A husband is not a retirement plan - say what?

A new report published by the Economics References Committee has some recommendations for us regarding the economic security of women in retirement, with the provocative but poignant heading, 'A husband is not a retirement plan'. 

The list of recommendations is extensive at 19 entries, as it must be to tackle this enormous social, cultural and financial problem many women face: being poor in old age because of your gender. 

Quick facts

  • Men's superannuation balances at retirement are on average twice that of women's
  • Women are therefore at a greater risk of experiencing poverty, homelessness and housing stress, particularly single women
  • Women are more likely to work in lower-paid fields
  • Women are more likely to take breaks from paid employment to care for others
  • Women earn far less over a lifetime than men
  • Australia does not account for this different experience of work life in superannuation
  • The Australian super system favours higher income brackets and full-time workers

The recommendations

1. The committee believes a review of the Fair Work Act 2009 is in order to figure out if the Equal Remuneration Orders are effective, to help close the gender pay gap. They say the review should 'consider alternative mechanisms to allow for a less adversarial consideration of the undervaluing of women's work'. 

2. Ensure adequate support and resources for the Workplace Gender Equality Agency. 

3. To adjust the Sex Discrimination Act 1984 as per the Human Rights Commission to extend the discrimination grounding of 'family responsibilities' and include a positive duty on employers to reasonably accommodate the needs of pregnant workers or those with family responsibilities. Additionally, age discrimination against women may be addressed in future. 

4. The Government has been advised to talk to those it matters to regarding the practical concerns of working parents in strengthening the 'right to request' provisions under the Fair Work Act 2009 by removing the qualification requirements that requires 12 months continuous service, introduce a positive duty on employers to accommodate requests, and establish procedural appeals processes are in place and rules are complied with. 

5. Review effective marginal tax rates for second-earners, with specific note to women's significant workforce participation.

6. Some amendments could be made to the Paid Parental Leave Scheme, allowing for 26 weeks paid parental leave via government and employer funding arrangements. 

7. Investigate the interaction between means testing of the Age Pension and mature age workforce participation. 

8. Ensure any changes to the retirement income system are measured against the guiding principle of dignity in retirement, delivering a decent standard of living for both men and women, and taking into consideration the interrelationship between the Age Pension, the superannuation system, and private savings in terms of mature-aged workforce participation, housing, health and aged care. 

Recognising diversity in experiences and outcomes in retirement incomes is necessary, as is to adequately assess and mitigate risks for each person. Benchmarks should be implemented for retirement adequacy for future policy reforms, and make sure reforms meet objectives. 

9. The superannuation guarantee should be paid on the Paid Parental Leave Scheme and carers incomes should be examined. 

10. Objectives should be set for the superannuation system, with specific reference made to women's incomes. 

11. Super tax concessions should be re-targeted so as to ensure they are equitably distributed and help those with lower account balances to have a more comfortable retirement. 

12. Lower income earners should have their concessional super contributions not taxed at a higher rate than their ordinary income, and we should retain the Low Income Superannuation Contribution beyond 2017. 

13. Revise current scheduling for increasing the superannuation guarantee (SG) rate to 12 per cent, and increase it more gradually than planned. 

14. Amend the SG (Administration) Act 1992 to remove the exemption from paying the SG for those who earn less than $450 in a calendar month. 

15. Government policy analysis should include specific analysis that compares the impact of any proposals on both men and women, with regards to retirement policy incomes. 

16. Ensure companies are making higher superannuation payments for female employees when they wish to do so - explore options for companies to offer higher superannuation payments for women. 

17. In order to provide certainty and security for most Australians receving the Age Pension, we should abandon the proposal to increase the retirement eligibility age to 70, and commit to maintaining the current indexation methods and benchmarking for the Age Pension. 

18. Review the adequacy of the Rent Assistance program due to more people relying on it in retirement. 

19. Ensure that the policies that relate to older people renting houses are sound - safe, secure and accessible/modifiable housing is required. 

Read the full report