Cutting super will send the retirement balances of Gippsland women into freefall
An alarming gender super gap sees the typical Gippsland woman retire with almost $160,000 less super than men, without urgent action to arrest the slide women will keep falling further behind.
Gippsland women on the cusp of retirement have a median super balance of just $145,700 – 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 is part of the solution to fix the gender imbalance and will give women the financial 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 Gippsland women to suffer further economic insecurity.
At all ages, Gippsland women have less super than men. The gender super gap sees a sharp increase to almost 40% when Gippsland women enter their 30s, a period where many women take time out of the workforce. This gap widens to almost 60% in a women’s early 50s. Gippsland women also fall behind the state and national female median super balances.
While the gender super gap widens the government has been dragging its feet on important reforms which will improve Gippsland women’s retirement outcomes including:
· Paying super on every dollar earned, including Commonwealth paid parental leave;
· Abolishing the $450 threshold where super is not paid if you earn less than this in a month,, this outdate policy 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 Darren Chester- pocket more than 15% super on top of their parliamentary wages.