Being carers costs women more than $500,000 over a lifetime, leaving them with less in retirement than men | The Conversation

By the time they retire, women typically have about one third less superannuation than men.

This can amount to more than $500,000 when wages and super are combined over their lifetime.

For most of the 20th century, Australia’s retirement incomes system produced more equal outcomes because the age pension is not linked to a person’s lifetime earnings.

But the introduction of compulsory super in 1992 linked lifetime earnings and retirement income.

The gender super gap arises because women and men have different patterns of paid work and earning over their lifetimes. Women have 14% lower average weekly earnings than men.

On average, a woman in full-time permanent employment accumulates 17.7% less superannuation per year than a man in an equivalent role. That amounts to A$1,540 less per year. This annual shortfall compounds over time resulting in a wide gender super gap by the time women retire.

The interruptions to work caused by providing unpaid care reduces people’s opportunities for accumulating superannuation. For example, having a child leads to substantial reductions in mothers’ workforce participation and earnings. Women’s earnings fall by an average of 55% in the first five years after entry into parenthood.

In contrast, research suggests men’s earnings are unchanged, or even increase, after they become parents.

It’s not just parenthood. One in 10 Australians provide care for an ageing relative or person with a disability or chronic illness. Women do most of this unpaid care. Unpaid carers often reduce their working hours, withdraw from work, or put their careers on hold. Among primary carers only 58% are in paid work.

Some older workers, especially women, also care for their grandchildren. More than a quarter of grandparents of a child aged 13 or under provide care for the child in a typical week, usually while the parents work.

Boosting women’s workforce participation is an important step. But another is to pay super contributions to parents during the time they are off work providing childcare, as recently agreed by the federal government.

But we need an equivalent for other kinds of unpaid carers.

Even so, as long as care continues to circulate between different groups of women – older women, low paid women – and as long as care isn’t valued for the large social and economic contribution it makes, the gender super gap will persist.

Source: Being carers costs women more than $500,000 over a lifetime, leaving them with less in retirement than men

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