Paying superannuation on payday, rather than quarterly, could support 1 million women’s retirement savings, says Industry Super Australia (ISA).
New analysis conducted by ISA found that approximately 1 million Australian women had lost more than $1.3 billion in super contributions they were owed in a year.
About a quarter of women working in industries such as childcare, aged care, hospitality, and personal services suffered super underpayments that was costing them up to $40,000 from their retirement savings.
Almost 40 per cent of women in their 20s who earnt less than $25,000 had lost an average of $570 in super each year, ISA said.
The body had previously urged for super contributions to be paid more frequently to prevent employee underpayment but had now further highlighted how this issue was disproportionately impacting women.
ISA estimated updating the law so super would be paid with one’s payslip, rather than on a quarterly basis, could minimise unpaid super by at least 15 per cent. Moreover, it would boost the retirement savings of all 4.2 million workers in Australia who were paid super quarterly.
ISA modelling found that a 30-year-old earning the age-based median wage could be $8,000 better off if super were paid each fortnight instead of each quarter, thus allowing contributions to compound for longer.
While most employers did the right thing, some exploited the “outdated laws” to cover up underpaid super.
“It is a crushing financial blow that many women — who are still retiring with a third less super than men — won’t recover from and can wipe out 10 per cent of their savings,” said ISA advocacy director, Georgia Brumby.
“Paying super on payday will help women claw back more super now, while the Government is unable to commit to other equity measures like paying super on paid parental leave.”
Industry funds such as HESTA had pushed for super to be paid on the parental leave scheme to address the “motherhood penalty”.
Brumby continued: “Aligning payment of super and wages is the right thing to do by workers, boosts Government revenue, lifts investment returns and puts all employers on a level playing field.”
Hi
Would be good to note the issue also affects males, people who don’t identify with either traditional gender, etc.
ISA looks like a special interest activist group rather than pushing for equality for all.
By just repeating their gender biased commentary you tar yourselves with the same brush.
It would also be nice if ISA had ideas to boost super for older people who were out of the workforce with babies or otherwise raising children. ISA also seems generation biased.
Thanks