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News.com.au
27-06-2025
- Business
- News.com.au
‘Financial disadvantage': Super boost to close gender gap
Major superannuation changes are set to roll out across the country starting from July 1, set to help millions of women bridge the gender pay gap. Starting next Tuesday parents taking government-funded paid parental leave will also receive a superannuation payment. This additional payment is estimated to help the near 200,000 Australian mothers each year and narrow the gender superannuation gap by around 30 per cent. According to the ASFA a woman taking 24 weeks leave the superannuation contributions will lead to $7,200 more at the time of retirement. When the regime is extended to 26 weeks, the boost to the super balance increases to around $7,800. ASFA chief executive Mary Delahunty said this is a major win for Australian women who take time out of the paid workforce to have and raise children, and helps reduce the superannuation gender gap. 'While compulsory superannuation has been delivering on its purpose of providing a dignified retirement for most Australians, it's long been known that women are often financially disadvantaged in retirement due to time taken out of work to have and raise a family. she said. 'The introduction of superannuation payments on government paid parental leave from 1 July on will go a long way to closing the gender superannuation gap.' Australian treasurer Jim Chalmers said paying super on paid parental leave from this Tuesday is part of our efforts to ensure parents earn more, keep more of what they earn and retire with more as well. 'A sornger paid parental leave system is good for families and good for the economy as well,' he told NewsWire. 'This important change means a more dignified and secure retirement for more Australian parents and especially women.' A second change which will see nearly 14 million workers will see their superannuation guarantee increase from 11.5 to 12 per cent starting from July 1. While the changes seem small, the treasury uses an example of a 27 year old woman who has taken up a graduate position as a professional lawyer. 'During her career, she takes an extended six-year career break for the birth and care of her two children,' treasury estimates. 'Her balance will be $22,000 higher at retirement as a result of the permanent 0.5 percentage point increase in the SG rate from 11.5 to 12 per cent.' Mr Chalmers says these reforms will make a meaningful difference for millions of Australians, helping them work towards a well-deserved and dignified retirement. 'Since we've come to government, we've increased the superannuation guarantee four times, and this means an extra $98,000 at retirement for a 30 year old earning the average full-time income,' Mr Chalmers said. While the Albanese government has implemented an increase of the Superannuation guarantee from 10 to 12 per cent. It was the then Morrison government who started the changes, which saw superannuation lift from 9.5 per cent to 12, at a 0.5 per cent increment a year. The treasury department says the changes to Tuesday's superannuation guarantee will see 14 million employees have their retirement lifted. The ASFA said this increase means a median 30-year old worker making $75,000 a year will add about $20,000 to their superannuation balance by the time they retire. This $20,000 increase will mean the median 30-year old will retire with $610,000 in superannuation, above the $53,383 a year or $595,000 they would need for a comfortable retirement. ASFA says a couple requires $73,875 a year or $690,000 combined in total to live comfortably in retirement using their super plus age pension top-ups. The major caveat to these figures for singles and couples is owning your own home by retirement. The National Minimum Wage and award wages will increase by 3.5 per cent from 1 July 2025, adding $0.85 per hour to $24.95 for full time staff. Treasury estimates this change will add $75,114 over the average working life of an employee.
