An ISA analysis of the Australian Treasury’s data on medium super balances found this Women had lower super credit than men at every stage of life and retired with 36 percent fewer super credit than men. One in three women retired without super savings, according to a 2016 Senate report.
“Modeling based on false assumptions has real life implications. Some would like to use the results of the retirement income review to save millions who would otherwise not save enough for retirement,” said Matt Linden, vice-CEO of ISA. Regarding the discussion of whether the government will continue the promised increase in the super guarantee from 9.5 percent to 12 percent.
“That would be a terrible result as a more realistic pattern of working life shows that the current super rate is not enough for most women to finance a secure retirement.”
The mandatory super contributions from employers – the so-called super guarantee – should increase from 9.5 percent to 10 percent in July and from 12 percent by July 2025.Some complain that companies are poorly able to afford the additional costs after the economic downturn of Covid-19 could.
Experts like actuarial consultant Rice Warner believe the Super Guarantee is an essential part of improving women’s retirement income.
Rice Warner said Monday that structural changes to the Australian pension system are unlikely to address the root causes of poorer outcomes for women from Super, largely because there are ingrained differences in the work patterns of men and women, but Super could help to defuse the problem. For example, additional Super Guarantee contributions could be made for younger women that would help bridge the gender gap between retirement earnings over time, suggested Rice Warner. A government decision to pay super-guaranteed dues for full-time caregivers could also help, she added.
Women retire with less super than men. Source: Getty Images
Gemma Pinnell, director of strategic engagement at ISA, meanwhile, stressed the need to remove the $ 450 per month threshold below which employers were not required to make super contributions on behalf of employees. This threshold had an effect Women in particular because they are far more likely than men to have multiple part-time jobs and earn less than $ 450 a month with each job.
“Until we fix inequalities in the super system like the obsolete $ 450 threshold, we will continue to retire women whose bank balances are consistently lower than men,” said Pinnell.
Inequalities are unlikely to change
However, Rice Warner was pessimistic about the likelihood the government would respond to recommendations to improve women’s retirement income. The consultancy noted that the Senate Economic Reference Committee published a report on Achieving Economic Security for Retired Women four years ago that made 19 recommendations to alleviate some of the structural problems that have diminished women’s super savings. Most of these recommendations have been ignored by the coalition government, Rice Warner noted.
These reports weren’t the only ones pointing to the tougher financial situation of Australian women on International Women’s Day.
New Finder studies showed that women were not only affected by the pension system. They also spent more on similar products and had less money, despite being more responsible with their money. The research found that women had an average of $ 21,398 in savings, compared to $ 36,851 for their male counterparts, and this was significant The financial burden is higher than for men. 76 percent of respondents said they were stressed by their finances, compared with 68 percent of men.
Finder’s research found that women spent Average of $ 679 more per year than men in a range of products and services, including iIncome protection, Contraception, Feminine hygiene products and personal care products.
“Women still bear the brunt of gender premium pricing where they spend more than men on a range of products,” said Sarah Megginson, senior editor at Finder. “The fact that women earn less and still have to pay more for these basic things is amazing.”
Even Covid-19 injured women worse
Meanwhile, the Grattan Institute found that women were more affected by Covid-19 than men. Women have taken up the lion’s share of the increase in unpaid work caused by the pandemic, such as children home-schooling, possibly because they are more likely to have lost their jobs than their male counterparts. Women were also less likely to receive government assistance related to Covid-19 as JobKeeper excluded casual employees, who are usually women.
The think tank pointed to an apparent inequality in the way the male-dominated construction industry was supported during Covid-19 versus the female-dominated hospitality industry.
Between February and May 2020, the construction sector lost less than 5 percent of its working hours but received more than $ 35 billion in government support, according to the Grattan Institute. By comparison, the hospitality industry lost more than 47 percent of its working hours but received approximately $ 1.3 billion in direct government assistance.
Danielle Wood, CEO of the Grattan Institute and lead author of the study, said policymakers failed to take into account the fact that sectors that employ predominantly female workers need as much support today as sectors that employ male workers were.
“Women now make up almost half of the workforce and are predominantly employed in the industries hardest hit by government bans such as hospitality, tourism and higher education,” she said. “Australia needs a new recession book so women are not overlooked or forced to fall further behind.”
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