Cutting super will send the retirement balances of Cairns women into freefall
An alarming gender super gap sees Cairns women retire with almost $40,000 less super than men, without urgent action to arrest the slide women will keep falling further behind.
Cairns women on the cusp of retirement have a median super balance of just $155,100 – well below the $545,000 needed for a comfortable retirement.
These stark figures highlight the need to lift the super rate as legislated from 9.5% to 12%. Women on middle to low-income are the most likely to get the legislated super boost, lifting the rate will give them the power to choose how they live in retirement.
A 30-year-old woman on the median wage could have up to $85,000 less at retirement if the super rate is cut, which could cause a generation of Cairns women to suffer further economic insecurity.
While in their 20s Cairns women have slightly more super than men, but the gender super gap starts to open once women hit their 30s, when many women take time out of the workforce. The gender gap widens to a gaping hole once women are in their late 40s when median balances are 40% less than men.
While the gender super gap widens the government has been dragging its feet on important reforms which will improve Cairns women’s retirement outcomes including:
· Paying super on every dollar earnt, including Commonwealth paid parental leave;
· Abolishing the $450 threshold where super is not paid unless you earn more than that a month, this greatly impacts women as they are more likely to have multiple part-time jobs;
· Failing to enact super splitting legislation, this streamlines the process of dividing super assets when a relationship ends and allows more women to get their fair share.
A recent retirement survey, commissioned by ISA, found that on average women spend 12 years less in the full-time workforce than men, this time away from work is having a dramatic impact on their super balance.
One in three women retire with no super balance at all, according to a 2016 Senate report.
Despite the importance of lifting super to improve women’s retirement outcomes the government has said it is considering cutting super at 9.5%, even as government MPs – like Warren Entsch – pocket more than 15% super on top of their parliamentary wages.