Millions of Australians Face the Harsh Reality of Retiring in Poverty—Unless We Take Bold Steps Now
A staggering number of Australians are on track to retire below the poverty line if decisive and courageous measures aren’t implemented soon. This isn’t just a distant warning—it’s a looming crisis that demands immediate attention.
A recent study conducted by Impact Economics and Policy for the Super Members Council reveals a troubling truth: women bear the brunt of life’s unexpected challenges—such as separation, unpaid caregiving for elderly family members, and experiences of family violence—that severely deplete their superannuation savings.
These significant life events can devastate the retirement funds of Australian women, who, on average, retire with a superannuation balance that is $95,000 less than that of men. This gap isn’t just a number; it represents years of financial insecurity and hardship.
Misha Schubert, the Chief Executive of the Super Members Council, describes the report as a crucial wake-up call for policymakers across the nation. “While Australia has made commendable progress in addressing pay disparities, superannuation gaps, and workforce participation, this research highlights the urgent need for even bolder reforms. Our retirement system must genuinely support women—especially those on low incomes,” she emphasized.
What’s particularly eye-opening is how a woman’s financial security in retirement is often shaped by events that occur throughout her working life. For example, relationship status plays a significant role: single women, separated women, and widows are disproportionately likely to live in poverty during their retirement years.
Statistics show that single older women face persistent poverty at higher rates than their male counterparts. Moreover, women who are divorced or separated are more prone to financial hardship in their later years.
Another critical factor is the unpaid caregiving role many women take on. Women are nearly one and a half times more likely than men to retire early because they need to care for aging relatives. This unpaid labor not only affects their immediate income but also has a lasting negative impact on their retirement savings.
The Super Members Council argues that to close this glaring gender gap in retirement outcomes, bold and comprehensive reforms are essential. One positive step already taken by the Albanese government is the introduction of an additional 12% superannuation payment for parents accessing the government-funded paid parental leave scheme, starting July 1, 2025.
However, the Council insists this is just the beginning. They advocate for a range of further reforms, including:
• Unfreezing the Low-Income Superannuation Tax Offset (LISTO) to help women grow their super balances more effectively.
• Closing gender-specific loopholes, such as ensuring payday super reforms cover all workers, including nannies, household workers, and carers.
• Removing barriers that prevent women from participating fully in the workforce, such as improving access to affordable child and aged care services.
• Creating fairer rules for splitting superannuation during divorce proceedings.
• Increasing Commonwealth rent assistance to ease living costs for retirees.
• Simplifying the superannuation and age pension systems to make them more user-friendly and accessible.
Ms. Schubert stresses, “While recent reforms mark an important beginning, what’s truly needed is a much larger and more courageous approach. Without swift and decisive action, generations of Australia’s lowest-paid women face the very real risk of poverty in their retirement years.”
But here’s where it gets controversial: Should the government prioritize these reforms over other pressing economic issues? And how do we balance the cost of these changes with the urgent need to protect vulnerable retirees?
What do you think? Are these reforms enough, or should Australia be doing more to safeguard women’s financial futures? Share your thoughts and join the conversation below.
