“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:
https://www.industrysuper.com/assets/FileDownloadCTA/How-payday-super-will-benefit-women-in-retirement.pdf
