• Media statements (Media Release 19 March 2019) and the report of the Inquiry into Franking Credits (Standing Committee on Economics, 2019 p16 ) have expressed the view that refundable franking credits benefit women more than men. With respect, we do not agree with this assessment. • Security in retirement, particularly financial security, is a matter that concerns many women.
• 92% of Australians will not be affected by this policy, but 16% of Australians over the age of 65 will be affected by this policy.
• Women are more likely than men to be receiving the Age Pension. If recipients of government pensions and allowances are allowed to continue to receive franking credit surpluses, these women would not be affected by a change in the law. This excludes 320,000 individuals (28% of taxpayers directly affected) and 20,000 SMSFs (8% of funds directly affected) (PBO, 2018a).
• In respect of SMSFs, 52.6% of members of SMSFs are men compared to 47.4% of women, and they tend to be younger: 30.7% of female members are over 65 compared to 35.6% of male members of SMSFs.
• However, high balance accounts are more likely to be held by men than women with men over 65 with account balances in excess of $100,000 holding 15.5% of total superannuation holdings, compared to women over 65 holding 9.7% of total superannuation holdings. (Clare,2017).
• ATO data shows that in the 2015-16 year there were 146,516 superannuation accounts in retirement phase that had a balance in excess of $1m, and of these accounts 59% were held by males, and 40% by females.
• The ATO data further shows that of all superannuation accounts that are not yet in retirement phase and are receiving contributions, 46% of taxpayers over age 65 with a taxable income of less than $80,000 are women (ATO, 2018 Table 26).
• Women hold lower superannuation balances overall than men in both retirement and accumulation phase.
• The policy will also reduce the effectiveness of discretionary family trusts as an income splitting mechanism. Currently the franking credits can be streamed through the trust to a low income family member who is eligible to claim a refund of the surplus franking credit. There is some evidence that women receive substantial amounts of refundable franking credits though family trust distributions.
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