Yes, women retire with less than men, but boosting compulsory super won't help
- Written by Deborah Ralston, Professorial fellow, Monash University
All sorts of claims are being made following the release of the Retirement Income Review, including that it paid insufficient attention to issues of gender.
Among other things we are being told that the gap between female and male super would narrow if compulsory contributions were lifted from 9.5% to 12%.
It wouldn’t, not at all. As the review of which I was a member states, “maintaining the superannuation guarantee at 9.5% would avoid the increases in inequities associated with the superannuation guarantee rate rising to 12%”.
Since men on average earn more than women, increasing the superannuation guarantee rate would widen — rather than narrow — the retirement income gap.
By design, superannuation is a contributory scheme. That means what you get in retirement depends largely on how long you have been in the workforce and how much you have been paid.
In that respect women are at a disadvantage, firstly due to the gender pay gap.
Women get less super because they get less pay
The review points out in November 2019 the gap in total average weekly earnings was 16.9% for women and men working full-time.
The Bureau of Statistics reported in December 2020 that the pay gap had fallen to 13.4%.
While there is still a way to go, it’s an improvement.
However, the second and greater disadvantage for women is that they are far more likely to take on caring roles that lead to career breaks and part-time employment.
Some 93% of all primary carer leave is taken by women. The result is a gender pay gap of closer to 30% when part-time and full-time work are taken together.
Several things could help
- ^ review (treasury.gov.au)
- ^ 13.4% (www.abs.gov.au)
- ^ 30% (www.abs.gov.au)
- ^ The Retirement Incomes Review modelled retirement outcomes by gender. (treasury.gov.au)
- ^ five different scenarios (treasury.gov.au)
- ^ government parental leave pay (www.servicesaustralia.gov.au)
- ^ $450 per month (www.ato.gov.au)
- ^ Retirement incomes review finds problems more super won't solve (theconversation.com)
- ^ Low-Income Superannuation Tax Offset (www.ato.gov.au)
- ^ government superannuation co-contribution (www.ato.gov.au)
- ^ Division 293 tax (www.ato.gov.au)
- ^ voluntary super contributions (treasury.gov.au)
- ^ 22% (treasury.gov.au)
- ^ 30% (www.abs.gov.au)
- ^ Home ownership and super are far more entwined than you might think (theconversation.com)
- ^ 8.4% (treasury.gov.au)
- ^ 14.5% (treasury.gov.au)
Authors: Deborah Ralston, Professorial fellow, Monash University
Read more https://theconversation.com/yes-women-retire-with-less-than-men-but-boosting-compulsory-super-wont-help-157412