Why do women retire in poverty?

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In Australia, women retire with half as much superannuation as men, and considering that retirement income is one of the most important influences on quality of life, this disparity places women on the back foot, financially and socially.

In a 2014 Association of Superannuation Funds of Australia (ASFA) report, it was revealed that in 2011/2012 the average super balance for men at the time of retirement was $197,000. This figure was almost half for women, at $105,000.

While, on average, over the last 10 years super balances have increased, women still hold only 37 per cent of Australia’s total superannuation savings, compared to 63 per cent for men. However, a large majority (60 per cent) of women aged 65–69 have no superannuation at all.

A number of underlying factors contribute to the existence of this superannuation disparity. In Australia the gender pay gap is a significant factor. According to the Government’s Workplace Gender Equality Agency Report in May 2015, women earn on average $298.10 less per week than men, equaling a 17.9 per cent pay gap. Year on year, this pay gap amounts to a difference of $15,000.

Additionally, as a result of pervading stereotypes about the type of work women and men ‘should’ do, women remain the primary caregivers for family members. Women are therefore more likely than men to experience prolonged periods away from the workforce, as well as undertaking, part-time, casual and unpaid work.

In the case of acquiring more than one part-time job, women may pay a higher tax rate on second and subsequent incomes. As a result of these factors, the earning capacity and super contributions of women are severely reduced.

While these statistics reveal the economic nature of the super imbalance, the human consequences of the issue expose it as a social crisis. Despite the fact that women typically live longer than men, they often end up struggling financially throughout retirement.

A report released by Westpac in May 2015 found that a woman earning $53,700 per year would need to work until the age of 74 to retire with as much super as the average Australian man. Startling data reveal that, even if a woman works full time for 40 years at average female earnings and contributes 15 per cent to superannuation, she is highly likely to outlive her super.

The Australian Council of Social Service (ACOSS) released a report called Poverty in Australia 2014 that found that women are at a greater risk of experiencing poverty than men. Of Australians living below the poverty line (calculated at $400 per week for single adults), 53.7 per cent are women, while 46.3 per cent are men. Single mothers, single people over 65 years of age and those living in households mainly reliant on social security are particularly at risk.

So, what can be done?

Thanks to increased focus on the gender pay gap in both the political and social spheres, the superannuation disparity is now receiving more attention.

In July, the ANZ bank publicly highlighted the super issue when it announced a new policy that offered free financial advice to women who have less than $50,000 in super. The bank is also doing its part to bridge the superannuation divide by offering its female staff an additional $500 per years a contribution to their super fund. While this may seem like a small offering, it represents an enormous step in the right direction.

Politicians are also recognising the problem. In December last year, Greens MP Adam Bandt backed a bill proposed by ASFA that would allow employers to boost superannuation payments to female employees. He acknowledged that women have lower employment outcomes and wages, a higher likelihood of being in unpaid caring roles and reduced retirement income. Despite the Government’s refusal to support the bill, it represents a greater political emphasis on the issue.

Until further policies are put in place, the current ‘official’ advice given to women is to secure their super by taking it upon themselves to invest.

In addition to the phased increase in the rate of the Superannuation Guarantee Contribution to 12 per cent (by 2025) and the Low Income Superannuation Contribution (LISC), the Government’s co-contribution scheme is the main way for women to boost their super. In this scheme, the Government makes a bonus contribution for every voluntary contribution made by an individual. However, eligibility for the scheme is capped at being less than 71 years old and earning less than $50,000 per year.

While the scheme can benefit women on low incomes, it doesn’t address the superannuation crisis experienced by so many others. Additionally, the LISC payment may be phased out.

The continuing superannuation gap between women and men exemplifies the gender inequality still experienced by Australian women. While we have seen significant social and cultural shifts that have allowed women to receive many of the same benefits as men, there remains a stark contrast in the financial welfare of women in comparison to men. In order for this to be resolved, we need representative bodies to continue pushing forward official policies that ensure equal pay and higher super incomes for women.

By protecting the interests of women and men alike, we will have the best possible chance to ensure each individual can experience a dignified retirement.

