Provided by The Australian Investor
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Monday 30th July 2001 |
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"The harsh reality is that women average less than 90% of men's hourly pay rate, even though their jobs are often of equivalent worth," says Philippa Smith, CEO of ASFA. "As a result of this inequity, and time taken out to raise children or work around family commitments, women are facing retirement with much less super than men."
On average, women work the full time equivalent of 20 years, compared to 38 years for men. Women live longer (to an average age of 86) and many will face retirement alone either as a result of divorce (which is increasing) or widowhood. They cannot, as they may have assumed, rely on a spouse or partner to support them.
There is also increasing evidence that when women do try to catch up, perhaps retraining or gaining a qualification and returning to work full-time in a better paid job once their children are older, their higher earnings can be penalised by the super surcharge.
Take the example of a man on average weekly earnings throughout his unbroken career and a woman who has been low paid work for the early part of her career, and a higher paid (circa $90,000 pa) job in her 50s. Both have acquired $215,000 in super benefits through differing career patterns. However, the woman will lose around $25,000 to the super surcharge despite having earned the same amount as the man during her working life.
"The super surcharge could be said to punish women returning to the workforce, or indeed anyone with an uneven pattern of earnings throughout their career, because the surcharge relates to contributions made in a particular income year, rather than the total amount of contributions made over a working life," said Ms Smith.
"The fairest way to deal with the broad range of career patterns evident today is to remove the super contribution taxes. Allowing super to be taxed only on earnings and on final benefits introduces a more level playing field," said Philippa Smith.
"The super rules need to take account of the broken work patterns now common for both women and men. Women are most behind the eight ball at this stage. We need to look at ways of helping them save for retirement."
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