The one thing smart women keep putting off

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I can almost see your eyes glazing over through your computer screen. Superannuation is such a beige topic! We women are too busy even to think twice about it and, anyway, it will all sort itself out in the end. But I'm here to tell you it won't, and it's time we did something about it.

Diana Olsberg, from the school of social sciences at the University of NSW, has been speaking out about superannuation discrimination for years. “Figures show that on average, women have less than half what men have," she says. "That is just a huge inequity, most particularly, I continue to argue, because women live longer.”

Part of the problem stems from linking wages to retirement savings. In Australia, employers contribute 9 per cent (soon to be 12 per cent) of our earnings to our superannuation accounts, so the less we earn, the less super we have. We tend not to be so confident about bargaining for our worth, so in the private sector we simply don't earn as much as our male counterparts.

Many of us work in lower-paying jobs, such as hospitality, nursing, retail and factory work. Universities are reporting more women are completing degrees than men, yet somehow we are still earning (and retiring with) less money than men. Olsberg points out that “a higher proportion of women are in low paid or casual jobs where many of them don't even earn enough to receive any compulsory super”.

The issue of us raising a family still tends to fall into stereotypical patterns in Australia. Elizabeth Broderick, the Sex Discrimination Commissioner, says: “Even if [a woman] is contributing to super from the first day of her first job, she's still going to be disadvantaged unless we can find some way to value unpaid caring work.”

Many women who stop paid work to have children may not even consider the loss of superannuation. Often money is short due to relying on the husband's wage as the main source of the income. Most of us, when we do return to work, go back only in a part-time or casual capacity.

Broderick says: “We don't value, in economic terms, caring work, so it sits outside the retirement income system, and I think that's a major problem, particularly for women who do 90 per cent of the childcare and 70 per cent of the unpaid work in this country.

"Say, for example, you've had your first baby. The country has basically said, 'Well you know, you're the woman, you will leave paid work to look after your child because that's what being a good mother is.' Then if you go back into paid work when your kids grow up a little, you'll probably go back into part-time work and, because of the problems of getting part-time work at your skill level, chances are you'll deskill, and because of the issues around pay inequity you're paid less.”

"The problem with the system is that it is based on occupational lifetime income,” says Olsberg. “It would be much better if we could ensure that there is accessible, good-quality, affordable childcare which will keep women in the workforce and they'll accumulate more retirement savings.”

There is also the time we give to care for elderly parents and, in some cases, disabled family members or relatives. All the while our superannuation accounts are dwindling. Olsberg says: “If women are looking after other people who are elderly, sick or disabled in some way, they are shouldering a burden for society. Otherwise, someone else would have to do it and the public purse would have to pay. So they're making sure that those people don't have to go into an institution.

"The cost of institutional care for an older or a disabled person is huge – absolutely immense – so women who are looking after people in their own home are providing an enormous service for society, and I think they should be at least assured that they're not going to suffer themselves by not having enough money to live on in their own retirement.”

So what can be done about this inequality? Olsberg and Broderick have suggestions, and it starts with the education of young women. “I often say to young women, 'even if you just put in a little amount, because of the nature of compound interest, a little amount put in regularly from your 20s or even in your 30s is much more valuable to you when you retire, than if you put in a lot of money in your 50s'.”

Broderick suggests emotional preparation. “I say to my daughter each morning, 'Repeat after mum: a man is not a financial plan. Your economic independence is largely up to you.'

"If you could drive that core message home, I think we'd be a long way towards helping women understand that yes, my financial security is up to me. That's not just about the security I have this week or next week, it's about my long-term financial security as well, because at the minute, I just don't think there's that realisation there, that when we make that choice to leave the workplace totally, when we have our first child, then I don't think at that time we think about the consequences that we may end up living in poverty later on in life.”

The problem of our having less superannuation than men is difficult and challenging. What happened to the equality promised to women in the 1970s, who are now realising they may end up living on very little in their old age? Why is it that after years of offering our time in the form of unpaid labour, supporting the country by raising the next generation, as well as helping to keep our elderly relatives from draining the public purse in a nursing home, we are being discriminated against?

“If our birthright is gender equality, why is it that so many women have their end point as poverty?” Broderick asks.

Whatever the reasons behind this discrimination, it is certain that the issue should be discussed, with possible solutions raised, because the silence so far from the Australian government has been deafening.

