Why women will benefit from Payday Super

The incoming Payday Super legislation is set to have a significant impact on the “super pay gap” experienced by women professionals across the board, one expert has said.

In an upcoming episode of The Lawyers Weekly Show, produced by Accountants Daily’s sister brand, Lawyers Weekly, UniSuper business development manager Veronica Barbetta discussed the disadvantages women experience from the gender pay gap, and its compounding effect on superannuation.

However, she said, the new Payday Super laws will repair some of the damage.

Barbetta has seen, she reflected, how the gender pay gap starts from day one and how, by the time they reach retirement age, women have, on average, 20 per cent less super than men. Beyond this shocking number are other influencing factors, namely, if women choose to step away from work to start a family, the difficulty in returning to work and how this affects career progression.

“That tends to exacerbate the super pay gap because, obviously, when you take time out of the workforce, your superannuation pauses,” Barbetta said.

One can see how this pattern becomes just one of many self-fulfilling prophecies for professional women.

While acknowledging advancements in the superannuation system and its structure, such as superannuation on parental leave, she noted how comparatively young the structure is and its remaining deficiencies.

“It was built at a different time when there weren’t as many women in the workplace. And indeed, there was structural discrimination in the workplace for women.”

Looking at the future, Barbetta expressed enthusiasm about the structural changes taking place through policy that address these imbalances, specifically, with the new Payday Super laws that will take effect on 1 July 2026, where employers must pay the super guarantee at the same time as salary.

Currently, super guarantee payments can be received quarterly as a minimum. For women, Barbetta discussed, combining the approximate 20 per cent pay gap with superannuation paid four times a year, “you lose all that compound interest” and “you lose the ability to make your superannuation work for you”.

Barbetta said: “If you’re paid fortnightly, that’s going to make a huge difference. Rather than getting four payments a year, you’re going to get 26 payments a year. That is going to make a massive difference towards the end of your working life as you look at your superannuation balance.”

It’s something she believes is overdue and the industry’s “very excited about”.

Perhaps this will solve another issue, as highlighted by Barbetta: the lack of engagement with younger employers and the resulting management (or lack of) of their superannuation.

She suggested it “kind of allows people to be a little bit disengaged with their superannuation”, suggesting younger professionals don’t consider it to be worth worrying about at the early stages of their career.

“However, the earlier you engage with and think about your superannuation and make active choices, the better your outcome in retirement will be,” she said.