Published: 06/04/2023
Category: Member Benefits
Published: 06/04/2023
Category: Member Benefits

Industry Super Australia

Women continue to miss out on super due to time spent out of the workforce to care for children and other family members. This contributes to the gender gap, which currently sees women retiring with a third less super than men. 

Compounding this problem is the fact that young women on lower incomes are more likely to be affected by unpaid super – which is when an employer does not fulfil their legal obligation to pay super contributions to their employees.  

This deprives them of the vital early career contributions needed to build their retirement savings.  

In our newly-released report entitled “Super Solution: How payday super will benefit women in retirement”, ISA reveals the toll unpaid super takes on women. Analysis shows that: 

1. While one in five of all women were unpaid super, two in five young women (aged between 20-29) who earn less than $25,000 per annum were underpaid super.  

2. ISA cameo modelling on the impact of unpaid super in female dominated industries shows that it can result in an enrolled nurse having $44,000 less super at retirement, a personal assistant having $37,000 less super, and an aged care worker having $35,000 less super. 

A key driver of the unpaid super problem is that super payments are misaligned with wages. Changing the law to require the payment of super at the same time as wages will immediately and significantly benefit women. As much as $300 million in additional super contributions would flow to women as a result of the reduced scope for employers to dud their workers.  

Increasing the frequency of super guarantee contributions would also deliver an extra $8,000 at retirement to 4.2 million workers, many of whom are women, as investment earnings on super contributions will begin to accrue sooner. 

The case for change is clear, and widely supported. A recent UMR survey showed 79 per cent of people agree that fixing unpaid super is an important step to help women. Both the Department of the Treasury and the Australian Taxation Office have also identified this change as a simple and effective means of minimising the number of workers who are not paid the super they are owed.  

In the coming weeks, ISA will be reaching out to federal parliamentarians to brief them on the report’s findings. In the lead-up to the federal budget in May, we’ll be emphasising that this initiative is cost neutral to the Federal budget in the short-term – meaning it could be quickly enacted without having to find other budget savings. 

We’ll also explain how this change is an alternative way to protect women’s long-term economic interests while the government continues to consider the timeframe in which it will legislate the payment of super on the Commonwealth Parental Leave Pay scheme. 

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Pay super with wages – a super simple solution to help fix the gender super gap

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Pay super with wages – a super simple solution to help fix the gender super gap