Super in PPL needed, says FPA
The Financial Planning Association (FPA) has called for the introduction of the superannuation component of the Paid Parental Leave (PPL) scheme, after being delayed since 2009.
The call, made through its submission to the economic inquiry into women's retirement to help close the gender gap, said now was the time.
The submission said the Productivity Commission in 2009 for the PPL scheme recommended that employers provide super contributions for employees.
"At that time, it was estimated that this component of the Productivity Commission's recommendations would have a net cost of $70 million to the economy, as 79 per cent of women eligible for the PPL would be eligible for the super contribution component," the submission said.
"However, the Productivity Commission recommended that this component of the PPL be delayed three years until after a review."
The FPA proposed to limit financial impacts on businesses by:
- Applying the contribution rate to the lower of the employee's actual pre-wages of the minimum weekly wage;
- Limiting the mandated superannuation contributions rate to the statutory rate; and
- Restricting superannuation contributions to employees who:
- Passed the eligibility requirements for PPL, including the work test;
- Received superannuation entitlements before going on paid leave; and
- Were eligible for unpaid parental leave.
The FPA also recommended that super be paid on income substitutes, which should be extended to carer payment, carer allowance, carer supplement, and parenting payments.
The FPA noted it was working on a financial literacy strategy where part of it would target women.
"We believe more can be done to teach and engage with women about their finances. Most importantly, more needs to be done to reach out to women, not just make information available to women who seek it," the submission said.
"Government could usefully mobilise and co-ordinate different public and private sector stakeholders to contribute to a campaign to improve the financial literacy of women."
The FPA recommended the Government should:
- Target women specifically, taking account of the different attitudes of men and women to their financial affairs;
- Build upon successes so far;
- Provide individual face-to-face teaching and financial counselling;
- Shape teaching points to the life cycles of women;
- Engage with women in locations or organisations with which they already engage; and
- Utilise professionals, to the greatest extent possible, (such as planners) within the financial services sector to educate and counsel women.
Recommended for you
With HNW investors representing the largest market for alternative assets, Praemium and CoreData research underscores why this presents a compelling opportunity for advisers.
Having completed the successful integration of Diverger, Count has upgraded its forecast for expected synergy benefits achieved by the acquisition by a third.
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
Iress has increased its forecast adjusted EBITDA by $5 million for the 2023/24 financial year in light of the sale of its platform business to Praemium and hinted at a return to dividend payments.
