people participating in 2021-22.
By allowing rollovers from one account to another, Hume’s bill aims to bridge this disparity. The proposed changes would be limited to the difference between the two super balances, up to the $2 million general transfer cap. The funds would maintain their original tax treatment, preventing any additional tax burden on the rollover process.
Empowering Couples to Plan for Retirement Together
Hume’s proposal stresses the importance of recognising the economic partnership within families. It aims to ensure that both partners can contribute equally to their retirement, regardless of who stays home to care for children. By enabling couples to balance their superannuation savings earlier in life, the bill addresses the financial inequalities that often develop due to unpaid caregiving responsibilities.
“This bill explicitly recognises the economic partnership at the heart of most families,” Hume said. “It empowers couples to plan for retirement together, allowing a more even distribution of superannuation during the accumulation phase.”
Although the bill has not yet been passed, it reflects a growing push towards reforming Australia’s superannuation system to be more inclusive and equitable. While some critics suggest that more comprehensive reforms are necessary, the proposal offers a practical step forward in addressing the superannuation gap between men and women.