40 comments so far

  • A very notable omission in the statistics provided is anything that actually supports Ms Broderick's final claim that more women are ending up in poverty as a result of their reduced levels of superannuation upon retirement. If there is no data that actually supports this claim, then the entire push for increased superannuation for women is based on a strawman.

    Apart from those women who have been in the workplace since the days they were denied access to super, there is no discrimination at play.
    Those who perform paid work have a percentage of their pay deducted to contribute to their own personal super fund. Those who do not perform paid work do not have any pay to deduct from.
    I am really not sure what could possibly be a more equitable system than that, and a lot of commentators on this topic seem very short on possible solutions.

    It it actually quite depressing that Olsberg and Broderick's advice to young women of 'you are responsible for your own financial security' is something that really needed to be reiterated.
    A man is not a financial plan, but neither are government handouts.

    Commenter
    Markus
    Location
    Canberra
    Date and time
    April 19, 2013, 8:44AM
    • When the woman takes time off to have a baby and to raise the baby.. yes it's still mostly women doing this, maybe the father of the baby should pay half of his super into her super fund.

      When the woman returns to work she can contribute to her super again.

      I don't see why women should suffer less in retirement because they stay home with the child. It takes two to make a baby - two should pay

      Commenter
      society discriminates against women
      Date and time
      April 19, 2013, 11:52AM
    • Well said, @Markus. Could not agree more.

      Commenter
      Mandy
      Location
      Naremburn
      Date and time
      April 19, 2013, 12:24PM
    • sdac, the income earned by the man in your scenario is going toward supporting the family, not just himself. Should they still be together at retirement, the Super he accumulated will be no different.
      And should the family break up, the mother as the primary carer will be favoured in determining custody of the children and in the splitting of the family assets.

      Commenter
      Markus
      Location
      Canberra
      Date and time
      April 19, 2013, 1:01PM
    • @society discriminates against women
      That is not how the superannuation system works. I don't see what the problem is with the male in this scenario having a greater super balance? They are a couple. They will retire on the same money. Does it matter whose name it is under?
      If they happen to get divorced, she would end up with most of the assets including superannuation anyway.

      Commenter
      Budz
      Location
      Sydney
      Date and time
      April 19, 2013, 1:05PM
    • Seriously Markus and others.. what type of logic do you apply in your homes? The current super system is linked to occupation but not everyone can work full time or to their full potential for various reasons, caring being one of them; mismatch between skills and place of work, etc. Don't assume that at a point of divorce women will get a portion of the man's super. That's a negotiated arrangement. I certainly won't be making a claim. There is no given that in a relationship there is equal access to a partner's income, some women don't even know their rights. I support the notion that society and government calibrate the meaning of 'care' and 'work'. For women who care for frail older people as a carer or children with disability when they have no income, their roles should not be reduced or disdained. As a community worker for almost 13 years and in constant work, my super is extremely low and this is on top of have 2 degrees and doing a postgrad course. So tell me you think women should be disadvantaged...

      Commenter
      Caroline
      Location
      Carlingford
      Date and time
      April 20, 2013, 7:57AM
  • A mostly good article. In what scenarios do women actually have to live on less superannuation compared to men? I understand if they are a single parent and have to be at home to look after the kids they may not get the chance to work enough to save enough super.
    But if they are married, and they retire with their husbands, it's the total super balances that matter. And if they get divorced for instance, usually the super is split, or at least the other assets are. And then spousal maintenance is paid.

    Commenter
    Budz
    Location
    Sydney
    Date and time
    April 19, 2013, 9:07AM
    • There has never been spousal maintenance in Australia after no-fault divorce except in the rarest of circumstances.

      Commenter
      lala
      Date and time
      April 19, 2013, 10:55AM
    • yes - this is my understanding too. i think the risk for women though is when divorce occurs before the husband has accumulated sufficient wealth that when split in half will sustain the wife, who must then go back into the workforce, typically at a lower pay rate (as discussed in the article). but this must be at least partly self-regulating - the earlier in a marriage this occurs, the more time the wife has to rebuild her career.

      Commenter
      husband of the year
      Location
      melbourne
      Date and time
      April 19, 2013, 12:40PM
    • @lala:
      I guess you don't know the same men I do then. I met with a colleague only last weekend who was telling me that he ended up with much less than half the assets as she had a far lower earning capacity. It was either this option or for him to pay spousal maintenance. Same thing in the end.

      Commenter
      Budz
      Location
      Sydney
      Date and time
      April 19, 2013, 1:07PM

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