The entrenched gender pay gap and resultant inequality in superannuation balances means more women than men are likely to spend their retirement in poverty, according to a government agency.
Research from the Workplace Gender Equality Agency (WGEA) shows that more elderly women than men are living in poverty in Australia and are also more likely to re-enter the workforce following retirement, often due to financial constraints.
The research also shows that women are twice as likely as men to sell their houses and move to lower-cost accommodation because of tight financial circumstances in retirement.
Poverty in today’s world is deemed as someone earning 50 per cent below the median income, says the Australian Council of Social Service (ACOSS). The University of New South Wales (UNSW) sees poverty at 60 per cent below median income, which was $51,389 in 2018-2019, according to the Australian Bureau of Statistics.
Nicola McDougall, Chair of the Property Investment Professionals of Australia, said one of the reasons for the imbalance in financial outcomes between genders is because the current superannuation framework does not account for common female experiences in the workplace.
“About one in three Australian women retire with no super. Plus, women who do manage to save may still wind up with less than half the retirement funds of their male counterparts,” she said.
“About 70 per cent of women also rely on the pension to financially survive in retirement – even though the superannuation scheme has been in place for decades now, it was not designed to accommodate women who leave the workforce to care for children, often during what would have been their peak income-earning years.”
The Federal Government is being called on by Make Super Fairer to provide women and other low income earners with an additional $1,000 contribution annually into their super, boosting their balance and helping them make up the gap.
Let’s hope, post-election, the new Government makes it happen.
