Addressing the super balance gap

Super Review explores how the industry fared in closing inequalities in superannuation.

Perhaps the biggest topic of discussion was the lack of super payments in paid parental leave, which had been extended from 18 to 26 weeks in the 2022-23 Budget.

On average, women retired with about a third less super than men and paid super on parental leave could have led to at least $14,000 more for a mother of two at retirement, according to Industry Super Australia (ISA) chief executive, Bernie Dean.

Financial Services Minister, Stephen Jones, had to defend this stance, telling the Financial Services Council (FSC) chief executive, Blake Briggs, that it was about “finding headroom” to fund it and to “watch this space.”

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However, months before the Budget announcement, Active Super announced it would pay the primary caregiver employee the equivalent of the superannuation guarantee (SG) of their salary for up to 12 months while on paid or unpaid parental leave. The fund would also extend paid parental leave by 50% from 12 weeks to 18 weeks within the first year of the child’s birth.

Another significant announcement was Women in Super’s new policy platform that had offered $1,000 superannuation payment for low-income workers until their balances reach $100,000 and a carer’s credit for people performing unpaid caring work.

There were many studies in 2022 that only emphasised the importance of such measures in addressing the gender gap. 

An Aware Super study in October found Australian women face a 168-year wait to achieve equal pay, creating a cumulative $684 billion deficit in superannuation guarantee contributions over that period.

Concerningly, the same study also found West Australian women faced the worst gender pay gap in the nation. They earned on average $471.701 less weekly for the same job. 

The Financy Women’s Index (FWX), a measure of women’s financial progress, recorded a 19-year time frame to equality in superannuation in the September quarter despite initial projections of 33 years at the start of the year.

Sadly, research found women’s health was on the decline because of having lower incomes and less superannuation than men. A Monash University-led report Women’s Health and Wellbeing Scorecard: Towards equity for women stated it would take over 200 years to reach income equity at the current rate.

As of 2020, the report noted, there was a $23,767 annual income gap between the two genders, a $44,746 super gap, and a 19 percentage point gap in full-time employment. More women experienced elevated psychological distress from financial inequity than men and this was highest in the last 20 years among women between 18-24 years old.