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Written by ameliath


Total Comments: 42
  1. 0

    When I saw these palms-up hands I thought the article was about “refugees”.

  2. 0

    Super became compulsory during the 90’s prior to that there was none. Most women gave up full time work to look after their children and husband’s needs for a number of years. Family payments and maternity were non existent before. Women managed their households on tight budgets. Now many are caring for their elderly parents. Does that mean they deserve nothing?

    • 0

      And don’t forget Jackie, that there are many women who simply choose not to work (or don’t have to) because they are fortunate enough to be supported by their partner, even if that meant sacrifices in other areas. These women would have little or no super either.

    • 0

      Never any talk of ‘partners’ or ‘husbands’ in any of this discussion. Never any talk about women living off the effort of their partners. Never any discussion of women milking their partners when they split.
      Only ever discussion about hard lots. Look at the other side of the ledger ladies. Not real pretty in many cases.

  3. 0

    Do does no-one care about the 46.3% of those living in poverty? Could that be because they are men?

    • 0

      KSS, do you mean that the 46.3% living in poverty are all men or that the the ones who do not care about the 46.3% are men, or that the 46.3% living in poverty are men and don’t really care about themselves? Other than someone’s own photo or other graphics the silhouettes on this site are only of men, so does this means the YLC team prefers grey, faceless men, or that they have a aversion to females with or without faces and grey or not, or does it mean these could be those 46.3% who are in poverty and want to remain anonymous? Really, the choices are almost endless. Or, these could be the women without super who are posing as their husbands who don’t have super and are the 46.3% in grey, faceless poverty – ? This goes to show you how much I have to do this afternoon. Just kidding, mate, or miss…..I can’t tell from you silhouette!

    • 0

      My point Fast Eddie, was that this whole article is about poverty stricken women (53.7% of the poverty stricken) and barely a mention that an almost equal percentage of the poverty stricken i.e. 46.3% are men! No-one seems to think this is also an issue.

      That’s all.

    • 0

      Yes, I know mate, and was just pulling your leg. I have noticed over my many years that as age progresses the scales are usually tipped in the women’s favour. I just ignor the whole issue and my wife doesn’t complain that way either. We are both lucky.

    • 0

      KSS: like the ongoing lament about the glass ceiling, breast cancer, etc., etc. IT IS A GAME. Called gender warfare. I think the women might be winning as discrimination against men is rife and getting worse.

  4. 0

    What is happening with Australia? We are changing everything to suit the 1% of Muslims who get offended at the way Australia does things. (Christmas, religious holidays, Army Chaplains) and now Australian men are to be discriminated by paying them less than women.

    The reason why women get less super is because they work less paid work than men. They don’t get a lesser pay scale than men, it’s the number of hours they work. Women also have a household to maintain as well as employment and this means, at times, that they won’t work overtime. Some women also take time away from paid employment to have children and thius naturally reduces superannuation income.

    Slightly off topic but I’ve had a gutful of women screaming about pay rates and how they are downtrodden. The truth is that almost every job in Australia has the same pay scale and the main reason for less pay is less hours worked. The women who are screaming loudest compare actual pay received, not actual pay rates and, in effect, are lying.

    • 0

      You are bitter Old Man. You are partly right. But men to get higher wages in some industries but not the manufacturing industry as our current Liberal Govt saw to that. However having got that off my chest you are right women are often paid the same rates but yes they do have time off to have children ( one thing men can’t do I guess ) also it’s usually left to women to look after and care for family members when needed. Also as this current Govt is intent on Americanizing our workforce and pushing down wages and penalty rates and casualizing a great many of the workforce not to mention under employing them it’s only going to get worse.
      It’s also forgotten that some families have children with disabilities and it’s sometimes impossible for the mother to work but this is also ignored. Hence you can see through no fault of their own some women are limited in their ability to join the workforce. Why is it always expected that women be the care giver? I’m sure many would love to escape and work outside the home. But a lot of chauvinistic men expect the female to do all of the nurturing. I hope I have explained some of the main reasons women do end up with less Superannuation and Old Man I hope you will think of these reasons and don’t rant about having a gut full of women complaining of their lot in life. I’m sure as hell if men had to do what women do in and around the home they would be screaming a whole lot louder!!!!