Perth Now
27-06-2025
- Business
- Perth Now
Major super boost for 200,000 Aussies
Major superannuation changes are set to roll out across the country starting from July 1, set to help millions of women bridge the gender pay gap. Starting next Tuesday parents taking government-funded paid parental leave will also receive a superannuation payment. This additional payment is estimated to help the near 200,000 Australian mothers each year and narrow the gender superannuation gap by around 30 per cent. According to the ASFA a woman taking 24 weeks leave the superannuation contributions will lead to $7,200 more at the time of retirement. When the regime is extended to 26 weeks, the boost to the super balance increases to around $7,800. Mothers are tipped to be among the winners when the superannuation changes come into effect on July 1. NewsWire / Nicholas Eagar Credit: NCA NewsWire ASFA chief executive Mary Delahunty said this is a major win for Australian women who take time out of the paid workforce to have and raise children, and helps reduce the superannuation gender gap. 'While compulsory superannuation has been delivering on its purpose of providing a dignified retirement for most Australians, it's long been known that women are often financially disadvantaged in retirement due to time taken out of work to have and raise a family. she said. 'The introduction of superannuation payments on government paid parental leave from 1 July on will go a long way to closing the gender superannuation gap.' Australian treasurer Jim Chalmers said paying super on paid parental leave from this Tuesday is part of our efforts to ensure parents earn more, keep more of what they earn and retire with more as well. 'A sornger paid parental leave system is good for families and good for the economy as well,' he told NewsWire. 'This important change means a more dignified and secure retirement for more Australian parents and especially women.' A second change which will see nearly 14 million workers will see their superannuation guarantee increase from 11.5 to 12 per cent starting from July 1. While the changes seem small, the treasury uses an example of a 27 year old woman who has taken up a graduate position as a professional lawyer. 'During her career, she takes an extended six-year career break for the birth and care of her two children,' treasury estimates. 'Her balance will be $22,000 higher at retirement as a result of the permanent 0.5 percentage point increase in the SG rate from 11.5 to 12 per cent.' Treasurer Chalmers said this will make a meaningful difference for Aussies. NewsWire / Martin Ollman Credit: News Corp Australia Mr Chalmers says these reforms will make a meaningful difference for millions of Australians, helping them work towards a well-deserved and dignified retirement. 'Since we've come to government, we've increased the superannuation guarantee four times, and this means an extra $98,000 at retirement for a 30 year old earning the average full-time income,' Mr Chalmers said. While the Albanese government has implemented an increase of the Superannuation guarantee from 10 to 12 per cent. It was the then Morrison government who started the changes, which saw superannuation lift from 9.5 per cent to 12, at a 0.5 per cent increment a year. The treasury department says the changes to Tuesday's superannuation guarantee will see 14 million employees have their retirement lifted. The ASFA said this increase means a median 30-year old worker making $75,000 a year will add about $20,000 to their superannuation balance by the time they retire. This $20,000 increase will mean the median 30-year old will retire with $610,000 in superannuation, above the $53,383 a year or $595,000 they would need for a comfortable retirement. ASFA says a couple requires $73,875 a year or $690,000 combined in total to live comfortably in retirement using their super plus age pension top-ups. The major caveat to these figures for singles and couples is owning your own home by retirement. The National Minimum Wage and award wages will increase by 3.5 per cent from 1 July 2025, adding $0.85 per hour to $24.95 for full time staff. Treasury estimates this change will add $75,114 over the average working life of an employee. This includes 353,000 retail industry workers, 287,000 social, community, home care and disability workers, and 234,000 hospitality worker
West Australian
27-06-2025
- Business
- West Australian
Australian superannuation investors spared as US drops Section 899 ‘revenge tax'
Australian superannuation investors have been spared from a potentially costly new tax, after the United States confirmed it will withdraw a controversial measure targeting foreign capital from Donald Trump's signature economic legislation. US Treasury Secretary Scott Bessent announced on Friday that Section 899 — dubbed the 'revenge tax' — would be removed from the President's 'Big, Beautiful Bill' following progress on a new G7 tax agreement. Treasurer Jim Chalmers welcomed news of the change, calling it a 'welcome one for Australians and for the Australian business and institutional investor community'. The legislation was framed as a retaliatory response to global minimum tax rules imposed by countries including Australia, as well as digital services taxes like Australia's News Media Bargaining Code. Under Section 899, superannuation funds were facing a rise in the rate of withholding tax from 15 to 35 per cent at a base case and as much as 50 per cent in a more severe scenario that could significantly reduce investment returns. An estimated $450 billion of Australians' cash is invested in the US. The Association of Superannuation Funds of Australia previously estimated the tax could reduce annual returns by 0.1 to 0.26 per cent, depending on how far rates were lifted — a hit that could translate to tens of billions of dollars a year. ASFA welcomed the decision to remove the measure, saying it was a positive outcome for Australian investors. In a statement, the association said the move reflected the importance of international tax stability and fair treatment of long-term institutional investors. It also acknowledged the collaborative dialogue between Australian officials and their US counterparts in helping secure the outcome. 