Working Women May Benefit from $500 Tax Cut

One of the main challenges working women face is being able to adequately prepare for their financial future.

With children and family commitments taking up large chunks of their time it is little wonder that many women find it hard to plan for retirement.

However, working women may be the first to benefit from a new superannuation initiative that is set to give low-income earners a $500 tax cut.

The bill, which was introduced to the parliament by superannuation minister Bill Shorten, will increase the compulsory pre-retirement payments from nine per cent to 12 per cent over the next eight years.

It also includes plans to use the money raised from the mining tax to cover the costs involved in abolishing voluntary superannuation contributions for those earning less than $37,000 a year.

Assistant treasurer and minister for finance Bill Shorten said yesterday (November 8th) that 3.6 million Australians are set to benefit from the tax break.

This would mean that 1.1 million New South Wales workers – many of whom reside in western Sydney – will not have to pay tax on employer, voluntary or salary sacrificed superannuation contributions.

In total, the changes are set to cost $1.9 billion, which is money that will be redirected into the pockets of low-income earners many of whom are women.

So far it is estimated that about 60 per cent of those people who would be likely to receive the tax cut are female, many of whom are working mums in part-time employment.

Women who work in the "care" industries such as childcare, nursing or teaching assistants, disability workers, as well as retail sector employees and beauticians and hairdressers.

And the federal government is convinced that the new superannuation bill that despite criticism from the opposition its proposed changes will improve the economic conditions of women around the country.

"Tony Abbott is vandalising people's bank accounts by taking away the tax advantage for the poor," he asserted.

However, it is still early stages and it is unclear whether the plans will come into effect as any changes will need to be approved by both the lower and upper house.

It would also depend on whether the government could muster the support needed to pass its mining tax – the minerals resource rent tax that is up for review early next year.

The bill comes at a time when the gap between male and female salaries is on the rise.  

Photo credit: © Jakub Jirsák – Fotolia.com