Australian women were underpaid $1.3 billion in superannuation over 12 months thanks to a little-known law from the 1990s.
About one in five women did not receive the full amount of superannuation owed to them in the 2019-2020 financial year, according to a new report from Industry Super.
One in four women aged 20-39 lost an average of $1110 and just under 40 per cent of younger women earning less than $25,000 a year lost about $570.
It said about a quarter of women in female-dominated industries like aged care and personal services are underpaid by up to $40,000 over their lifetime, equivalent to about 10 per cent of savings.
The report attributes the shortfall to a law introduced in the 1990s that allows employers to pay super quarterly rather than with each pay cycle.
While many employers pay more frequently than that, organisations that do not can cost employees more in the long term if superannuation contributions go missing.
Workers then lose returns on that money, which would have compounded over time.
While super underpayments can impact anyone, the report argues it is felt more acutely by women as losing out on money at the start of their careers can have a greater impact in the long run.
Women retire with about a third less super than men on average, which can be attributed to a range of factors including maternity leave, longer stints of part-time work and the gender pay gap.
The $1.3 billion lost in 2019/20 was less than the $1.6 billion lost the previous year, however the report attributes that to government assistance paid at the start of the pandemic rather than reforms targeting unpaid super.
Clerical and administrative workers, professional workers and personal services workers in industries like childcare, aged care and nursing were most likely to be underpaid.
The report says even if super contributions appear on a payslip, that does not necessarily mean the amount has been paid into the account.
It argues paying contributions in line with pay cycles would make it easier for workers to track their payments, which should equal 10.5 per cent of their salary, and would ultimately cost the federal government nothing.
“Mandating the payment of super with wages will benefit women immediately,” the report states.
“This change could result in an additional $300 million in super contributions flowing to women over the next four years.”
(Australian Associated Press)