Looming crisis for older Australian women who will retire into poverty if no urgent action taken, new report finds
Women's super balances are disproportionately impacted by events later in life, a new report finds. (Getty Images: Felix Kästle/picture alliance)
In short:
Australia is facing a looming crisis of older women entering retirement in poverty, unless urgent action is taken, a new study finds.
The report says women's super balances are also disproportionately impacted by events later in life, in addition to childcare duties.
What's next?
The federal government says it is committed to closing the retirement pay gap by reforming the superannuation and taxation systems.
Australia is facing a looming crisis of older women entering retirement in poverty, unless urgent action is taken, new research from Super Members Council (SMC) has found.
While the superannuation gender gap has often been blamed on having children, the report found women's super balances are also disproportionately impacted by events later in life.
The report by Impact Economics and Policy, commissioned by SMC, also found that events such as separation, unpaid caregiving for older family members and family violence affected super balances, worsening women's economic insecurity.
This could potentially result in up to $95,000 less in super for women, the report read.
On average, women have less savings and lower income during retirement than men. (Supplied: Impact Economics and Policy, ATO)
SMC CEO Misha Schubert said the report was a wake-up call for all policymakers with its compelling insights.
"Australia has made important strides in recent years on the gaps in pay, super and workforce participation, but this research shines a spotlight on the need for further bold reforms to ensure our retirement system truly works for women — especially low-income women," Ms Schubert said.
"Without urgent action, generations of Australia's lowest-paid women risk poverty in retirement."
With rising numbers of single women above the age of 45 renting, nearly 60 per cent of older female renters already live below the poverty line, according to the council.
SMC also pointed out that policies allowing women to withdraw super early for house deposits would make them significantly poorer in retirement, with less income to live on.
Ms Schubert added that recent reforms were an important start, but a "bigger and bolder approach is needed".
From July 1, parents accessing the government-funded paid parental leave will receive an additional 12 per cent of their government payment as a contribution to their nominated super fund.
How key life events affect women's economic security
According to the report, a woman's financial outcomes upon retirement can be impacted by life events that occurred during her working life, especially between the ages of 45 and 65.
Women are almost 1.5 times more likely than men to be forced into early retirement between the ages of 55 and 64, due to the health of a family member or inflexible work arrangements.
That means that women retire — on average — 2.4 years sooner than men.
The challenges of managing menopause symptoms are also one of the contributors to women's early retirement.
More than one in seven women aged 45 to 65 face primary caregiving demands — like a sick partner, family member with a disability, or elderly parents. They are three times more likely than men to face these demands, the research finds.
The report said women were also at greater risk of giving up home ownership after a separation or divorce.
They would face a heightened risk of falling into poverty if they do not re-partner, it said.
That was despite the fact they would tend to earn more due to increased participation in paid work or more government support.
Over a quarter of women have experienced family violence — twice the proportion of men, according to the report.
Women between the ages of 45 and 65 can see their finances negatively impacted by life events. (Getty Images: Michelle Mengsu Chang/Toronto Star)
And up to half of those women who choose to leave a violent relationship end up in poverty or homelessness, it said.
Assistant Minister for Social Services and the Prevention of Family Violence, Ged Kearney, said inequality at every stage of life needed to be addressed.
"I know that family, domestic, and sexual violence can touch every aspect of a woman's life — including economic security in retirement," she said.
"It's insidious, and women bear the physical, emotional, and financial toll."
Minister for Finance and Women, Katy Gallagher, acknowledged the report's findings, saying they "will already be well known to many older women" across Australia.
"Women's safety is also central to this work, which is why we have committed to reforming the superannuation and taxation systems to stamp out weaponisation," she said.
Single older women face higher risks of poverty
Women face a higher chance of poverty at older ages if they are single, with more than two in five of those aged 80 or older living in poverty, according to the research.
The report indicated that — compared to men — women are more likely to find themselves below the poverty line. About 25 per cent of women aged 60 or older are living in poverty, compared to 21 per cent of men.
Older women face much higher poverty rates than younger women, and these rates increase with age, the report found. (Supplied: Impact Economics and Policy, HILDA)
Older women also face much higher poverty rates than younger women, and these rates increase with age.
By age 80, over a third of women — 36 per cent — are living in poverty, the report finds.
Ms Gallagher admitted that finding solutions "aren't simple" as women aim to head into their golden years with financial security.
"But we are determined to drive the change necessary for women to live secure, dignified lives in retirement,"Ms Gallagher said.