'This is a really welcome step from the US Treasury Secretary and the superannuation sector is monitoring developments closely,' ASFA chief policy officer James Koval said. 'This section of the legislation would have changed the risk return profile of investment in the US, which would have been a poor outcome for all involved.' Mr Chalmers raised the issue directly with Mr Bessent during a phone call earlier this week, warning in public remarks that Australian investors and funds should not be unfairly treated by tax changes in the US. 'We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US,' he said after the meeting. Mr Bessent, in a series of posts on X (formerly Twitter), said the decision followed a new joint understanding with G7 countries on the OECD global tax deal, and praised President Trump for issuing executive orders to defend US tax sovereignty. 'Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration,' Mr Bessent said. While the decision removes a key threat to superannuation earnings, it may complicate Australia's parallel efforts to hold tech giants — which pay relatively little tax on their Australian earnings — to account. Section 899 had also been positioned as a response to digital services taxes, including Australia's News Media Bargaining Code, which required Alphabet and Meta to pay local publishers for content appearing on their platforms. At its peak, the code delivered between $130 million and $200 million a year to Australian media companies. But Meta has since withdrawn from the code, and Google has said it will halt payments to 24 smaller publishers in July. The Albanese Government has flagged it is developing a new framework — referred to as a 'news bargaining incentive' — but no detail has yet been released. That proposed levy may still be in the firing line with Mr Bessent vowing to 'enact tax policies that serve the interests of American businesses and workers'. 'The Trump Administration remains vigilant against all discriminatory and extraterritorial foreign taxes applied against Americans. We will defend our tax sovereignty and resist efforts to create an unlevel playing field for our citizens and companies,' Mr Bessent posted on X. Dr Chalmers said the Government would continue to pursue efforts to fight tax minimisation. 'Australia will continue to engage constructively through the OECD on international tax rules that are fair and ensure multinationals pay their fair share in Australia. 'We'll consider the details of the G7 agreement.'
Perth Now
23-06-2025
- Business
- Perth Now
The annual amount you now need to retire — and it's not $1m
If you're hoping to draw a line under your working life come the new financial year next week — but you're yet to run the numbers on exactly how much money you're likely to splash about each year in retirement — rest easy. The Association of Superannuation Funds of Australia is still doing the heavy lifting for you and reckons a so-called 'comfortable' standard of living will now set couples in their mid-60s back $73,875 a year. For a single, the group's latest quarterly snapshot of the cost of living in retirement, released last week, is $52,383. For comparison, Centrelink's full age pension is currently $43,753 for couples and $29,024 for singles. The cost of a comfortable retirement includes top-level health insurance, fast internet and streaming services, an above-average car, regular leisure activities, occasional restaurant meals, regular wardrobe updates, home repairs or upgrades, annual domestic travel and an overseas trip every seven years. It also assumes the retirees own their own home. When viewed as a total nest egg balance, a couple hoping to live a little and aim for a comfortable retirement will need $690,000. For a single, it's $595,000. But those approaching retirement without any of these magic numbers in their nest egg shouldn't panic. The figures often work in conjunction with supplemental income through a part-pension, and financial advisers also say it's important to remember that annual spending falls as retirees get older. The annual figures are up 1.6 per cent from the March quarter as the higher cost of meat, seafood, fruit and vegetables and electricity offset a near 8 per cent fall in the price of international travel and accommodation as peak season demand waned for trips to Europe in the December holiday period. ASFA chief executive Mary Delahunty said while retirees were enjoying some relief from slowing inflation, essentials costs remained a concern. 'Australians in retirement are starting to benefit from a slowdown in inflation, but the prices of essentials are still rising,' Ms Delahunty said. 'It's a timely reminder that achieving a dignified retirement takes planning, and superannuation plays a critical role in making that possible.' A so-called modest standard of living for retirees now costs $48,184 for couples and $33,386 for singles. That means basic health insurance and limited gap payments, basic mobile, modest internet data allowance, owning a cheaper, older, more basic car, few leisure or travel activities, limited home repairs and keeping a close eye on utility costs. ASFA has been generating its Retirement Standard for two decades. In a sign of the times as homeownership becomes beyond the reach of many people, with an increasing number of Australians likely to be renting in retirement, it has now added budgets for retirees living at the modest level in private rentals to the benchmark guide. It estimates a single renter aged around 65 would need $46,663 a year, with a couple needing $64,259, to retire at a modest level. The lump sums at retirement needed are estimated to be $340,000 for a single and $385,000 for a couple. It said the budgets were significantly above what is provided by the full age pension and highlight the key role superannuation plays for retirees who rent. 'These new figures demonstrate how important it is that we build more homes in this country so Australians can buy a house or an apartment,' Ms Delahunty said.. 'They also illustrate how super can be the difference between hardship and stability later in life, especially for renters, which is why we need to keep it safe for retirement.'
