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Most people are familiar with the gender pay gap, the average difference between remuneration for working men and women.
However, the gender superannuation gap—another area of pervasive disparity, is a lesser-known factor contributing to Australia’s gender wealth gap.
According to the Association of Superannuation Funds of Australia Limited (ASFA), in the years approaching retirement age, the median super balance for women is generally 25% lower than for men (Source: ASFA). This means that on average, women will retire less financially secure than their male counterparts.
The reason for this disparity is systemic—the current superannuation system is linked to paid work, which means it disadvantages those who are more likely to experience working arrangements that differ from ongoing paid full-time employment, such as career breaks and casual/part-time employment.
Statistically, women are more likely than men to:
Women are more likely than men to become carers when family members require assistance. Women also take on more unpaid care and housework than men do, which impacts their capacity to engage in paid work (Source: PMC).
Ulton Partner and Wealth Advisor, Kylie Wright, also identifies maternity leave—both paid and unpaid—as one of the factors contributing to super disparity.
“By law, employers aren't required to pay super on parental leave regardless of whether the leave is funded by the government or employer,” says Kylie.
“Let’s say you have three children and take a year of maternity leave for each child—that’s a fairly significant cost at the start and compounded over your working life,” she says.
The cost of maternity leave also impacts employees’ ability to qualify for timely long service leave, too.
“Most people aren’t aware that maternity leave doesn’t count towards long service leave. This means that if you were to take two years maternity leave, you ultimately have to be employed for 12 years to qualify for the long service leave earned for 10 years of service.”
Kylie cites these factors, along with the bigger societal expectation that women are expected to be the primary caregivers of the family, as the drivers of Australia’s super disparity between men and women.
“If a child is sick, it’s typically the mum who will be the one to go home and care for them. While it’s getting better, until there is a genuine 50/50 shared responsibility in raising children, there is going to be a superannuation disparity,” Kylie says.
Currently, women spend 30.2 hours per week on unpaid care and domestic duties, compared to men, who spend 21.8 hours per week (Source: PMC).
As society moves at its own pace towards bridging gender inequalities, Kylie encourages couples to plan how they will ensure the new mother’s super doesn’t take such an extreme hit due to maternity leave.
“Some things that couples might like to consider are: directing a portion of the working partner’s super contributions to the other partner’s super account while they are on unpaid leave, splitting the unpaid leave time evenly between both partners, or committing to making super contributions across the course of the unpaid maternity leave,” Kylie says.
“Now, I do understand how challenging that last one is—especially when you’re down a wage,” she adds.
“And this is why government support is needed to address this issue. A better paid maternity leave scheme that addresses the super and long service leave shortcomings would make a big difference,” Kylie says.
The super gap, just like the pay gap and the family labour gap are a big deal, because these are additional hurdles women need to overcome on their journey to financial independence—a journey that begins with financial literacy.
“In the majority of cases I see, it’s the man who controls the household’s finances; who makes most of the big decisions and understands how the finances work,” Kylie says.
“And this can put women in a vulnerable position. Because if something were to happen and they suddenly didn’t have their partner there to make those big decisions, they’d be in for a steep learning curve,” she says.
“My advice to all women who want to build financial literacy is to first understand that there are no dumb questions—ask lots of questions as often as possible. Make sure you’re involved in the financial decisions that are being made on your behalf. If you’re seeing a financial planner, there should be no meeting that happens without you. Read up, speak up when you don’t understand, and be open to learning,” Kylie says.
“The earlier you start investing in building your financial acumen, the better. It’s much easier to be learning as you go than the stress of suddenly being thrust into the decision-making role and trying to make the right decisions while dealing with the emotional trauma of a recent health decline, death, or separation,” she says.
For Kylie, the pursuit of financial independence for women is deeply personal. She recalls her mother's experience of navigating financial challenges as a divorced single parent in the 1980s.
“My mother got divorced in 1984 with four children under the age of 12. Back then, a woman could not get a mortgage without having a man to cosign with her. Luckily, her father stepped in. His signature enabled her to get a mortgage, but she paid the entire mortgage off by herself. As a single mother with four kids, it was tough,” says Kylie.
“I’m fully aware of how challenging it was for my mother, coming out of that marriage with limited financial skills. Because of this experience, I am focused on doing what I can to ensure both parties within a couple understand their financial position and the financial goings-on,” she says.
Leading Ulton Wealth team alongside Wealth Manager Jes Wilkinson, Kylie advocates for proactive strategies, such as fostering financial literacy and promoting active involvement in financial decision-making.
Commenting on the importance of financial awareness and autonomy, Kylie says: “It’s as important as employment, health, and family. It’s something you just have to commit to learning and building—because it’s so important to make the right decisions.”
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