Australians who take on unpaid roles caring for children, ageing parents and family members with disabilities should be given superannuation payments, a new actuarial analysis has suggested.
Ahead of the federal budget, a report from Mercer and Rice Warner, due to be released at the Actuaries Institute Summit on Thursday, has said that extending the 9.5 per cent superannuation guarantee to unpaid carers should be prioritised by the federal government.
The suggestion comes after warning from industry super funds that millions of Australian women, who are most likely to take on unpaid caring responsibilities, are at risk of insecure retirements and inadequate superannuation savings.
The report suggests the federal government should remove the $450 minimum monthly earning threshold for workers to receive superannuation payments. It also recommends that employers should be required to pay superannuation to employees on paid parental leave, and provide super or pension credits for carers.
David Knox, Mercer senior partner told The Sydney Morning Herald that women are over represented as unpaid carers in Australia, and they often forgo an income to care for others.
“They provide care the government would otherwise have to pay for,” Knox said. “They shouldn’t be penalised for their retirement at the same time.”
On average, women in Australia retires with almost 50 per cent less superannuation than men, and 23 per cent of women retire with no superannuation at all. Women around retirement age are also the fastest growing group of people experiencing homelessness.
Throughout their lifetime, women take on average five years out of the workforce to care for children or other family members. This can cause their superannuation savings to halt. The current superannuation system in Australia is not set up to account for career breaks for unpaid caring purposes – that is despite the fact that caring is an essential function of the overall economy.
According to Women in Super, 40 per cent of older, single, retired women live in poverty in Australia and experience economic insecurity in retirement. Meanwhile 44 per cent of women rely on their partner’s income as the main source of funds for their retirement.