Australian women underpaid $1.3 billion in super
A new report from Industry Super has revealed little-known law changes dating back to the 1990s that allowed employers to pay superannuation quarterly, instead of per pay cycle, caused systemic underpayments to women.
On average, women currently retire with around a third less in their super balance than men, which can be attributed to a range of factors including maternity leave, longer stints of part-time work and the gender pay gap.
Key findings of the report:
- About one in five women did not receive the full amount of super owed to them in the 2019-2020 financial year;
- One in four women aged 20-39 lost an average of $1110, while just under 40% of younger women earning less than $25,000 a year lost about $570;
- About a quarter of women in female-dominated industries like aged care and personal services are underpaid by up to $40,000 over their working lives, equivalent to about 10% of savings; and
- Increasing the frequency of super guarantee contributions would deliver an extra $8,000 at retirement to 4.2 million workers.
Organisations that choose to pay super quarterly can end up spending more over the longer term if contributions go missing, which also greatly impacts returns.
Female-dominated industries like childcare, aged care and nursing are some of the most likely to be underpaid.
The report warns even when super contributions appear on a payslip, it does not guarantee it has been paid. It argues paying contributions in line with pay cycles would make it easier for workers to track their payments, which should equal 10.5% of their salary, and at no additional cost to the federal government.
“Mandating the payment of super with wages would benefit women immediately,” the report states.
“This change could result in an additional $300 million in super contributions flowing to women over the next four years.”
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