The superannuation figure Australia has forgotten
Australians have been gripped by debate over whether the nation's wealthiest should be taxed more on the superannuation – but there is one big super number in the room that has barely been addressed.
By the time Australians turn 50, the average gap between a man's and a woman's superannuation balance has widened to a staggering 24 per cent.
The gap, on average more than $100,000, is more significant than the gender pay gap which the Workplace Gender Equality Agency calculates to be 13.3 per cent.
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On International Women's Day there is more talk about closing the gender pay gap and the inequities between men and women.
Women in Super CEO Jo Kowalczyk said from the day a woman starts work the superannuation pay gap begins and it is near impossible to change that.
"The gender pay gap is the big driver for the super gap," she told 9news.com.au.
"Women who take time out of the workforce to do unpaid caring means breaks in payment in their super.
"And we know the magic ingredient of super is compound interest so those breaks early on in a woman's career can have significant ramifications on their balances."
Kowalczyk said our society has changed and the way we balance out superannuation, which can be a person's biggest asset, must reflect this.
"We have a world-class system that works brilliantly for people who can work 40 years full-time uninterrupted but that isn't the world we live," she said.
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KPMG's head of super Linda Elkins said the gender equity issues women face can end up materialising in their super and therefore their retirement.
Previous government policies have also taken a toll.
The Morrison government introduced a policy during COVID-19 allowing people to withdraw up to $10,000 early from super funds – a policy treasurer Jim Chalmers has slammed as "disastrous".
But Kowalczyk said a disproportionate number of women were forced to access their super in the early release which has now left many women with very low balances.
A lack of super can have dire consequences
Older women are Australia's fastest-growing homeless population with one in six women over 55 classified as being without a home.
Although the data shows men are predominantly the group experiencing homelessness, Mission Australia said the number of women becoming vulnerable to homelessness is increasing.
A range of causes can lead to homelessness including domestic violence, relationship breakdown, financial difficulty but a big contributor can be limited superannuation.
"Older women are the fastest growing group of people who are homeless, often due to low retirement savings, superannuation and lack of home ownership, leaving them at the mercy of the soaring costs of living and totally unaffordable rental market across the country," Mission Australia's executive of practice, evidence and impact Marion Bennett said.
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"We know these factors lead older women to be more exposed to life shocks like sudden illness, job loss, domestic violence, divorce or when they are widowed.
"Far too many women in Australia are hitting retirement age without enough superannuation or a safe, secure place to call home.
"Their career advancement and pay naturally takes a hit during the years when they are raising children and this compounds throughout their working life ending in lower superannuation savings."
Bennett added for many older women compulsory superannuation measures came in too late in their working lives.
"It's vitally important that older women living in our communities have stable accommodation, hand-in-hand with access to the supports they need, so they can ensure their personal wellbeing and lead fulfilling and dignified lives," she added.
Will the government's tax cap change the super gap?
The Albanese government said from July 1 2025, Australians who have a superannuation balance over $3 million will be taxed at a concessional rate of 30 per cent, up from 15 per cent.
This will impact around 80,000 Australians.
Experts say this tax cap will open up a pot of money in the Australian super industry but what will be key is how this is distributed to address gender and wealth inequalities.
"The pot that arises out of the changes should be redistributed to the system and look at other ways to make the system fairer to women," Kowalczyk said.
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What needs to change?
Australia's superannuation is a $3.3 trillion industry and Kowalczyk says surely if that enormous amount of money is redistributed equitably, the imbalance between men and women can be tackled.
"There's enough money in the system we have to make sure it is distributed for a fairer, more equitable system," she said.
Kowalczyk proposed paying super with paid parental leave.
"It is the only form of leave that doesn't have super attached to it and it is predominantly women who are taking this time," she said.
Elkins echoed this saying caring responsibilities are the biggest driver for women having lower salaries or broken work patterns.
Kowalczyk added the gap can be even harder to breach for low-income earners and the government needs to introduce a policy to change that.
Her proposal is to have the government contribute $1000 to low-income earners' super until they reach a $100,000 balance.
"It has to be a more targeted approach for low-income earners to ensure their super balances are impacted," she said.
When women have no super balance and a low income it means adding their own contributions is near impossible.
"Women who are taking caring breaks or are in lower-paid professions are unlikely to have the discretionary savings to top up their super," she said.
"So it makes it really difficult when you have these breaks and have no savings, what can you possibly do to top up your super?"
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Education is essential but systemic change is more important
Education and awareness is another key avenue for change as Elkins said it can allow women to know what options are available to them to improve their super and understand what is going on with their account.
But it is important to note not all the responsibility can fall on individual women to fix a gap that is fundamentally systemic.
"It has to be a dual responsibility, we have to take personal responsibility to educate ourselves but there is a role of government to ensure there are quality education programs that are accessible," Elkins said.
"In the super industry, we have an obligation to make sure women do have access to the information they need to make decisions to benefit them at the same time not make them feel like it is their individual responsibility to deal with it," Kowalczyk added.
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