“Private superannuation first emerged for a small group of salaried employees in the nineteenth century and spread amongst white-collar employees. After several failed attempts at introducing national superannuation, private superannuation became more widely available in the 1970s through negotiation on its inclusion in industrial awards. This process accelerated under Productivity Award Superannuation, and subsequently under compulsory superannuation through the Superannuation Guarantee. In this way, the maturing superannuation system has become the vehicle for providing higher incomes in retirement for most Australian employees. At the same time, the age pension remains as an essential safety net income, ensuring that all Australians have security in retirement.” [Australian Dept. of Treasury, (May 2001), “Towards higher retirement incomes for Australians: a history of the Australian retirement income system since Federation”, p.1]
Here in Australia we like to think we live in an egalitarian society with a long history of social justice and income support via a universal welfare system.
We tend to forget that the national aged pension scheme began in 1901 with eligibility exclusions based on character and race.
While most people would be aware of the historical and continuing significant wage inequality between working men and women resulting in an average female base wage gap in the private sector of 16.1 per cent & in the public sector 11.2 per cent, not everyone realises that wage theft by deliberate underpayment or withholding of wages by employers has been known in Australia since the 1880s and such theft has become widespread in the last nine years. In many industries becoming systemic and normalised. Women are considered vulnerable to wage theft due to higher rates of part time work casualisation and the higher rates of casualisation in the industries in which they are employed - particularly in health care & social assistance, accommodation & food services and retail.
Additionally, few seem to recall that superannuation schemes operating in Australia were not obliged to admit working women for the first 134 years of the existence of such schemes in this country.
This following is the state of play in 2023 for females aged 15 to 65 years currently in the workforce.
As there are est.182,069 females of workforce age resident in the Northern Rivers region of New South Wales, the following might be of some interest to them.
Monash University, Women’s Health And Wellbeing Scorecard: Towards equity for women, November 2022, excerpt:
Australia ranks 1st for women’s education but 70th on women’s economic security and opportunity.
Equitable health and wellbeing of the community is a social justice issue, and is also essential for social and economic growth. Health, employment and economic resources are basic human capabilities that give individuals the freedom and capacity to participate in society. Having good health, meaningful employment and a decent level of income and wealth allows individuals to fully participate in and contribute to society.
These are also vital for economic growth. Our economy is built upon healthy and skilled people participating in the labour force, and in our society. Poor health, low income and absence from the labour force comes at enormous cost presenting a key barrier to future prosperity.
Women disproportionately have lower income, less engagement in the labour force and poorer health even in a high-income country like Australia. This inequality costs $72 billion in lost GDP just associated with women’s labour force absence in Australia alone. Removing the structural barriers that prevent equality is an urgent priority. This report confirms that progress is either not being made or is too slow with over a century needed to close gender gaps…….
Industry Super Australia, SUPER SOLUTION: How payday super will benefit women in retirement, 29 March 2023, excerpts:
New analysis from ISA reveals the toll unpaid super takes on women.
In 2019-20, one in five women were underpaid super. They missed out on a total of $1.3 billion in super guarantee contributions. Over the last seven years, this figure amounts to an eyewatering $10.8 billion.
Two in five young women (aged between 20-29) who earn less than $25,000 per annum were underpaid super.
By the time they retire, they can miss out on more than $40,000 in super savings due to these missing contributions and the lost compounded returns on those contributions.
ISA cameo modelling on the impact of unpaid super in female dominated industries shows that it can result in an enrolled nurse having $44,000 less super at retirement, a personal assistant having $37,000 less super, and an aged care worker having $35,000 less super.
A key driver of the unpaid super problem is that super payments are misaligned with wages. Mandating the payment of super with wages will benefit women immediately. This change could result in an additional $300 million in super contributions flowing to women over the next four years from better compliance activities and less scope for employers to dud their workers. Increasing the frequency of super guarantee contributions would also deliver an extra $8,000 at retirement to 4.2 million workers, many of whom are women, as investment earnings on super contributions will begin to accrue sooner…...
Under Australia’s super system, employers must comply with the super guarantee by contributing at
least 10.5 per cent of their employee’s earnings to their super fund.
Contributions must be made at least on a quarterly basis, although employers can – and many do –
choose to make contributions on behalf of their employees more frequently.
Over the last 30 years, we have built a super system that now holds around $3.4 trillion in assets.
However, the success of our system and its capacity to promote financial security and wellbeing for
workers in retirement depends on employers doing the right thing: paying super contributions for each
employee in full and on time. Unfortunately, this does not always occur.
Unpaid super affects one in five women, costing each affected worker an average of $1,300 in super
contributions each year. In 2019-20, women missed out on a total of $1.3 billion in super guarantee
contributions. Over the last seven years, this figure amounts to $10.8 billion.
By the time they retire, these women can miss out on more than $40,000 in super savings each, due to
the missing contributions and the lost compounded returns on those contributions.
For women who are underpaid super, the adverse impact on their retirement outcomes is further
exacerbated by:
factors outside the super system that contribute to the gender gap in super balances, for example, that women spend more time out of the workforce than men to care for children, are more likely than men to undertake part-time work, and earn less than men when they are working, and
persisting inequities within the super system, for example, that super is not paid on the Commonwealth Parental Leave Pay scheme.
In other words, the consequences of being underpaid super can be more acute for women, who continue to retire with a third less super than men.
This report therefore focuses on how fixing unpaid super will benefit women in retirement.
It builds on our unpaid super report released in October 2021, which examined the main causes of unpaid super and the key policy reforms that are needed to ensure workers are not deprived of their super guarantee contributions. The key policy reforms discussed in that report include:
Mandating payment of super with wages: The single most effective change would be to require employers to pay super guarantee contributions at the same time they pay employees’ salaries. This reform would address many of the causes of unpaid super, including poor business practices by employers, insolvency, and super contributions not being visible to employees. ISA analysis shows this reform is also revenue neutral over the forward estimates and would produce significant long-term fiscal savings…..
The full report can be read and downloaded at:
