Australia is taking steps in its budget to lift retirement savings of women in a bid to address the gender pension gap.
The government will remove the A$450 ($352) per month earnings threshold before employers are forced contribute cash into their workers' retirement funds by July 2022, according to budget documents released Tuesday. Australia will also increase compulsory pension savings to 10% of a worker's wage from July 1, as previously legislated.
The plan comes as Australia's national budget targets spending to improve the financial security of women as the nation continues a fast-paced recovery since suffering its first recession in about three decades last year. The government also announced increases in childcare spending to encourage women into work.
"The government is focused on improving retirement outcomes for women by increasing superannuation coverage and making our system fairer," Jane Hume, Minister for Superannuation and Women's Economic Security, said in a statement.
Even before the pandemic ravaged Australia's economy, many women faced retiring with less savings than men, exacerbated by the gender pay gap and taking time out of the workforce to raise children. Women are entering retirement with about 28% less savings then men, while 36% of retired women rely on their partner's income to meet living costs, according to government data.
Employers currently pay 9.5% of a worker's gross salary into a retirement fund each month — but the A$450 threshold meant many low paid and casual workers missed out.
While about 200,000 women who work multiple low-paid jobs will benefit from the change, more must be done, said Martin Fahy, the chief executive of the Association of Superannuation Funds of Australia.
"Critical social policy issues arise due to women's lower super balances including poverty and homelessness in retirement," he said. "We must continue to work towards broader structural reform to close the gap and improve retirement outcomes for women."
