Yesterday, the Australia Institute published this powerful infographic. It reveals a 40 year superannuation gender gap of $114,000 that is made worse by time out to have kids.
Much of the advice online on how we fix this gap makes it our problem. We must save more now, they say. While I agree with this logical conclusion, this lets our politicians of the hook. They can and should do more. I say, lets get angry and lets get even!
This report by The Australian Local Government Women's Association (ALGWA) reveals some astonishing detail about this less talked about gender gap:
- In 2009-10, the average superannuation account balance for women was $40,475, compared to $71,645 for men*
- The average retirement payout (determined by the average balance for those aged 60 to 64) was $112,600 for women and $198,000 for men
- Men held around 63% of total superannuation account balances, compared to 37% for women.
It goes on to explain why there is there a super gap…
Statistically, Australian women earn an average of 17 per cent less than men, which sets them up for a lifetime of financial inequality worth up to
This pay gap means many women cannot accumulate as much wealth, have less choice about their lifestyles and have significantly lower superannuation balances, than men.
Many Australian women have had a career break at some stage, to care for children or to care for elderly parents, for example. So many women have not been in the work force long enough to accumulate a sizeable superannuation balance.
Calculations by financial ratings agency CANSTAR indicate that just five years out of the workforce can impact a women’s final super balance by a massive $220,000***.
The ALGA report then explains that an employee may not be covered for Superannuation Guarantee contributions (the compulsory contribution employers make on behalf of an employee) if the employee:
- earns less than $450 per month
- is over 70 years old
- is under age 18 and works 30 hours or less per week
- is paid to do domestic or private work of 30 hours or less per week.
These conditions mean that many women miss out on compulsory superannuation because they often work part time in low paying jobs.
Adding insult to injury, restrictions to making additional contributions (contribution limits) mean that women who return to the workforce after a career break are limited in the amount they can contribute to ‘catch up’ on their superannuation contributions.
* Source: The association of Superannuation Funds of australia Limited, developments in the level and distribution of retirement savings (2011) written by ross Clare, aSFa research & resource Centre at http://www.superannuation.asn.au/policy/reports
** Source: Australian Council of Trade Unions – equal pay and Better Jobs for Women Campaign 2010 at http://www.actu.org.au/Campaigns/equalpay/default.aspx from research by the national Centre for Social and economic Modelling (naTSeM), The impact of a sustained gender wage gap on the economy – report to the Office for Women, department of Families, Community Services, Housing and Indigenous affairs, September 2009 at http://www.actu.org.au/Images/dynamic/ attachments/6895/naTSeM_report.pdf
*** Source: http://au.smallbusiness.yahoo.com/a/-/16314716/wide-wealth-gender-gap-remains/
Find out more:
The Australian Local Government Women's Association (ALGWA), Secrets of the Super Gender Gap Revealed, http://www.algwa.org.au/docs/dubbo/gendergap.pdf
The Australia Institute, What Price Dignity?, https://www.tai.org.au/index.php?q=node%2F19&pubid=951&act=display