TRANSCRIPT
A new report shows that the 2.7 million Australians from non-English backgrounds currently working in the country are able to put much less to the side for their retirement compared to the overall population.
Research from The Association of Super Funds Australia [[ASFA]] has revealed that women and people over the age of 55 from within that group are the most disadvantaged.
The numbers from the Australian Taxation Office [[ATO]] have showed that although the superannuation funds of people from non-English speaking backgrounds have gone up, they're still nowhere near those earned by English-speaking Australians.
Mary Delahunty, the C-E-O of A-S-F-A, explains how this gap is created.
"For the non-English speaking background cohort, there's a number of things that could be contributing to that. Firstly we find people are often over-represented in gig economy work. And that gig economy work and its relationship to super is a little complicated. We'd like to see a closer relationship. More money that's earned that would attract superannuation rights over time."
The data shows men over 55 from non-English speaking backgrounds have an average superannuation balance of $315,000, with the national average 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.
On the streets of Australia, the importance of a good superannuation fund is well-known.
"Superannuation is your nest when you retire. So you have something that you can be able to rely on for your lifetime once you are already out of work."
Some of the main reasons behind this increasing gap in the superannuation earnings between English and non-English Australians include members of the former group starting work at a later stage of their lives.
Another contributor is their higher representation rates in low income jobs.
Professor Susan Thorpe from the University of Sydney explains how people in these work roles could be exploited by their employers.
"People can sometimes be unaware of the obligations of their employers to pay superannuation 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 that are at an informational disadvantage in that situation as well."
To avoid a potential scenario where people from non-English speaking backgrounds find themselves running out of money at the later stages of their lives, the A-S-F-A has made a number of key recommendations.
The first of them is for an increase to what is known as the Low Income Superannuation Tax Offset.
The A-S-F-A's Mary Delahunty explains.
"We think that should be lifted and changed slightly because that's basically the offset that means you're not paying more tax in your super than outside of your super. And we'll find that non-English speaking background people will be over-represented in that cohort. If we change that particular provision, it will affect the retirement savings of around 200,000 people."
A boost to the Low Income Super Tax Offset could see the superannuation balance of a 35-year-old who's planning to retire at 67 currently earning $44,000 a year get an increase from $293,000 to $336,000.
At the same time, the A-S-F-A says there are other steps that can be taken to close the gap and improve the situation for women and other people from non-English speaking backgrounds.
Ms Delahunty has praised the government's plan to apply super on Paid Parental Leave.
"We've seen the introduction of the government's superannuation on Paid Parental Leave, which is a great outcome for most people in the population and also for people who are of a non-English speaking background. It really helps to add back into superannuation accounts that sort of financial disadvantage that comes from taking time out of the workforce."
