Retirement
Women starting a family benefit most from super scheme
Women are the biggest recipients of the low-income super tax offset, with the number of females eligible for the tax break increasing significantly around the time they start having children, new research has found.
Women starting a family benefit most from super scheme
Women are the biggest recipients of the low-income super tax offset, with the number of females eligible for the tax break increasing significantly around the time they start having children, new research has found.
Results of 174,000 customers data by AMP found that women between the ages of 18 and 54 are twice as likely to receive the low-income super tax offset than men.
The low-income tax offset effectively provides a tax refund for low-income earners straight into their super fund up to $500 per financial year, eligible for people earning under $37,000 or less saving into their super.
John Perri, AMP’s technical strategy manager, said the results show that the tax offset is helping Aussies on a lower income get ahead.
“We know women retire with less super than men due to a range of factors. Women are more likely than men to take time out of the workforce to care for small children and often return to part-time lower-paid roles, where they haven’t had the benefit of pay increases and promotions while they’ve been on leave.
“Although the low-income tax offset is a small amount, every little bit counts when it comes to increasing your superannuation balance.”
“Super is built on compounding interest, so the more you contribute at an early age, the more likely your balance will grow over time, subject to market fluctuations,” Mr Perri explained.
The results also revealed younger Australians on a lower income are taking advantage of the scheme.
“It’s interesting to see Generation Z are also benefiting from the low-income tax offset. These Australians have time on their side when it comes to saving into super.”
A $500 tax offset today could be worth significantly more when you consider the impact of compounding interest over the next four or five decades,” Mr Perri concluded.
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