Senator Jane Hume has said that the government is “acutely aware” of the superannuation gap for women as industry groups warn early release has left women “even further behind the eight ball”.
Speaking to the Women in Super Summit, Senator Hume said that the federal government was moving to close the superannuation gap for women and working toward a “refresh” of the 2018 Women’s Economic Security Statement that will play “an important part” in supporting women’s workforce participation in the aftermath of COVID-19.
“We know the superannuation system was not designed specifically for women… The system designed in 1992 does not account for a number of factors that contribute directly to the superannuation savings gap, namely the gender pay gap, time out of the workforce due to caring responsibilities and the decision of many to work part-time,” Ms Hume said, adding that her own experience had only highlighted the weaknesses in the system.
But the Australian Council of Trade Unions (ACTU) said that Senator Hume and the federal government “cannot be taken seriously” on economic security for women while the superannuation increase “is on the chopping block”.
“It’s time [minister] Hume makes up her mind, and if she does want to secure women’s economic future, to convince her colleagues to resist the self-serving push of the big business lobby to cut the super increase,” the ACTU said in a statement.
“Is she serious about supporting women’s retirement savings and addressing the superannuation gap between men and women, or will she sit by quietly while her government tears up the most significant increase to women’s retirement savings in a generation?”
The Australian Institute of Superannuation Trustees (AIST) has also warned that the early release scheme will only widen the superannuation gap, leaving more women in poverty through retirement.
“Women who accessed their super through the scheme – often because they had no other place to turn for financial support – are now even further behind the eight ball when it comes to retirement savings,” said AIST head of advocacy Melissa Birks.
“In normal times, the gender super gap starts to become more evident when many women take a career break to care for their first child in their 30s. Some of these women will now be saving for their retirement pretty much from scratch when they return to work.”
The AIST and Women In Super have recommended a range of measures to improve retirement outcomes for low-income women, including moving ahead with the legislated super increase and payment of super on government-paid parental leave.
“We are seeing increasing numbers of older women facing poverty in retirement,” said Cate Wood, national chair of Women in Super.
“We cannot stand by and watch more generations face the same plight. It is important that we act now to ensure that women are at the centre of any post-COVID super or other economic recovery policy measures.”