With the super guarantee now at 12 per cent, millions of working Australians will be starting to see the higher contributions flow into their super accounts.
This increase, more than 30 years in the making, is a pivotal moment for Australia’s retirement system, and one that will have a profound effect on the lives of women in retirement.
New modelling released by HESTA reveals that for women starting their career in 2025, earning the higher rate of super for their entire working life could mean a projected retirement balance of $712,000. This is an extra $411,000 in super savings compared to the average female HESTA member modelled to retire this year.
For every dollar of retirement savings a woman who started their career nearly 50 years ago has today, someone beginning their career now could have more than double ($2.37), thanks to advocacy and improvements that have strengthened Australia’s super system over time.
These are more than numbers. Higher retirement balances represent greater choice, security, and dignity in retirement for those who often spend their working lives looking after others.
At HESTA, we’re privileged to support more than one million Australians, nearly 80 per cent of whom are women, who work predominantly in health, aged care, early childhood education and community services.
These members have been caring for our loved ones throughout their employment, often in roles that are undervalued and lower paid. And because of this, they can face unique challenges building financial security for their future.
Australia’s super system is the envy of the world, however it was not designed to take account of career breaks and part-time work, which are the reality for so many of our members, and especially women, as they care for children or family.
Despite this enormous economic contribution, these factors add up, and too many women still retire with a significant super gap at retirement – around 25 per cent less than men.
Significant steps have been taken to address longstanding inequities in the super system.
After more than a decade of advocacy from HESTA and others, super is now being paid on Commonwealth Paid Parental Leave. For too long, women have missed out on vital super contributions during periods of parental leave – well over $3 billion in super savings at retirement – that has only compounded the gender super gap.
Addressing this gap was clearly overdue, and coupled with the 12 per cent super guarantee, supports a big step forward in potential retirement outcomes for women. But there is still more work to be done to make our retirement system fairer for women and those earning lower wages.
Increasing the eligibility rules for the Low-Income Super Tax Offset to include those earning up to $45,000, and lifting the payment amount would ensure low-income earners are not disadvantaged by paying more tax on their super contributions than on their take-home pay.
Paying super on the Commonwealth Carer Payment would recognise the essential, but often unpaid, caring work that so many of our members undertake.
Indexing the Work Bonus threshold would help retirees who want to work more without affecting their Age Pension, supporting them to continue to participate in, or return to, the workforce and helping them keep pace with the rising cost of living.
These are practical, achievable reforms that would help close the gender super gap and help ensure that the benefits of a robust super system are shared more equitably.
Both the increase to 12 per cent super and introduction of super on Commonwealth Paid Parental Leave are worthy of celebration, but they should be seen as a foundation for further progress, not the end point.
At HESTA, we remain committed to advocating for a retirement system that truly works for everyone, and to supporting the people who care for our communities throughout their working lives and beyond.
Everyone deserves the opportunity to retire with confidence and dignity.
Support Women’s Agenda! We are 100% independent and women-owned. We’re covering the Federal Election from the perspective of what matters to women, and always keeping the issues that matter for women on the daily agenda. Foundation memberships are just $5 a month.
Bonus: you’ll receive our weekly editor’s wrap of the key stories to know every Saturday.