Women on maternity leave or juggling several low-paid jobs would be paid superannuation under a $400 million Labor plan to close the retirement gender gap.
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Opposition deputy leader Tanya Plibersek unveiled the policy on Wednesday, saying too many Australian women retire in poverty.
Women retire on average with $113,000 less in their superannuation than men.
“The gender pay gap and taking time out of work to have kids means that women will retire with about 40 per cent less super,” Ms Plibersek said.
Employers are currently not required to make superannuation contributions from parental leave pay.
A Labor government would add a super contribution to be paid directly to the recipient’s super fund or paid to an employer who would make the contribution.
Superannuation would also go to dads and partners under the payment scheme.
Salvation Army Ballarat team leader John Clonan said financial counselling staff had seen first hand the impact of a low superannuation balance.
“Observations from working with clients are that women tend to have significantly lower balances than men,” he said.
“Women are more likely to do a severe financial hardship early release of superannuation application than men, further eroding their balances. Often early releases are to clear debts resulting from economic abuse where debt remains in the female’s name.”
Labor will also phase out an eligibility threshold currently making it difficult for those working part time and casually to build their retirement savings. People earning less than $450 a month currently do not get any super guarantee levy.
The gender pay gap and taking time out of work to have kids means that women will retire with about 40 per cent less super.
- Tanya Plibersek, opposition deputy leader
The commitment to close the superannuation gap comes after long campaigns for change.
A McKell Institute report released in October 2017 recommended paid parental leave payments should be subject to the superannuation guarantee, as Labor has proposed, but added superannuation payments should be extended to mothers beyond the conclusion of 18 weeks paid parental leave.
It also recommended carer allowance recipients should receive a 12 per cent superannuation guarantee on their carers allowance, and the federal government should introduce a superannuation gender parity target.
On average women earn lower wages than men, are more likely to have broken work patterns due to family responsibilities and are more likely to work in occupations with lower pay than men – all contributing factors to significantly lower superannuation balances in retirement.
A majority of part time and casual workers are women, fewer women hold senior executive and board level positions and women typically retire earlier and live longer than men.
Uniting Ballarat executive officer Sean Duffy said older women, particularly those who experience domestic violence or have a low-socio economic background are a high risk group.
“You can draw the correlation to not having substantial superannuation and other investments to support them,” he said.
“We believe we are seeing a rise in the number of older women who are homeless.
We believe we are seeing a rise in the number of older women who are homeless.
“Domestic family violence is most frequent cause of homelessness in Australia with women, children and young people, according to Australian Institute of Health and Welfare 2018 data. But it is an area that requires a more detailed analysis.”
An estimated 40 per cent of older single retired women live in poverty and experience economic insecurity in retirement, according to Women in Super campaign Make Super Fair.
“These older single women are more dependent than men on the age pension and are the fastest growing cohort of homeless people in Australia,” the campaign page reads.
A Senate Inquiry into Economic Security for Women in Retirement was completed in 2015.