With the Turnbull government set to deliver the 2018-19 budget next Tuesday, 8 May, the Association of Super Funds Australia (ASFA) is calling for the financial security in retirement to be prioritised.
Arguing that the gender gap in superannuation is due to structural flaws, ASFA said the fact that women approaching retirement (between 55 and 59) had $113,380 less in super than their male counterparts’ $237,022 presented a significant challenge and meant more than 80 per cent of women would retire with insufficient funds to enjoy a comfortable retirement.
CEO Dr Martin Fahy said the gap is especially perilous for women at risk of homelessness or domestic violence.
“Homelessness Australia has identified older single women as one of the groups who are especially vulnerable to experiencing homelessness.
“Older single women may be forced out the workforce early, have insufficient superannuation to fund the cost of living and face discrimination in the housing market,” he said.
At the same time, domestic violence is the primary cause of homelessness among Australian women and children.
“While there have been positive initiatives to help economic security for women in recent years, including the government’s reforms to allow the ability to carry forward unused concessional caps and the refunding of superannuation tax for low income earners, there is more that can be done in this budget,” said Mr Fahy.
In its latest report, Women’s Economic Security in Retirement, ASFA called for policy reforms to meet the challenges posed by women’s broken working patterns due to time spent in caring roles, the gender earnings gap, the casualisation of the workforce, domestic violence and women’s longer life spans.
It made these recommendations:
1. The 9.5 per cent mandatory superannuation guarantee (SG) is applied in all instances where income is replaced, like paid parental leave, salary continuance payments and worker’s compensation.
2. The removal of the $450-a-month threshold before superannuation is paid, given the increasing casualisation of the workforce means workers with multiple casual jobs may not receive any superannuation at all.
3. Employers should be able to contribute more to women’s superannuation and not be considered to have breached anti-discrimination legislation. The association argued this would help women be self-sufficient in their longer life span.
4. Compulsory superannuation should be paid to the self-employed. ASFA said this would mean self-employed workers would not be as disadvantaged at retirement as they currently are. As it stands, the average self-employed man between 60 and 64 has $143,000 in superannuation, compared to $283,000 for their wage-earning counterparts. Self-employed women in the same bracket have just $83,000 in super, compared to the $175,000 held by female wage-earners in the same age bracket.
5. The Australian Tax Office should also have adequate systems and processes to ensure employees meet all of their superannuation obligations.
6. The superannuation guarantee should be raised from 9.5 per cent to 12 per cent as soon as possible.
7. Domestic violence should be included in early access to superannuation provisions.
8. Family law should be amended to allow people to access their superannuation entitlements, through splitting superannuation upon a divorce or separation.