A Senate inquiry into women’s retirement incomes kicks off today in Adelaide, with a range of groups calling for action.
Despite decades of compulsory superannuation, women are retiring with less than half the amount of money than men. A combination of unpaid care work, more part-time paid work and the overall pay gap mean that women’s disadvantage as they age is cumulative. This inquiry will look at the different factors that go into creating the gap, such as government policy and broader economic structures.
The 2009 Human Rights Commission inquiry into women’s retirement incomes laid out the challenges that older women face, with many ageing in poverty, particularly if they are single and renting. They found that “women who take on the responsibilities of unpaid caring and domestic work – work that delivers enormous wealth to other individuals and to the overall economy – should not be rewarded with poverty.” The report also looked at the impact of domestic violence on women, such as partners leaving them in debt, or restricting access to their finances.
Senator Jenny McAllister, who initiated the Senate inquiry, summed up how this gap widens as women get older.
Women are more likely than men to take on the responsibility of caring for a relative with a disability, their parents or, indeed, their own partner. Women are more likely to take time away from their careers to raise children. The disparity persists even in part-time work; women working part-time spend nearly twice as many hours on unpaid household and caring work as men working part-time. These responsibilities all come at a financial cost.
The current superannuation system is designed for full-time, uninterrupted employment, which ignores the amount of unpaid work that is mostly done by women, and the high percentage of women who work part-time.
At the hearing, Joyce Phillips, Chief Executive Officer at ANZ Global Wealth spoke about the practical measures ANZ is taking to address the super gap. They have initiated $500 superannuation contributions for women employees, and pay superannuation for both paid and unpaid leave. She says that when it comes to superannuation “you can see it wasn’t designed with the specific needs of women in mind.”
The inquiry heard evidence that the intersection between the tax and the superannuation system are particularly damaging for low-income workers, who are mostly women. At the same time, superannuation tax concessions disproportionally help high-income earners and are estimated to cost over $50 billion per year by 2016-17.
“Rebalancing the superannuation concessions are an essential part of any reforms to address the gap,” said Ms Robbie Campo, Deputy Chief Executive, Industry Super Australia, at the Adelaide hearing. “Three quarters of single women do not have a sufficient retirement income, and if you project forward 20 years, the picture is not improving.”
One policy that was designed to address this super gap is the low-income superannuation contribution, which puts $500 per year into superannuation accounts for people earning below $37,000, who are mostly women. A campaign, from superannuation lobby groups, is trying to stop the Federal Government from abolishing the payment, arguing that one in two working women will be affected.
The 2009 HREOC report recommended some kind of recognition of unpaid care work, through carer contributions to superannuation that reflect women’s lives more closely. The report concluded that “retirement income system should be informed by the reality of events across a woman’s lifecycle – entering the workforce, career progression, pregnancy, balancing work and caring responsibilities, violence, divorce and retirement.”
Submissions to the inquiry close on 30 October.