You’ve likely heard about Australia’s gender pay gap.

It currently sits at 22.8 percent and represents the difference between men’s and women’s average full-time earnings. At the end of 2022, this equated to women earning, on average, $26,600 less than men.

But what about the gender gap in superannuation? 
This gap refers to the average difference in men’s and women’s retirement savings (or superannuation) and it’s a massive issue facing Australian women that often goes under-recognised. 

Our superannuation system rewards those who work consistent, linear careers – those who don’t take breaks or spend extended periods in part-time work.  It also rewards those who earn the highest salaries. Mostly, these people are men.

The gender super gap sits well above the gender pay gap, and according to Industry Super, is about 30 per cent when women reach retirement age.

According to a report from KPMG, the median superannuation balance for men aged 60-64 years is $204,107 and for women in the same age group, it is $146,900. The gender gap in superannuation tends to be highest in peak earning years between the ages of 45-49, where it is about 35 per cent.

So what causes the gender super gap?
It’s not surprising that the gender pay gap is one of the primary drivers of the gender superannuation gap. Throughout their lives, women are likely to earn less money than men and therefore, they contribute less to their superannuation accounts.

Women dominate the lowest paid industries especially those in the care sector such as disability and aged care, teaching, and nursing, and are also less likely to reach more well-paying managerial or executive level positions, regardless of the industry they work in.

Women’s smaller pay cheques are compounded by the fact that they are more likely to take time out of the paid workforce to care for others, whether that be children, elderly family members, or those with disabilities.

Women continue to take most of the parental leave that is on offer, whether that be the government’s scheme or from their employer. Superannuation is generally not paid to those on parental leave. 

KPMG’s report indicates the leading factor in the gender super gap is time spent out of the workforce to be the primary carer of young children.

When women return to work after having children, they are much more likely than their male counterparts to work casually or in a part-time capacity, as they continue to juggle caring for others and most of the unpaid domestic work in households.

What are the implications of the super gap?
It’s a sad fact that the fastest growing group of people experiencing homelessness in Australia is women over the age of 55. 

It’s older women who’ve often spent their life working in both a paid and unpaid capacity who are now facing futures of poverty and housing insecurity. 

People with lower superannuation balances are the most likely to rely on the age pension in retirement. In 2020, more than half of those collecting the full pension were women.

What can be done?
There are many ideas that have been put forward as strategies to help close the gender super gap.

One of the easiest and most obvious strategies is for the federal government to introduce superannuation payments for those who take up paid parental leave. There are calls for parental leave to be treated like holiday or sick leave, where superannuation continues to be paid. 

Encouraging more men to take up parental leave when it is on offer would also help narrow the gap.

There are also calls for incentives to be introduced to encourage superannuation contribution sharing between partners when only one parent is working. 

Ultimately, reducing the gender pay gap from where it currently sits at 22.8 percent is the biggest lever we can pull to reduce the gender super gap and help women have comfortable retirements. 

Valuing the work women do in all its forms – whether paid or unpaid – would be an excellent start.