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The gender pay gap gives retirement advantages to same sex couples

The gender pay gap magnifies into same sex retirement.

The gender pay gap magnifies into same sex retirement. Photo: Getty

Australia’s gender pay gap is magnified into retirement incomes with male same sex couples expected to earn as much as $11,000 more a year in retirement than heterosexual couples, according to research house Rice Warner.

Same sex female couples are expected to come in second place, earning $5000 less than male counterparts in retirement.

Rice Warner research chief Nathan Bonarius told The New Daily that the differences are driven by two main factors. “Same sex couples are less likely to have children and the gender pay gap means men earn more than women.”

Those demographic and lifestyle factors mean that both parties in same sex relationships earn more than their counterparts in heterosexual couplings which results in building larger retirement balances. While women earn less than men, not having children means more time in the workforce for female same sex couples also.

The differences in working income are stark with primary earners in same sex couples earning around 24 per cent more than their heterosexual counterparts. For secondary earners in all-male relationships earn 129 per cent more than heterosexual counterparts and for same sex females the difference is 31 per cent.

The difference between same sex male and female couples appears largely due to the higher likelihood of the latter having children, leading to time out of the workforce.

Source: Rice Warner

However the wide gap in favour of same sex male couples may be exaggerated. “The small sample sizes for same sex couples in the SIH mean that the results cannot necessarily be generalised to represent all same-sex couples,” the report said.

Although the data shows all same sex couples tend to be more affluent, higher joint life expectancy for same-sex female couples is a crucial factor in reducing average incomes over retirement because balances for women have to go further, Rice Warner found.

Rice Warner said all couples’ superannuation could go further if rules were changed to allow joint superannuation accounts similar to joint bank accounts which are familiar to many couples.

“There would be lots of benefits in that,” Mr Bonarius said. Administration costs would be lower and there would be improved engagement” (with both parties focusing on the same account) he said.

“It be better for the funds because it would reduce the number of superannuation accounts and cut their marketing costs. At the moment there are about 28 million accounts for 15 million members,” Mr Bonarius said.

The move would also remove the facility allowing members to split their contributions and make allocations to a low income spouse.

“This is an administrative burden and adds little value to the system,” Rice Warner said.

Further advantages could come from cheaper insurance costs in super accounts. “Retail insurance offerings often have a family discount and this could possibly be extended to group insurance” (like that bought by many super funds)

Currently there are around 12.4 million married people in Australia according to the Australian Bureau of Statistics. If you add to this figure the 850,000 heterosexuals in de-facto relationships as well as 47,000 gay people in de-facto relationships estimated by the Australian Institute of Family Studies, the benefits across the community of Rice Warner’s proposal could be significant.

The Federal government has no plans to legislate for  joint superannuation accounts. The Labor opposition has mentioned the possibility in the past but did not comment on the issue to The New Daily for this story.

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