The Advertiser
21-06-2025
- Business
- The Advertiser
Workers' retirement nest eggs set for super boost
Australian workers can look forward to a bigger nest egg, with an increase to the superannuation guarantee to add tens of thousands of dollars to the average super account. From July 1, employers' minimum required contribution to employees' superannuation accounts will rise from 11.5 per cent to 12 per cent. It's the latest and last in a series of incremental increases from nine per cent over more than a decade since they were legislated by the Rudd-Gillard Labor government in 2012. With the latest bump, a 30-year-old earning $60,000 would have an extra $20,000 in super by retirement, according to the Association of Superannuation Funds Australia. It will add about $300 each year to the superannuation of a worker on a $60,000 salary, or $500 for someone on a $100,000 salary. "The system foundations are cemented for young, working people to have a comfortable retirement," ASFA chief executive Mary Delahunty said. "It's a moment all Australians should be proud of." The association says the cost of a comfortable retirement increased 1.6 per cent in the past year, while the cost of a modest retirement rose 1.7 per cent. A "comfortable" retirement includes top-level health insurance, a reasonable car and leisure activities. The cost of either outcome was increasing slower than Australia's current 2.4 per cent headline inflation but retiree budgets remained under pressure from rising food, energy and health costs. Couples on average need $73,900 annually for a comfortable retirement, while most singles needed $52,300 per year, ASFA says. For a modest retirement covering the basics, couples needed $48,200 each year, singles $33,400, or for renting couples, $64,250, and $46,660 each year for singles who rent. The figures underlined the importance of increasing Australia's housing stock, Ms Delahunty said. "They also illustrate how super can be the difference between hardship and stability later in life, especially for renters." For some workers, the extra contribution will come from their existing pay package, according to CPA Australia's superannuation lead Richard Webb. "It's a good idea to check with your employer to see how they view the changes and what it means for you," he said. Workers on contracts with a total remuneration package could see a slight drop in their take-home pay, while those on award or enterprise agreements would likely receive the contribution on-top of their current pay. When compulsory superannuation was introduced in 1992 - in part to reduce government spending on the Age Pension - only one in 10 Australian retirees listed super as a source of income. Nine in 10 people between 30 and 50 now have super. Government spending on the Age Pension is projected to fall from 2.3 per cent of gross domestic product in 2020 to two per cent by 2062/63, despite a doubling of the over-65 population and a trebling of over-85s over the same period. However the super guarantee increase wouldn't help those who missed out on paid work for extended periods, Super Consumer Australia chief executive Xavier O'Halloran said. "(For) people who have caring responsibilities or who have been locked out of the unaffordable housing market ... increasing SG further won't address those inequalities," he told AAP. Mr O'Halloran said there was more that could be done to support people struggling in retirement, when a significant portion of their autumnal years' savings were made. "Right now, there are no minimum standards for retirement products like there are for MySuper," he said. "There is also no performance testing of retirement products, so super funds can still sell poor products." Australian workers can look forward to a bigger nest egg, with an increase to the superannuation guarantee to add tens of thousands of dollars to the average super account. From July 1, employers' minimum required contribution to employees' superannuation accounts will rise from 11.5 per cent to 12 per cent. It's the latest and last in a series of incremental increases from nine per cent over more than a decade since they were legislated by the Rudd-Gillard Labor government in 2012. With the latest bump, a 30-year-old earning $60,000 would have an extra $20,000 in super by retirement, according to the Association of Superannuation Funds Australia. It will add about $300 each year to the superannuation of a worker on a $60,000 salary, or $500 for someone on a $100,000 salary. "The system foundations are cemented for young, working people to have a comfortable retirement," ASFA chief executive Mary Delahunty said. "It's a moment all Australians should be proud of." The association says the cost of a comfortable retirement increased 1.6 per cent in the past year, while the cost of a modest retirement rose 1.7 per cent. A "comfortable" retirement includes top-level health insurance, a reasonable car and leisure activities. The cost of either outcome was increasing slower than Australia's current 2.4 per cent headline inflation but retiree budgets remained under pressure from rising food, energy and health costs. Couples on average need $73,900 annually for a comfortable retirement, while most singles needed $52,300 per year, ASFA says. For a modest retirement covering the basics, couples needed $48,200 each year, singles $33,400, or for renting couples, $64,250, and $46,660 each year for singles who rent. The figures underlined the importance of increasing Australia's housing stock, Ms Delahunty said. "They also illustrate how super can be the difference between hardship and stability later in life, especially for renters." For some workers, the extra contribution will come from their existing pay package, according to CPA Australia's superannuation lead Richard Webb. "It's a good idea to check with your employer to see how they view the changes and what it means for you," he said. Workers on contracts with a total remuneration package could see a slight drop in their take-home pay, while those on award or enterprise agreements would likely receive the contribution on-top of their current pay. When compulsory superannuation was introduced in 1992 - in part to reduce government spending on the Age Pension - only one in 10 Australian retirees listed super as a source of income. Nine in 10 people between 30 and 50 now have super. Government spending on the Age Pension is projected to fall from 2.3 per cent of gross domestic product in 2020 to two per cent by 2062/63, despite a doubling of the over-65 population and a trebling of over-85s over the same period. However the super guarantee increase wouldn't help those who missed out on paid work for extended periods, Super Consumer Australia chief executive Xavier O'Halloran said. "(For) people who have caring responsibilities or who have been locked out of the unaffordable housing market ... increasing SG further won't address those inequalities," he told AAP. Mr O'Halloran said there was more that could be done to support people struggling in retirement, when a significant portion of their autumnal years' savings were made. "Right now, there are no minimum standards for retirement products like there are for MySuper," he said. "There is also no performance testing of retirement products, so super funds can still sell poor products." Australian workers can look forward to a bigger nest egg, with an increase to the superannuation guarantee to add tens of thousands of dollars to the average super account. From July 1, employers' minimum required contribution to employees' superannuation accounts will rise from 11.5 per cent to 12 per cent. It's the latest and last in a series of incremental increases from nine per cent over more than a decade since they were legislated by the Rudd-Gillard Labor government in 2012. With the latest bump, a 30-year-old earning $60,000 would have an extra $20,000 in super by retirement, according to the Association of Superannuation Funds Australia. It will add about $300 each year to the superannuation of a worker on a $60,000 salary, or $500 for someone on a $100,000 salary. "The system foundations are cemented for young, working people to have a comfortable retirement," ASFA chief executive Mary Delahunty said. "It's a moment all Australians should be proud of." The association says the cost of a comfortable retirement increased 1.6 per cent in the past year, while the cost of a modest retirement rose 1.7 per cent. A "comfortable" retirement includes top-level health insurance, a reasonable car and leisure activities. The cost of either outcome was increasing slower than Australia's current 2.4 per cent headline inflation but retiree budgets remained under pressure from rising food, energy and health costs. Couples on average need $73,900 annually for a comfortable retirement, while most singles needed $52,300 per year, ASFA says. For a modest retirement covering the basics, couples needed $48,200 each year, singles $33,400, or for renting couples, $64,250, and $46,660 each year for singles who rent. The figures underlined the importance of increasing Australia's housing stock, Ms Delahunty said. "They also illustrate how super can be the difference between hardship and stability later in life, especially for renters." For some workers, the extra contribution will come from their existing pay package, according to CPA Australia's superannuation lead Richard Webb. "It's a good idea to check with your employer to see how they view the changes and what it means for you," he said. Workers on contracts with a total remuneration package could see a slight drop in their take-home pay, while those on award or enterprise agreements would likely receive the