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Unpaid super costing women

Super gap

Women are being left behind by the super system, currently retiring with one third less super than men.

This gender super gap is being driven by pay inequity, breaks from paid employment due to caring responsibilities as well as the scourge of unpaid super.

Women missed out on $1.3 billion in super payments in 2019-20 due to employers’ failure to pay, according to a new report from Industry Super Australia (ISA).

Over the last seven years, unpaid super has cost women a staggering $10.8 billion.

ISA found young women on lower incomes were more likely to be impacted by unpaid super. Two in five women aged 20-29 earning less than $25,000 were underpaid super.

An enrolled nurse would have $44,000 less upon retirement due to the impacts of unpaid super, ISA modelling showed. For an aged care worker, the hit to her retirement balance would be $35,000 and for a personal assistant, $37,000.

Wages/super disconnect driving problem

The disconnect in the payment of wages and super, permitted under legislation, is a key driver of unpaid super.

Currently employers are only required to pay super on a quarterly basis, making it difficult for workers to track their super payments and exacerbating the problem when super is unpaid.

Many employers voluntarily pay super more frequently, but the ISA said making the payment of super at the same time as wages mandatory would provide an immediate benefit to women workers.

“This change could result in an additional $300 million in super contributions flowing to women over the next four years from better compliance activities and less scope for employers to dud their workers,” ISA said.

“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.”

Equity lens on super essential

Queensland Unions Acting General Secretary Jacqueline King said the super system was designed in the 1990s with male “breadwinners” in mind.

“The Australian super system is central to providing dignity in retirement but a failure to ensure it keeps pace with the changing nature of work has left many workers behind – and primarily women workers,” she said.

“The failure to adjust the system to address women being paid less than men, spending more time out of the paid workforce and being overrepresented in cohorts of vulnerable workers has led to today’s super gap.

“It’s time to get moving on stamping out super theft and introducing policy measures to ameliorate the super gap, such as making super payments on parental leave.

“Unions were pivotal in establishing the super system and we continue to fight to make it better.

“If employers and government do not act on addressing the super gap, they will consign a generation of working women to a poorer retirement.”

Read a copy of the ISA’s Super Solution: How payday super will benefit women in retirement report on the ISA website.