- by Anna Pha
- The Guardian
- Issue #1956
Last month, Superannuation Minister Jane Hume (also Minister for Women’s Economic Security [sic]) announced that a draft bill would be released soon for superannuation changes, including new compassionate grounds for early access to super for victims of domestic violence. They would be allowed to apply for up to $10,000 “as an important last resort lifeline.”
The announcement was the day after a series of nation-wide “March 4 Justice” rallies concluded with a major action in Canberra outside Parliament House.
They demanded implementation of the fifty-five recommendations put forward in Respect@Work, the Australian Human Rights Commission’s 2020 report of the national inquiry into Sexual Harassment. The message was: “Enough is enough.”
The idea of women drawing on their superannuation savings to escape domestic violence is appalling. It reflects the government’s neoliberal approach to social issues, its appalling attitude towards women, and once again blames the victim for her plight just as it does the unemployed and sole parents (the majority being women).
The idea was raised three years ago in the federal government’s 2018 Women’s Economic Security Statement by the then Minister for Women Kelly O’Dwyer. As previously noted in the Guardian, around about seventeen per cent of women have experienced violence from a current or former partner (See #1952).
“At least one child is killed by a parent every month; one woman is murdered every week by a partner or former partner; another hospitalised every three hours. Domestic violence can be physically brutal or more hidden in its various non-physical forms,” the Guardian noted.
The 2018 Statement noted that workers can already get permission from the taxation office to draw on their superannuation funds before reaching retirement age in extreme circumstances under “compassionate grounds” rules. The proposed changes would add family and domestic violence to the list of circumstances.
Apart from the practicalities of gaining approval from the Australian Taxation Office to withdraw up to $10,000, the final retirement sum will take a hit. The younger the woman fleeing a violent situation, the greater the loss on retirement.
This would further disadvantage women in a system where there are already gross inequalities.
Even the way superannuation contributions are treated disadvantages women. Workers on incomes below $18,200 per annum – mostly women – do not receive a single cent of the more than $40bil the government forks out in super tax concessions. Sixty per cent of those superannuation tax concessions are handed out to the top twenty per cent of households – more likely to be dependent on men’s incomes. Whereas the fifty per cent at the lowest end of the income scale only receive eleven per cent, reflecting the gender inequality in wages (The Australia Institute).
Neither the Liberal Party nor the Labor Party have done anything to address this gross, built-in inequality.
As a result, women retire with forty-two per cent less in their superannuation accounts than men (2018 Statement). This is largely a result of the gender pay gap; women being more likely to work part time or as casuals; and the time that many women spend out of the paid workforce such as to raise children or care for an elderly relative. In addition, the new face of unemployment is women over forty-five, with more than seventy per cent of unemployed women on JobSeeker/Newstart for over a year (Sydney Morning Herald, 30-09-2020).
Women are also more likely to be affected by the requirement to be earning at least $450 a month from an employer to be eligible for the compulsory superannuation guarantee (CSG) to kick in. The $450 threshold can act as an incentive for employers to casualise work and take on more workers on fewer hours, thus avoiding paying any super.
The CSG should apply to ALL wages, regardless of how small. If there is to be any cut-off then it should be at the higher end of the income scale. The wealthy should not be receiving super tax concessions. At present they are rorting the system.
When the CSG was first introduced, it gradually rose in small increments. ALL workers had to pay for “the employer” contributions by forgoing an equivalent wage rise – even those on low wages who receive no tax concession.
Enabling women to draw $10,000 from their superannuation fund, in particular when they are younger, could cost tens of thousands of dollars in final retirement savings.
In effect, it would present women with the choice of remaining within an abusive and violent situation or undermining their retirement income – a choice their abuser would not be faced with. Already one of the major reasons that women remain in abusive relationships is lack of economic independence and where-with-all.
No woman should have to face such a choice. It is the government’s responsibility to provide the necessary support systems and financial means for them to be able to safely leave a relationship and be protected from a former partner. It is not just necessary for the women but also for the protection of any children involved. Children have a right to grow up in a safe and healthy environment.
Instead of cutting funding to domestic violence services the government should be increasing it.
Women need access to paid domestic violence leave, immediate shelter, ongoing housing, legal and social services, and a range of other assistance if they are to be safe and their children resettled in a new life. The recent legislation to dismantle the Family Court will put women at further disadvantage than they already are (See Guardian #1951).
Opens avenues for extortion
The government created a precedent allowing people to draw up to $10,000 from April to the end of June and another $10,000 from July to the end of the year in 2020 during the pandemic. Instances of financial abuse have been sighted in reports and contributions to the Senate Estimates Committee. No provisions were put in place by the government or the ATO to prevent women being coerced to draw on their savings.
As the ATO pointed out, it would be very difficult to know whether a woman was being coerced to do so. The hearing heard reports that the scheme had opened up another frontier for people to financially abuse their partners.
According to the Australian Prudential Regulation Authority, 4.5mil Australians had withdrawn $34.4 billion via the early super access scheme by the 18th of October. More than half a million had completely drained their savings, including many women.
The government should be funding domestic violence services. It is criminal that it has cut funding, forcing many legal services, refuges and other services to close at a time when domestic violence is on the rise. Don’t be surprised if there is a token gesture in the May budget with an increase in funding that in effect partially restores previous cuts.
If the government gets away with this, not only will it hurt victims of domestic violence, but it will set the scene for further erosion of super funds. The next step will be withdrawing savings for a deposit on a house. Then to fund education in private schools for children of the not so wealthy.
Permitting victims of domestic violence to draw down on their retirement savings also furthers the government’s aim of destroying industry funds.
It must be defeated.