Industry Super is calling for super on parental leave and to scrap the Super Guarantee threshold to combat the gender super gap in Australia.
Through an analysis of Australian Bureau of Statistics (ABS) data, Industry Super has revealed that the super gap “emerges at 14.6 per cent at age 25-34,” and it then “peaks at the cusp of retirement with men aged 55-64 saving 47.4 per cent more.”
This drew the conclusion that even if Australia closed the gender pay gap, workforce spells and lost compound returns means that women will “continue to retire with far less super than men”.
The Industry Super ABS data analysis shows:
- The gender super gap for all fulltime workers aged 20 to 64 is 32 per cent.
- The gender pay gap for all full time workers aged 20 to 64 is 20 per cent.
- The full time worker gender pay gap increases with age, possibly reflecting continuity of employment
- The super gap gets larger from age 40, possibly reflecting women’s re-entry to the full time workforce
- The super gap for women working full time gets bigger nearer retirement, possibly reflecting the cumulative pay gap
- The super savings gap between women and men aged 25-34 on the same salary is 14.6 per cent.
- At retirement age, the super savings gap between women and men on the same salary is 47.4 per cent.
The Industry Super analysis of ABS data also highlighted that the median super balance for a 55-64 year old man was $166,339 but for a woman it was $96,011.
Further, in 2015, more than two-thirds of Australia’s 2.7 million unpaid primary carers were women (Carers Australia). The calculated replacement value of this was over $60 billion.
What can be done to close the gap?
Industry Super has proposed that the Australian government allow super on parental leave, as well as scrapping the monthly $450 Super Guarantee threshold as it “impacts hundreds of thousands of women working part time or casual”.
Industry Super Head of Consumer Advocacy, Sarah Saunders, says the findings “underscore the toll of interrupted work patterns and lost compound returns on women’s retirement savings”.
“While a woman might return to a good salary after time out to care for a child or an ageing parent, she will have little chance of ever making up the super shortfall.
“That women today face thirty years in retirement with half as much super as men – because the system doesn’t put an economic value on unpaid care – is unacceptable.
“Business and government policy must better reflect how women transition in and out of paid employment.
Examples include flexible working hours, more accessible childcare, and super on parental leave and casual or part time work.
“The super shortfall highlights the importance of ensuring that the Age Pension safety net keeps pace with living standards by continuing to link it to wages rather than CPI,” she said.
They are not the first Superannuation Association to call for the end of the Super Guarantee. In July 2017, The Indigenous Superannuation Working Group (ISWG) made the same request, as they believe the Super Guarantee threshold disadvantages low income earners, including many Aboriginal and Torres Strait Islander peoples.