contribution on-top of their current pay. When compulsory superannuation was introduced in 1992 - in part to reduce government spending on the Age Pension - only one in 10 Australian retirees listed super as a source of income. Nine in 10 people between 30 and 50 now have super. Government spending on the Age Pension is projected to fall from 2.3 per cent of gross domestic product in 2020 to two per cent by 2062/63, despite a doubling of the over-65 population and a trebling of over-85s over the same period. However the super guarantee increase wouldn't help those who missed out on paid work for extended periods, Super Consumer Australia chief executive Xavier O'Halloran said. "(For) people who have caring responsibilities or who have been locked out of the unaffordable housing market ... increasing SG further won't address those inequalities," he told AAP. Mr O'Halloran said there was more that could be done to support people struggling in retirement, when a significant portion of their autumnal years' savings were made. "Right now, there are no minimum standards for retirement products like there are for MySuper," he said. "There is also no performance testing of retirement products, so super funds can still sell poor products." Australian workers can look forward to a bigger nest egg, with an increase to the superannuation guarantee to add tens of thousands of dollars to the average super account. From July 1, employers' minimum required contribution to employees' superannuation accounts will rise from 11.5 per cent to 12 per cent. It's the latest and last in a series of incremental increases from nine per cent over more than a decade since they were legislated by the Rudd-Gillard Labor government in 2012. With the latest bump, a 30-year-old earning $60,000 would have an extra $20,000 in super by retirement, according to the Association of Superannuation Funds Australia. It will add about $300 each year to the superannuation of a worker on a $60,000 salary, or $500 for someone on a $100,000 salary. "The system foundations are cemented for young, working people to have a comfortable retirement," ASFA chief executive Mary Delahunty said. "It's a moment all Australians should be proud of." The association says the cost of a comfortable retirement increased 1.6 per cent in the past year, while the cost of a modest retirement rose 1.7 per cent. A "comfortable" retirement includes top-level health insurance, a reasonable car and leisure activities. The cost of either outcome was increasing slower than Australia's current 2.4 per cent headline inflation but retiree budgets remained under pressure from rising food, energy and health costs. Couples on average need $73,900 annually for a comfortable retirement, while most singles needed $52,300 per year, ASFA says. For a modest retirement covering the basics, couples needed $48,200 each year, singles $33,400, or for renting couples, $64,250, and $46,660 each year for singles who rent. The figures underlined the importance of increasing Australia's housing stock, Ms Delahunty said. "They also illustrate how super can be the difference between hardship and stability later in life, especially for renters." For some workers, the extra contribution will come from their existing pay package, according to CPA Australia's superannuation lead Richard Webb. "It's a good idea to check with your employer to see how they view the changes and what it means for you," he said. Workers on contracts with a total remuneration package could see a slight drop in their take-home pay, while those on award or enterprise agreements would likely receive the contribution on-top of their current pay. When compulsory superannuation was introduced in 1992 - in part to reduce government spending on the Age Pension - only one in 10 Australian retirees listed super as a source of income. Nine in 10 people between 30 and 50 now have super. Government spending on the Age Pension is projected to fall from 2.3 per cent of gross domestic product in 2020 to two per cent by 2062/63, despite a doubling of the over-65 population and a trebling of over-85s over the same period. However the super guarantee increase wouldn't help those who missed out on paid work for extended periods, Super Consumer Australia chief executive Xavier O'Halloran said. "(For) people who have caring responsibilities or who have been locked out of the unaffordable housing market ... increasing SG further won't address those inequalities," he told AAP. Mr O'Halloran said there was more that could be done to support people struggling in retirement, when a significant portion of their autumnal years' savings were made. "Right now, there are no minimum standards for retirement products like there are for MySuper," he said. "There is also no performance testing of retirement products, so super funds can still sell poor products."
