As women approach retirement, a lifetime of gender inequality can often come into sharp focus. Particularly so when that focus is on superannuation.
Some of the causes of the super gender gap include:
- Unequal pay – while the increase to the national minimum wage is a step in the right direction, women in full-time work earn 8 per cent less than men and are more likely to undertake casual or part-time roles.
- Breaks from work for unpaid caring duties – As opposed to their male counterparts, women are more likely to take time off to care for a family member or to reduce their work hours due to parenting responsibilities.
- Childcare costs
- Maternity leave – the lack of superannuation paid onto maternity leave currently leaves women on the back foot when it comes to superannuation
Gender gaps can affect superannuation accounts as much as they can affect salary rates. With barriers to entering into fields, low hourly rates of pay in industries predominantly worked by women, less hours worked and more unpaid labour affecting the amount of super Australian women are retiring with, as compared to men.
This gender gap in superannuation balances can be impacted even more by women using maternity leave. With women taking their time off from work and losing out on super contributions during this period of paid parental leave, it can affect their super in the long run as it exacerbates the income and superannuation gaps that were already in effect during their employment.
It can also be exacerbated by existing salary gaps across the workforce. Despite traditionally male-dominated fields experiencing high percentages of female graduates entering the workforce, the positions that they fill are not always high-ranked, irrespective of experience.
There are three proposed measures with regard to how the superannuation gap could be addressed at a macro level. These include:
- Including superannuation guarantee contributions in the Commonwealth Paid Parental Leave scheme, as a majority of recipients are women and it is a leading cause of the gap exacerbation.
- allowing unused concessional contributions to be made for recipients of Commonwealth Paid Parental Leave without time limits is having a negative impact on women’s superannuation outcomes, so the policy needs to be changed accordingly.
- Amending the Sex Discrimination Act to ensure employers are able to make higher superannuation payments for their female employees if they wish to do so without contravening the existing legislation.
Here are some examples of ways in which women can increase their super balances to make up for any losses that may have been incurred:
- Contribution splitting – by having their spouse transfer some of their superannuation contributions over to their account, their account can be increased.
- Salary-sacrificing contributions into their super to make up for the shortfall from not working in the previous year.
If you are concerned about how your superannuation is performing or looking for more information, consulting with a professional is the best course of action.