LINDA S. ROSENMAN AND SHARONWINOCUR
AUSTRALIAN WOMEN AND INCOME SECURITY FOR OLD AGE: A COHORT STUDY
ABSTRACT. Australian women constitute a majority of the aged population in Australia, and are more likely than men to be single in old age as well as dependent upon the means-tested Age Pension with no, or only limited, income supplementation from other sources such as occupational superannuation. Based upon research on a national sample of 1016 Australian women, aged across the adult life span, this paper reports age cohort patterns of work, family, and economic expectations for old age. While work and family patterns of Australian women are changing, the clear trend remains towards labour force withdrawal and part-time work for long periods while children are present in the home. The implications of these patterns for income security in old age are discussed. K e y W o r d s : aged women, income security, age cohorts, Australian women, aged income
security, f'mancial planning, women's work patterns, family patterns Despite the image of a young country, Australia like m o s t other countries is now experiencing a gradually aging population. This is forcing a major review and re-analysis of the economic position and social well-being of current and of future generations of old people. In the light of this, social and economic policies are also being reexamined. The population trends in Australia are similar to those of m a n y other countries. In 1986 people aged over 60 represented 15% of the population, by 2025 they are expected to comprise 16.1%, a percentage already reached in some European countries. In common with many other countries, the gender composition of the aged population is predominantly female. As the population ages, it becomes increasingly female due to the lower male life expectancy, as well as increasingly single, due to the tendency of women to marry older men. This feminization of the aged population has major implications for the economic and social well-being of the older population. Yet the situations of older women have tended, until very recently, to be overlooked in Australian social research and social policy. This paper will explore socially and economically based factors relevant to the current and future well-being of old people in Australian society, with particular focus upon women. It is based upon research carried out on a national sample of Australian women aged 18 and older. A n understanding of the economic situation of older women requires an appreciation of the Australian income security system for old age, and its relationship to the labour force. THE AUSTRALIAN RETIREMENT INCOME SYSTEM The Age Pension is the national retirement income system in Australia. This Pension scheme, administered through the Commonwealth Department of Social Security, is unusual amongst OECD countries in that, since its inception, it has Journal of Cross-Cultural Gerontology 5: 277-291, 1990. © 1990Kluwer Academic Publishers. Printed in the Netherlands.
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LINDA S. ROSENMAN AND SHARON WINOCUR
been a non-contributory, means-tested scheme rather than being a social insurance system in which income in retirement is in some way linked to earnings during working life. Receipt of the Age Pension is subject to income and assets tests. It is paid at a full rate of $6,461.00 p.a. (1989) for a single person, and $10,769.00 p.a. for married couples, and is withdrawn at the rate of $1.00 for every $.50 in other income. A partial pension is payable up to an income level of $15,002.00 p.a. for a single person, and $25,178.00 p.a. for a married couple. The Age Pension has the goal of ensuring a guaranteed level of income security for the aged, single parents, the disabled, and veterans and certain other categories of people within the Australian population. The income maintenance function of retirement incomes policy has been predominantly met through the private contributory superannuation system. This system, the equivalent of employer pensions in the U.S.A., is organized through a person's paid employment and is now a part of employment contracts negotiated by unions. Participating employers, the superannuation funds, and superannuation recipients enjoy generous tax concessions from the government, which are intended to encourage the spread of superannuation. In common with the private occupational pension systems of most countries, occupational superannuation payouts at retirement are a direct function of earnings-linked contributions made during working life. An important characteristic of retirement incomes policy in Australian society is the existence of mandatory retirement ages for most men (age 65) and women (age 60), on reaching which they are expected to cease paid employment entirely. These ages correspond to those at which people become eligible for the Age Pension. During the past decade there has been a clear trend to early retirement in Australia which has meant that many workers are leaving the permanent workforce earlier than the normal retirement age. Some Australian states, and the Australian Government, have now foreshadowed age discrimination legislation and the introduction