    • 0

      Thank you Snowwhite for saying what I said but in many more words. Are you a politician by chance? If you read my last paragraph again you might note that I didn’t complain about women’s lot in life. It was not as general as that but was very specifically aimed at those women who try and tell us that they get less money than men and intimate that it’s the pay rates.

    • 0

      I don’t want to buy into the gender war but quite frankly I am sick of women, like Aboriginals, CONTINUALLY squealing about how discriminated that are. I’m surprised the pic above was not of a violin.
      Lets just leave it alone ladies and stop using the media as a medium to gain advantage. If this was not a daily event I’d have more sympathy but given that manu women have inflicted some awful financial cruelty on men as well they need to understand that this is a 2 way street.

  5. 0

    I think they have missed the point.!! Most women work in office related jobs where the pay is ok but but not high and lower down in super markets where it is lower. Some men also , so they are not going to have big super are they.? Of course they get married , have kids and no employment that’s a choice they and the husband make, my wife has always been a house wife as we agreed that her main job was to be there for our kids at all times whilst I was working. We started our own super as there was none where I worked. Now days the women are doing previous jobs held by men on mines etc, engineers etc, so their super is good. There are lots of men in low paid jobs too. The figures quoted above for super,men and women is very low and to me , and says to me they cruised through life not worrying about old age ,the old age pension will look after me.

    • 0

      Don, I like many others both male and female did not ‘cruise through life not worrying about old age’. I didn’t work 18 hour days 7 days a week because I loved working, I had to work that long just to keep a roof over my children’s heads and food on the table, there was nothing extra. Meanwhile their father went on to enjoy many relationships and spawn more children. Heck, my ‘free’ lawyer didn’t even show up for the divorce, my thinking is that he saw my husband’s high priced and very expensive lawyer and fled.

      I’m not alone in this, both males and females are suffering now because there was no super cover for their professions when they were able to work. I didn’t ‘choose’ to leave work, I was classed as ‘too disabled’ to continue, and as I could no longer get work cover because of this classification, there was no option of getting another job. No work cover insurance = NO HOPE OF EMPLOYMENT.

      I continue to strive to ‘pay back’ to the community for my disability pension by helping others, but really, I am tiring of the continual assumption that all women divorce their husbands for lucrative rewards…I know many women who are divorced, none have ‘milked’ their husband’s super, and none have had husbands who are now suffering because of the divorce.

  6. 0

    When you start talking about compulsory super to which all, that is men and women came in 1992. A 15 year at that time, is only 38 now so how do you know what there super will have achieved. (That is still 29 years away @ 67 pension age).
    Present poverty or differences in super are speclative as well.
    What are we comparing singles, married couples no children or with children, widow. Superanuation wasn’t paid to some men untill 1992 as well. As other posts stated it would be shared benefit.

    • 0

      “Poverty” is a concept and rarely applies. If you want to talk about poverty go to some African countries or even Fiji. Australia does not have poverty per se. Only people who mismanage and then cry poor.

    • 0

      Poverty is what this post about, you might be better off Directing Your Retort To The Author of the POST.

  7. 0

    People alive today, especially the retired, only had part of their working life with a superannuation plan. We are in a long transition from relying on old age pension vs relying on self funded and employer assisted with tax incentives for superannuation to be able to live in retirement.

    Women, mostly, usually, in this time period were most likely to take breaks in paid work to do important things for the family, thus they missed out even more in terms of chances to build superannuation.

    The old age pension seems to be transitioning from a planned given, accepted by society to now one of being seen as a welfare recipient. This has happened slowly, over the last 25 years or so. It is terrible to treat people poorly or talk down folks who are on the old aged pension, as during their lifetimes it was the general expectation, not a planned rort.

    Is it fair that a surviving widow generally is only able to have a fraction of her husband’s super? Who ever survives in a marriage will still have bills, rates, insurances, etc. but a reduced resource to pay for them if they did not take up paid work, or have almost no superannuation themselves.

