New research out today from our co-founder and research partner The Australia Institute (TAI), has found that “the current superannuation scheme effectively takes the gendered income inequalities that exist during people’s working lives and magnifies them in retirement” (Prue Cameron, What’s choice got to do with it?, TAI, p1).
This means that all women, and mums in particular, will end up poorer than men in retirement as things currently stand:
* Woman who have children are significantly more disadvantaged when it comes to superannuation.
* A woman working in retail who has 2 children could miss out on up to $603,334 in superannuation at retirement compared with the average male of the same age.
* A woman who works in retail all her life, has two children and cares for her elderly parents will retire with less than half of the retirement savings of an average male of the same age.
* While the gender pay gap means all women, regardless of whether they choose to have children, retire with less super than men of the same age, The Australia Institute has found that taking time away from paid work, returning to the workforce in part-time roles and missing opportunities for promotions, all mean that women who have children are significantly more disadvantaged when it comes to super.
This is why I applaud the Australian Greens and the Coalition for including superannuation contributions as part of their Paid Parental Leave schemes. However more is needed to make super fairer. Prue Cameron, the report’s author, provides some answers in the report’s conclusion:
“A number of policy options have been proposed by various advocates to address the superannuation gender gap – notably the inclusion of superannuation contributions in the Paid Parental Leave scheme, compulsory superannuation payments (or credits) for carers and ‘top-up’ superannuation payments for part time workers. Each of these policies would go some way to compensating women for the financial cost of their motherhood and caring roles and improve their capacity to accumulate a sustainable retirement income. Ultimately, the key to the entrenched financial disadvantage of women is Australia’s significant and persistent gender wage gap. Closing this gap has everything to do with political will, financial investment in a range of policies and societal commitment to address this inequality and nothing to do with a woman’s ‘choice’”.
(Prue Cameron, What’s choice got to do with it?, TAI, p19)