of a more flexible approach to retirement. When, and if, this occurs, major attitudinal change will also be necessary to encourage workers and employers to continue employment beyond age 60 or 65. The response to the growth in the absolute size of the aged population, and the recognition of the possible implications for government fiscal policy of a substantial growth in Age Pension commitments, has been an increased emphasis upon self provision for retirement through occupational superannuation. Despite the commitment of the current government to the maintenance of an adequate Age Pension (Howe 1989), it is likely that in the future the noncontributory Age Pension will provide only for a minimum floor income security, while savings through occupational superannuation are expected to provide an increasingly larger proportion of the retirement incomes of most Australians. This circumstance would have major implications for the economic status in retirement of those whose occupational superannuation entitlements in their own
AUSTRALIANWOMENAND INCOMESECURITYFOR OLD AGE
279
rights are limited or non-existent. These are predominantly people who for the majority of their lives have not been members of the paid workforce, those whose paid employment has been discontinuous or limited, and whose earnings have been correspondingly low. The majority of these are, and will continue to be, women. THE ECONOMIC SITUATION OF OLDER WOMEN There has been relatively little research in Australia that focuses upon the economic situation of the older population and almost none that specifically targets women. Research undertaken by the Australian Government Commission of Enquiry into Poverty (Henderson 1977:100-109) found that the aged made up the majority of recipients of government income security benefits, and that people who were dependent upon the Age Pension were amongst the poorest of the poor. Since this research was carded out economic and social changes have led to other groups, particularly single women with dependent children, replacing the aged as the most economically disadvantaged. Recent analyses of the income of the aged indicate that income differentials in old age are most marked between married and single income units, with married couples having more sources, and higher amounts, of income than single women and men (Manning and King 1988). The current generation of older Australian women is much more likely than older men to be living alone and to be living on very limited incomes. By all indicators of social need, older women are clearly disadvantaged. Women are more likely to be living on the Age Pension with very little or no other sources of income such as that generated by occupational superannuation, private pension plans, savings, or investments. (Rosenman and Leeds 1984). The figures in Table I are cross-sectional, representing data on four older cohorts of the population, and therefore do not show the numbers who rely upon the Age Pension at any given age. When the figures on receipt of the Age, Widows or Invalid Pensions, and Sickness and Unemployment Benefits are considered in conjunction with population statistics, it appears that the majority of women can expect to spend some part of their old age single, primarily due to death of a spouse. Consequently, women are much more likely than men to be living on the single Age Pension. Secondly, due to their greater life expectancies and lower pensionable age, women are likely to spend a longer period of their lives living on the Age Pension than are men. It is possible that some of this dependence upon the Age Pension is a cohort phenomenon that reflects limited opportunities to save for retirement during working life both due to prevailing economic conditions (Great Depression, World War II) and the absence of instruments such as superannuation that would encourage saving for retirement. In Australia, occupational superannuation as a tax advantaged form of saving for old age has become more widely available only during the past decade. As subsequent generations of Australians who have been beneficiaries of the
280
LINDA S. ROSENMANAND SHARONWINOCUR TABLE I Mean percentage of income received from different sources by age cohort, gender, and marital status
Source
Age 55-59
60--64
65-69
70+
23 6 16 54 1
48 10 21 21 0
62 12 23 3 0
100 219
100 194
100 143
55-59
60--64
65-69
70+
33 3 9 54 1
49 6 27 18 0
70 7 19 2 1
68 9 23 0 0
TOTAL AVERAGE INCOME ($A/week)
100 202
100 135
100 140
100 106
Source
Age of husband
SINGLE MEN Pensions and benefits Superannuation pension Asset incomesa Employment Other
Percentages 7 1 11 80 1
TOTAL AVERAGE INCOME ($A/week)
100 324
Source
Age
SINGLE WOMEN Pensions and benefits Superannuation pension Asset incomes Employment Other
COUPLES Pensions and benefits Superannuation pension Asset incomes Employment Other TOTAL AVERAGE INCOME ($A/week)
55-59
60--64
65--69
70+
6 4 11 78 1
19 6 22 52 2
49 10 25 16 1
55 8 29 8 0
100 519
100 402
100 278
100 260
Source: Australian Bureau of Statistics 1986 Income Distrubition Survey, unit record tape (Foster 1988, 23). Note: In August 1989, $A1 was equivalent to $US 0.75. a Does not include imputed income from value of own home.