    Now, there is big talk about changing arrangements, GST increases, increased medical costs, increases in taxes for retired people, increased costs for health care related to old age, and heaps of other increases. Folks it worked, Australians have put money into saving for their retirement. It seems to have worked so well that every dog in the pack are sniffing around to see what that can grab out of the big pie. Since we retired, salaries for paid work have increased, food costs more, medicine costs more, rates cost more, everything going costs more. The expectation is that old people will own computers, fancy phones, pay hairdressers 200. a pop, pay dr huge gaps for services. It takes a good bit of money to be retired and to eat healthy food, practice preventative health care, keep a house and a car going, not to mention staying warm in winter.

    With low interest rates, lower earnings on super funds, plus rising costs, then new taxes, it looks pretty grim going forward!

    It is true, women generally have less in superannuation, and what they can realise after losing their spouse is much less. This can mean poverty and hardship after a long life of serving others. These are real problems, as generally even in retirement it is the women who nurture the grandchildren, assist their own children in various ways, and need all kinds of paid help to keep the car and house usable. Those who start their working life with a superannuation plan will have a much better chance than the ones who got in when they were 40 years old or older. After suffering through the bungling threats re Abbot and Hocky, the oldies are feeling pretty battered and suspicious of agendas flying around at the moment.

    Life is complicated.

    • 0

      Respectfully Linda women have husbands who contribute and/ keep them. If divorced women are entitled to half of a man’s super as well as being kept like a queen if they decide to milk the system. They get handsome government handouts as well.
      Women should think about getting back to work, not holding out the hand.

    • 0

      Mick, not all women have husbands ‘who contribute and/keep them’ and not all divorced women are entitled to half of the man’s super. I have been divorced for more than 30 years, and my ex-husband because he had a high priced lawyer whilst I was forced to use a ‘free lawyer’ avoided paying anything to support his 3 children. I worked 3 part time jobs, 18 hour days 7 days a week, I certainly didn’t merely hold out my hand.
      I am not alone, there are many women like me. I’m sorry that your experience seems to be that men are ripped off by women when they divorce….it doesn’t always happen, many women are left with less than nothing and bear the burden of raising their children, whilst their ex-husbands merrily go on to create more children to abandon.

    • 0

      So very true Jezemeg8 Unfortunately when a person feels they have been hard done by, they become very one eyed. Mick is very bitter, and may have good reason.

    • 0

      Yes, Mick, some women have come out of divorce very well off, however some have not. Divorce divides up resources leaving one or both partners much less well off. Going to work would be fun for me, if I could find a job and was free to take it.

      There are women, like me, who took time out from work because the children needed a more involved parent, then once they grew up, my husband retired, then had some health problems and then a dementia diagnosis. For the last 12 years I have been home, spending time with him, helping him with these hard years. It is not an easy time and it is expensive too. I feel I can’t move him because it will confuse him, and I don’t have time to prepare to sell, don’t know where I might could go and have no time to even think of such things. I could not possibly take a job even if I could get one, and still do what is needed here from me.

      So, every situation is different. I worked when I could and could find a job. My earnings went to supplement the funds needed to raise the children. We had years of high mortgage interest. I have met women who are daughters, caring for their parents who are frail and have dementia. These people often have to leave their jobs to look after their parents. Jobs can be hard to find too.

      I have basically no superannuation. We would have been so much better off if the mandatory superannuation rules came in a little sooner for us. If I survive, the income will be much less, and it is very uncertain just now what it will actually be. Also costs are sure to be more.

      Meantime, costs go up, income stays the same, or shrinks, his small superannuation goes up and down with the market and now all this talk about suddenly receiving an aged pension or a part pension, might be considered welfare and a move to basically impoverish old people, because of a change in ideology and a lack of imagination. It has never been called welfare before in my experience. It is unwise to use this language of welfare for something that was the accepted custom in the past.
      I am the queen at my house and I have a king here with me.

      We may as a nation have to tighten our belts, yes. But it is hard to trust people who lie to you, to try and convince people from an ideology that aims to change the character of Australian life. Then we see the special arrangements for our elected representatives, health cover, retirement, and huge salaries and expense accounts. I am sure they don’t want to tighten that belt! Just a little too close to their own pockets.

