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How to improve retirement outcomes for women

The average superannuation balance of women at retirement is about 60% of the average balance for men. According to a December 2015 ASFA research paper, for those with superannuation (excluding persons with a nil balance), the average balance for males was around $135,000, while for females it was around $83,000.

The gap is driven by a number of factors which include:

  • the lower workforce participation rate of women compared to men
  • a disproportionate representation of women in part-time and casual employment
  • the gender pay gap itself
  • interrupted working lives due to, amongst other matters, having children, and
  • the disproportionate amount of unpaid caring work undertaken.

Bleak retirement prospects

The problem is most acute for women who are way behind the level of superannuation required for a decent retirement and are currently in their early 50s with no realistic prospect of improving their super balance. The prospect for a reasonable retirement looks bleak indeed.

To add insult to injury, the age at which men and women will be able to access the age pension is progressively being increased to 67 years of age.

The consequence is that a woman now aged 60 without work will need to rely on the Newstart Allowance until she reaches the age of 67 when she may be entitled to the age pension. While men can be similarly disadvantaged, as a broad cohort, women will be in a far worse position.

Measures to address the super shortfall

To address this problem, The Tax Institute is broadly supportive of measures whereby the Federal Government would:

  • make a non-concessional co-contribution of $1,000 for all single women on a matched 2:1 basis where total assets held in superannuation in the name of the woman is less than $100,000
  • provide an opportunity for women who have had interrupted work practices to make catch up concessional contributions (a version of this will operate from 2019/20)
  • make modest changes to the anti-discrimination laws to give a clear legal basis to schemes introduced by companies to provide higher superannuation payments for female employees
  • provide for the age pension to be made available to single women who have total superannuation of less than $100,000 from the age of 60
  • provide a $1,000 per year superannuation contribution for an unpaid voluntary carer, whether male or female.

Two companies, ANZ and Rice Warner, have created schemes that are specifically targeted to benefit women. For example, ANZ’s female staff can be superannuated by the employer to the tune of an extra $500 per year in contributions. That is a step in the right direction but more needs to be done.

None of these ideas would come cheap, but the nature of the problem is acute and it should be addressed as a matter of urgency.


Bob Deutsch is Senior Tax Counsel at The Tax Institute. The Tax Institute is hosting a one-day forum in Sydney on 16 August 2017 where expert presenters will debate how to improve key areas of Australia’s tax system.

Richard Gutie
August 07, 2017

The reasons behind the female super gap as listed here are caused by different choices made by men and women, and by the fact that it is still men who are held responsible for bringing in most of the family income.

If women brought in the family income, went into areas of work that are as profitable as those chosen by men, did work that is as risky as that by men, there would be no super gap, and no gender wage gap either.

This makes the proposals listed in this article so sexist. Essentially the idea is to pay women more for the exact same work than men, to compensate them for the outcome of their own choices.

Another thing is that these proposals are gender based, not circumstance based. A women who is not looking after children gets the better deal even though she suffers no super gap, while a stay at home father who does suffer the super gap gets nothing.

A much better solution would be to 1) use the tax system to encourage couples to let fathers spend more time with their children and have the mother spend more time in the labour force; 2) make divorce outcomes more equitable.

August 06, 2017

Maybe companies could go further and continue to pay SG contributions whilst on unpaid voluntary care, whether male or female.

July 28, 2017

Why not forget about super, and experts trying to make things complicated.

A while ago I said WBC after a small crash in 2002 buy @ $12 a share.Start super and that at the same time.WBC may outperform super over a 40 yr period just by using the DRP and paying no fees.

Periods out of work or having babies can then be funded by the dividends.husbands can also help to pay off the loan.There can be many reasons for non contribution to super.Lives sometimes fall apart.

In 2002 $12k was not a lot of money,I think they fell from around $14.50 a share so say they spent $15K.At least meeting the interest payment on that loan is vitally important,and not a lot of money.

Today $30k is not a lot of money,The interest payment is still small.WBC is just an example,leave it alone for 40 yrs to compound.

Experts and think tanks seem to have no problem at all at finding as many problems as you are prepared to pay them for.


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