Super for under-18s is a gendered issue, costing women up to $11,000 at retirement

The gender pay gap starts early. Research suggests there are even differences in the amount of pocket money girls and boys receive from their parents. The gender gap in superannuation also starts young – girls under the age of 18 have, on average, barely more than half of the super that boys the same age have, despite being more likely to be engaged in paid work.

After they turn 18, the gender super gap narrows from 42% to only 9%, so what is it about being young that means boys can save so much more for their retirement than girls?

All workers are entitled to a 12% employer contribution to their superannuation accounts, with a few glaring exceptions.

There is a superannuation guarantee exemption that is largely to blame for the gender gap for young workers – workers under the age of 18 only receive superannuation if they work more than 30 hours per week for a single employer.  The Super Members Council estimates that this exemption can cost women up to $11,000 by the time they reach retirement.

This exemption makes up approximately one fifth of the average gap at retirement, when women have around $50,000 less than their male peers. The gap is equivalent to just under two years of the age pension, despite women retiring earlier and living longer. The super gap means that older women are more likely to experience poverty, housing stress and homelessness as they age, and are more reliant on the (increasingly inadequate) age pension than their male peers.

Even before they turn 18, women are more likely to be working part-time. Teenage girls make up more than half of the under-18 workforce but are much less likely to be working more than 30 hours in a single job. In fact, girls make up only a third of teenage employees entitled to superannuation. This is because, even as teenagers, girls have more caring responsibilities than their male peers, and because the industries they are concentrated in are more likely to offer casual and part time jobs.

Even as teenagers, girls are more likely to work in female dominated industries, such as community and health care and sales, which are lower paid, with higher rates of casualisation than their male peers. In fact, teenage boys are more likely to work in trades and as technicians and labourers. For young people, these roles often involve apprenticeships which are more likely to be structured as full-time roles.

Treasurer Jim Chalmers has this week flagged an openness to changing the legislation so that young workers can benefit from the superannuation guarantee. Analysis by the Super Members Council shows that young women would have nearly $2,500 more in their super accounts by the time they turned 18 if the 30-hour rule were scrapped.

The impact of caring responsibilities and associated time away from work on superannuation balances in mid-life is well documented. The Government has begun addressing that gap by introducing superannuation on Government paid parental leave, a welcome move that will make a significant difference for women as they reach retirement. It’s now time to address the gender super gap at the beginning of women’s working lives by abolishing the exemption for young workers.