Wed. May 29th, 2024

The Australians with a $140,000 superannuation problem

Tyler Mitchell By Tyler Mitchell May20,2024
Australians from non-English speaking backgrounds are on average about $140,000 worse off come retirement, according to a recent report.
The finding by the nation’s peak superannuation body, the Association of Super Funds Australia (ASFA) was based on an analysis of Australian Taxation Office data. It found that while the average of people from non-English speaking backgrounds had grown in the eight years to 2022, they’re still far behind those who speak English.
ASFA’s analysis, , found men over the age of 55 from non-English speaking backgrounds have an average superannuation balance of $315,000, with the currently sitting at $420,000.
This amount is reduced even further for women of the same age group, who currently have about $240,000 in their retirement savings.

The combined average of both men and women from non-English speaking backgrounds who were 55 years and older was $277,500 — $142,500 lower than the national average.

What’s the reason behind the superannuation gap?

One reason is that those from non-English speaking backgrounds are over-represented in , according the Mary Delahunty, the CEO of ASFA.

“We find people (from non-English speaking backgrounds) are often over-represented in gig economy work, and that gig economy work and its relationship to superannuation is a little complicated,” Delahunty said.

People crossing an intersection in Melbourne's CBD.

Australians from non-English speaking backgrounds are on average about $140,000 worse off come retirement, according to an Association of Super Funds Australia report. Source: AAP / Diego Fedele

Gig workers are typically considered self-employed, which means they decide how much to contribute to their superannuation.

But there have been calls for that to change in some cases. In February, the Transport Workers Union national secretary Michael Kaine said the union would push for companies like Uber and DoorDash to pay superannuation to gig economy workers as part of further .
“People can sometimes be unaware of the obligations of their employers to pay superannuation,” said Susan Thorpe, a finance professor at the University of Sydney’s business school.
“And even though that’s a legal obligation, there is still a substantial amount of underpayment and failure to pay superannuation.

“And I would expect people from non-English speaking backgrounds perhaps … are at an informational disadvantage in that situation as well.”

What can be done to close the gap?

To avoid a potential scenario where people from non-English speaking backgrounds find themselves of their lives, ASFA made several key recommendations.
Among them is an increase to what is known as the .

“We think that should be lifted and changed slightly because the offset basically means you’re not paying more tax in your super than outside of your super,” Delahunty said. “And we find that non-English speaking background people will be over-represented in that cohort.”

Changes to that particular provision would affect the retirement savings of around 200,000 people, she said.
According to ASFA, a boost to the low income superannuation tax offset could see the superannuation balance of a 35-year-old — who’s planning to retire at 67-years-old and currently earning $44,000 a year — get an increase from $293,000 to $336,000.
Delahunty praised the government’s plan to .

“It really helps to add back into superannuation accounts that sort of financial disadvantage that comes from taking time out of the workforce,” she said.

Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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One thought on “The Australians with a $140,000 superannuation problem”
  1. As someone from a non-English speaking background, I can relate to the struggles mentioned in this article. It’s disheartening to see the disparities in superannuation savings due to factors like gig economy work. More needs to be done to address this issue and ensure financial security for all retirees.

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