Gender super gap
The policy implications of early access to super during the pandemic could significantly widen the super gender gap, according to the Associate Dean of Finance in the School of Economics, Finance and Marketing, Associate Professor Banita Bissoondoyal-Bheenick.
Among the Federal Government's various stimulus packages, it announced a temporary measure allowing individuals facing severe financial stress due to the pandemic to access their superannuation before retirement of up to $10,000 in the 2019-20 tax year, and another $10,000 in 2020-21 (from 1 July to 24 September 2020).
“The policy is likely to have implications for the retirement balance of those who choose to access their super early, but more so for women,” Bissoondoyal-Bheenick says.
Women currently retire with 47% less superannuation than men in Australia, with the early withdrawal likely to further exacerbate this gender gap.
“Analysis of data released by the ATO and AMP indicates that the policy has not undertaken distributional analysis by gender.
While it will be a while before the full effects of COVID-19 on women’s finances are known, the sectors most severely affected are dominated by women in the workforce.
“The Australian Bureau of Statistics data shows that 325,000 women became unemployed in April, which is 55 % of all jobs lost in Australia, while female work hours reduced by 11.5 %, compared to a 7.5 % reduction in male hours," she says.
At the same time, 70% of those employed in the health and social work sector are women and fall into the lower income earning groups of society.
“The higher rate of job losses by women, coupled with early withdrawal of super, could leave many women’s long-term super balance at a bare minimum or simply being eroded completely,” she says.