A government contribution to low-earning Australians’ super balances and consideration of the gendered impact of every policy decision would lift the current dire outcomes for women in retirement, Women in Super chair Cate Wood has said.
Wood called the super system unfair and inequitable for women and said a $1000 government contribution to low-income earners would boost women’s savings, which is now almost half that of men, on average, at retirement.
“It’s about time for an active measure that boosts women’s retirement savings,” Wood said. “We think it is not unreasonable for (low-income) workers to get some government boost to their savings when at the moment in terms of our tax spend, $30 billion to 35 billion is spent on (tax concessions in super), two thirds of which go to men.
“It won’t support all women and certainly it doesn’t fix super but it will apply to women who take out time to [be carers],” she said.
Wood outlined women’s super woes at the 2018 Investment Magazine Post Retirement Conference, held in Sydney on March 20. She spoke alongside SuperEd co-founder Jeremy Duffield and LGIASuper head of advice Garnett Hollier on the topic, “Is the Super System Broken?”
Women in Super has embarked on a policy campaign in the lead up to the next federal election to ensure steps are taken to make the nation’s retirement income system more equitable.
The organisation first wants to highlight how a complex web of workforce and social trends intersect with the superannuation, housing, social security and taxation systems to heavily disadvantage most women in retirement.
“It’s very complex but clearly the wage gap is significant and most significant to women out of the workforce and not in full-time work,” Wood said. “We need super that turbo-charges, because they’re losing out on complex interest and missing out on tax concessions.”
She said two-thirds of the beneficiaries of $35 billion in super tax concessions were men and that no concessions were given to those earning less than $37,000 annually.
Women retired with super balances on average $85,000 less than men, with single older women most at risk of retiring below the poverty line, more dependent on the age pension and the fastest-growing cohort of homeless people.
A survey of the session’s audience showed 51 per cent (87 people) disagreed that the super system needed a radical change.
“From a Women in Super perspective, the big focus for three years was trying to save the low-income support contribution and reversing a tax penalty,” Wood said. “About 40 per cent of single women are living in poverty right now, one-quarter of women have balances of less than $50,000.”
A recent Per Capital report titled Not so Super, for Women: Superannuation and women’s retirement outcomes, listed many factors contributing to poor outcomes for women: an inadequate age pension, over-representation of women in lower-paid occupations, the gender pay gap, no super at low pay levels, high effective marginal tax rates, carer responsibilities, unpaid domestic work, the complexity of the super system and frequency of changes to it, age discrimination, unaffordable housing, longer lives, poor financial literacy, cost and availability of childcare, relationship breakdowns and casualised work.
A survey of the session’s audience showed 51 per cent (87 people) disagreed that the super system needed a radical change.
