One of the newest political battlegrounds is women’s superannuation, with the Labor Party recently announcing a $400 million funding proposal to boost the superannuation balances of those who have taken time off work to care for others.
Due to women being on lower wages, on average, than men and because women also generally take more time off work to care for children and other family members than men do, the Australian Bureau of Statistics estimates that, on average, women retire with about 37% less superannuation than men. Of course, because this is an average value, there are also women at the higher and lower ends of the scale who may have much more or less superannuation than the average. However, a study has shown that women over 55 are the fastest-growing group of homeless people in the country as a result of the vast number in this age group reaching retirement age without enough superannuation to fund their retirement.
In our work, we also find that the partner who has been the primary caregiver for children, which is traditionally the mother, tends to come out of family law property settlements with less superannuation than her former partner. This can happen for a variety of reasons, such as because each party retains their own superannuation entitlements (with the caregiver parent having less due to having taken time off work to care for children), or because the party who takes on primary care of the children may need more funds to pay children’s expenses or may receive less income than the other party and so opts to receive houses, cash, or other accessible assets in the division of marital property, rather than superannuation.
It is therefore important that this is factored into property settlement considerations and that parties consider the long-term implications and not just the present or short-term outcomes. Property settlements do take into account the future earning capacities of the parties, so plans for retirement should definitely be a factor in assessing them.
If you would like assistance with a property settlement, please do not hesitate to contact us.