      Picking on the old and the infirm while giving the most wealthy huge tax breaks seems to be not good for Australia. It is picking the low hanging fruit. It shows a lack of imagination on the part of government, as they seem helpless to figure out how to improve Australia’s prospects with an actual plan. Their plan is to cut spending. The cuts and such will likely bring on other expensive problems, it could well contract the economy, causing a downward spiral. Folks can’t spend money they don’t have.
      We have innovative people, smart people, resourceful people, and well educated, talented people who work hard in this country. All this down talking is bad. We need to be able to see the future in a positive light. We need to do the positive things to re-energize and build a future. There is so much we could be doing towards something positive.

      Old folks would not mind moving, if they had a decent place to go to.If it did not cost so much. It looks to me like folks want to box us into situations where they can get their hands on our savings and the value from the homes we live in. Where are the communities where you can buy a property without having to pay extra to get in, maintenance charges while you are there, set by money making management, and then pay a premium at the end to leave. Even reaching into the dead person’s pocket then!

      Old people need to be able to keep their money cause they might need it.
      As far as I can tell, the liberal government has been a full on disaster.

  8. 0

    Superannuation is not about what might be nice. Nor is it there to provide fairness for any who feel rightly or wrongly that they have taken on or otherwise ended up with a raw deal. Nor should it be. It is a response to the recognition that there will not be enough government funds to go around.

    It’s ‘promise’ is twofold. First, that, by saving ahead, you should be able to have access to a better income stream later in life than we as a people are able to provide you with (via government coffers.) Secondly, that we, as a people,through the saving ahead of many will then have sufficient funds to ensure that the existence of all will be satisfactorily provisioned whether or not they have been able to save ahead.

    It is preposterous that people would not be paid equally for equal work given equal capability for the ‘selling’ of their value. It is however up to the individual to arrange their life, personal and other skills so that this equality is forthcoming. It is equally preposterous that differences based upon contractual arrangements between individuals (yes, such as in marriage) should be permitted to skew these figures.

    At a general level equality is not an easy calculation. You can cover that with cheap catchcries but it doesn’t change the fact that there are many issues at play and as many ways to re-balance predicaments. We don’t have to have children. We don’t have to make the deals we do either in the workplace or at home, we are all different and females live about 5-6% longer than males leaving what happens to family income to further skew results.

    The call is to make superannuation a tool to right percieved wrongs. How many means of addressing basic needs does a society have to have? How many reasonable systems do we have to pull down to provide the extreme diversity of provsioning tactics we employ? How much individual freedom to choose what they do with their time and its product do we have to curtail? We have in place quite a good social security system. That (if it were simplified) is the only place we should address provisioning of those who do not meet a level of financial stability that we deem suitable.

    Any other input from government should simply be through encouragement, education. Skill people, build their strength and confidence, their ability to negotiate, their awareness of the responsibilities they carry; their independence; their ablility to choose.

    • 0

      I’m over it. Get a life ladies and look on the other side of the ledger!

    • 0

      Yes, clearly said. I suppose this idea looks good, for some, to boost the superannuation of women so they won’t be falling into WELFARE at the end of their lives. This is because many women do not have adequate superannuation. It does leave men in the same situation right where they are now. So, in a way, it might be just a silly idea.

      Certainly, it might not always be fair.

  9. 0

    Sorry, Old Man but you need to do a bit more research on income equality across the spectrum. In spite of all the hollering over the past 15 years there is STILL huge discrepancies between male and female wages. When a female pauses to produce children, wages and superannuation pause too.In poorly paid employment, superannuation is almost a joke and has been forced on employers by Government. Very interesting mention in the news a couple of weeks back of the percentage of employers not paying superannuation to male or female.Another moot point is how much will you need to survive in retirement. Believe me THAT is enough to scare you silly if you are an employee.

  10. 0

    I was forced to retire as ‘too disabled to work’ in the same year compulsory super began for those of us considered to be part time. After working for years doing 3 jobs, 18 hour days, six days a week and paying my full amount of tax, my ‘golden handshake’ was a whopping $1000, all of which I contributed.
    I now survive on the Disability support pension and do my best to support others in my community who are struggling.

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