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Editorial: Mind the Gap

Aug 30, 2018, 17:18 PM by Anglicare Australia

Anglicare Australia has long been concerned about retirement incomes. Income inadequacy in older age can lead to poor health and wellbeing outcomes, including early mortality. Superannuation is a pillar of good retirement and we are concerned about the issues facing those who work in low-paid roles, including in our own sector.HESTA-1

We partner with HESTA Super Fund to raise issues on superannuation, and on this Equal Pay Day, we bring you a guest editorial from them.

Women tend to retire with just over half the super of men. HESTA is fighting to change that – and not only because 80 per cent of our members are women.

We were founded on one simple principle: your work is some of the most valuable in Australia, so your life after work should reward you for it.

But for many women across Australia, fair reward for a lifetime of work just doesn’t happen. Broken work patterns, part-time work and multiple employers…these facts of life mean women are likely to retire with less super than their male workmates. Hard to believe in 2018, and even harder to witness.

That’s why HESTA welcomed the 2016 Senate Inquiry into women's economic security in retirement – and made one of the first submissions. It outlines our vision for a better future for our members, and women across Australia.

What we’re fighting for: Super for everyone
Workers who earn less than $450 per month from one employer don’t receive any super. Guess who’s most affected by this outdated system? “The $450 threshold is one of the super system settings that perpetuates ongoing inequity,” HESTA CEO Debby Blakey says.

“Women, particularly those working in health and community services, can often work in more than one part-time role. Their salary from each employer can fall under the $450 per month super threshold, resulting in these women being totally excluded from super.”

We asked for an end to the $450 barrier - and a fair deal for low income and part time workers.

Closing the gender pay gap
The biggest reason for the super gap is the gender pay gap – which in health and community services was 27 per cent in 2017. That’s a lot less super going into women’s accounts each month than into their male colleagues’.

Add or subtract time out of the workforce to care for others, and you’re looking at more of a gulf than a gap.

HESTA-2“The super gap women experience is not due to the choices they make – the main causes are the gender pay gap that sees women earning less than their male counterparts and unpaid time out of the workforce,” Debby points out.

We want to change the super system so women can perform these roles and not be penalised when they retire. It’s another step towards equal pay.

Many women are full-time unpaid carers – missing out on super completely. We recommended the government looks at overseas systems that reward carers fairly for their essential work.

Clearing the first hurdle
The Inquiry’s findings included many of our recommendations to help improve retirement outcomes for women.

In September 2017 we were delighted to see a bill introduced into Federal Parliament to abolish the $450 super threshold, and align SG payments with wages.

Debby is urging Parliament to consider the bill, saying action is needed right now to address unpaid super and the $450 super threshold.

We’re fighting hard for your tomorrow. But here’s what you can do today.

You can top up your super. You’ve heard it all before – but we really can’t stress this enough. Super’s likely to be your second biggest investment after your home.  Adding even $5 a week could translate to a lot more in your pocket later. Take 30 seconds to see what that actually looks like.

You can consolidate your accounts. Got several funds on the go? Think about rolling them into one, so you’re not paying more fees than you need to.

And you can make a one-off payment. Tax return a bit bigger than expected? Think about putting some into super – you might miss it at first, but it could buy a lot more when you finish work.

HESTA Super Fund is a sponsor of Anglicare Australia’s upcoming national conference. Read more ideas on how to boost your super.