We recently wrote a piece about retirement savings for women and the devastating effects that a lack of equity is having. Retired women are Australia’s fastest growing poverty class. Women are typically the ones who move in and out of employment and part time work so that they can be the carers for children and sometimes even elderly family members. But the truth is that we are seeing a long-term effect now where women who have sacrificed their careers to be the nurturers are finding themselves a statistic when they get divorced later in life and are left with nothing.

The statistics again are truly frightening.

·       On average, women retire with about half as much superannuation as men.

·       70% of all single retired women live on the pension.

·       40% of single retired women live below the poverty line.

The crisis has been looked at by senate enquiry, the Australian Human Rights Commission, Industry Super Funds and the Australian Tax Office. There is an absolute wealth of comprehensive reports that have been released over the last 10 years about this problem of women who “accumulate poverty”.

However, one of Australia’s major political parties has decided to put this issue front and centre of the next election campaign with an announcement this week.

The Australian Labor Party plans to boost the retirement savings of women whose working life has been disrupted by caring for family has left them with barely enough retirement savings to live off and a reliance on the pension to get by.

The idea behind this scheme is for a $400m injection in to women’s superannuation accounts and keep their contributions active when they are off work for paid parental leave. There is also a plan to introduce a lower threshold for their employers to begin making compulsory superannuation contributions in to their accounts.

The statement from Federal Opposition Leader Mr Bill Shorten said that if elected his government would “help women plan for a secure financial future” with this new scheme in place and that he “believed that no Australian should be penalised for taking time out of paid work to have children”.  The plan is for his government to ensure that recipients of “Commonwealth paid parental leave and dad and partner payments continue to receive super contributions”.

Australia is fortunate to have a solid foundation for retirement planning and savings in our superannuation system but there has been this unaddressed inequality for years. As a consequence of this, we are seeing an epidemic of women being left with nothing when they retire, especially if they are divorced.

We remain optimistic that if this plan is introduced and of course further built upon, we will have a dramatic reduction in the amount of our retired women who are forced to live in spartan conditions and rely on the pension supplement in order to just get by.