Women and girls across Australia deserve economic security in retirement. Currently, many women do not have access to a steady income and or additional resources to support a decent standard of living until the end of their life.
Women retire with substantially less superannuation than men on average. In 2016-17, the median superannuation balance was $154,453 for men and $122,848 for women at age of retirement (60-64 years), a gap of 20.5 per cent. Women are also more likely than men to reach retirement age with no superannuation (23 per cent of women compared to 13 per cent of men). Since women typically live longer than men, women may also need to rely on their retirement savings for a longer period of time.
This lower superannuation balance is also reflected in a higher reliance on the age pension amongst women than men. In 2017-18, 69.4 per cent of women compared to 63.0 per cent of men age 65 years and over and not active in the workforce relied on government pensions and allowances.
Although this inequality in retirement savings is attributable to a number of dimensions, it has the common consequence of placing women at greater risk of poverty, homelessness and poor health in their vulnerable years. This is a statistic that deserves the attention of policy makers.
The difference in retirement savings between the genders can largely be attributed to the fact that women are more likely to work part-time or in insecure employment. They are also more likely to take time out of the workforce to undertake caring responsibilities and, even while in the workforce, typically work for a lower hourly wage.
Currently, the national gender pay gap is 13.9 per cent. This means that women - on average - are paid 13.9 per cent less than men for the same work. Therefore, women are likely to earn less than men over their working lives, contributing to women having less savings in their superannuation accounts.
It is important that elected officials advocate for the rights of women and girls to ensure they have the same opportunities as the opposite gender. Women primarily continue to take on the care giving roles within our society. Many employed as aged care workers, social workers, disability support workers and nurses. These roles give so much back to the community and therefore they should be rewarded with higher wages and more generous superannuation.
To improve women's superannuation security, it would be prudent to phase out the $450 minimum monthly income threshold for eligibility for the superannuation guarantee. This will make it easier for employers to make extra payments into a woman's superannuation fund.
Due to the economic carnage of COVID-19 over 2.4 million Australians have accessed their superannuation early. This is placing even stronger pressure on the need for reform now as there is a great risk that many women will not have enough in their super by the time they plan to retire. Additionally, COVID-19 has also had a disproportionate effect on female workers. The sectors of the economy that have been most affected by COVID-19 (retail, aged & disability care, hospitality and the arts) employ predominantly women. Research from Macquarie University has also indicated that women's over-representation in more precarious employment - especially casual employment without access to paid leave- renders them more vulnerable during the current COVID crisis. As a society, we cannot afford to fail women and girls. Failing them equals failing ourselves. We need to fix women's superannuation and guarantee an equitable retirement pathway so that the Age Pension is not their only hope. As society moves forward so must our economic and political leaders, and we must act quickly to ensure the next generation of women do not face poverty in retirement.
And the sooner superannuation is increased to 12 per cent the better for women and all Australians. The Morrison Government has been reluctant to make this change. The guarantee has been frozen at 9.5 per cent of an employee's ordinary wages since July 2014. From July 2021, it is due to incrementally increase until it reaches 12 per cent in July 2025. The Government should not use the COVID recession as an excuse to attack superannuation and delay the long overdue and much needed increase. Contrary to some critics who argue that increasing the Superannuation Guarantee leads to lower wages, available data from the ABS and the Attorney-General's Department's Workplace Agreements database indicate otherwise
Last but not least, equal pay rates between genders across the board needs greater attention than ever before, especially after the economic turmoil of the last four months. And employers must ensure both men and women have access to flexible working and parental care arrangements. Despite having no legal obligation to do so, workplaces which pay women superannuation while on parental leave, or who provide superannuation contributions in excess of the legal requirement, are also helping to curb women's income vulnerability in retirement. Access to financial planning services and improving women's financial literacy may also help to ensure women can make informed choices about their retirement savings.
- Helen Polley is a Tasmanian Labor Senator