AUSTRALIANWOMENAND INCOMESECURITYFOR OLD AGE
281
long postwar economic boom enter the retirement ranks, their assets, life savings and superannuation accounts are more likely to provide supplements or alternatives to the Age Pension. The expectation appears to be that as women's rates of labour force participation increase, their opportunities to save for retirement, especially through superannuation, will correspondingly grow. They will then be in a better position to plan for retirement with supplemental or alternative sources of income to the Age Pension. The lifetime patterns of employment, family, and the links to retirement income planning of Australian women were the focus of a research project conducted by the authors on Women and Economic Security (Rosenman and Winocur 1989). Analysis of these patterns has major implications for the economic status of current and future generations of older women, since the income of most women in old age reflects marriage and family-linked economic decisions made during earlier life. For the purposes of retirement incomes policy age cohort patterns are important, since age is the primary eligibility criterion for public and private retirement incomes programs. Retirement incomes policy must be developed with reference to the living situations of those who are currently of retirement age (60+) and to the expected patterns of those who are not yet aged. METHOD The authors' project was designed to collect data on women's past and future, expected patterns of marriage, family, work and retirement, their attitudes and actions in relation to financial planning and their intentions with respect to their own future financial security. Age cohort differences were a particular focus of the research. An interview survey was carried out in conjunction with the Morgan Gallup Survey of Consumer Opinion Trends, a weekly Australia-wide survey of men and women. A large specially designed set of questions was added to two weekly surveys. National probability samples of 680 Australian women (aged 16 and over) and 333 women (aged 40 and over) were interviewed in March and in April, 1988. The second sample was drawn to ensure an adequate representation of older women. Data were analyzed by 10 year age cohorts and also by life cycle cohorts more closely matching reported family stages. For this paper the youngest age cohort (27 women under age 20) was excluded from the analysis. This paper analyzes a subset of the data to answer the following questions. (I) (2) (3)
What are the family and work-life patterns of Australian Women? How do these vary amongst different age cohorts? How do women plan to manage their income for, and in retirement?
The answers to these questions are then considered in terms of implications for retirement incomes policy.
282
LINDA S. ROSENMANAND SHARON WINOCUR RESULTS
Life Patterns Australian women exhibit high rates of marriage and childbearing, particularly in comparison with women in other similar western countries (e.g., U.S.A. and Britain), and much lower rates of labour force participation. The latter is beginning to change, especially amongst the younger age cohorts. It is instructive therefore to compare the experience of different age cohorts, summarized in Tables II and IlL TABLE II Marital and family experience of sample by age Experience
N
Age
Total
20-29 30-39 (25-29) a
40--49
50-59
60-69
70+
N
144
201
186
151
106
986
198
%
( ) Marital Never married
Percentages 40
8
2
3
4
5
93
9
75
72
70
61
36
625
63
18
26
26
35
59
268
27
7 1
13 2
10 8
3 21
1 54
74 109
7 11
47 (70)
86
97
92
84
83
808
92
33
47
61
57
49
39
497
50
(14) Once married and still married
50 (77)
Has been divorced, separated or widowed 10 Now divorced/ separated 6 Now widowed 1
Childbearing Had children
Had children before age 25
(44) Modal number of children
0(53%)
2(37%)
2(32%)
4(29%)
a Numbers in parentheses refer to 25-29 age group only.
4(34%)
2(32%)
2
(27%)
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AUSTRALIANWOMENAND INCOME SECURITYFOR OLD AGE TABLE III Work force experience of sample by age Experience
Age
Total
20-29
30-39
40-49
50-59
60--69
70+
N
144
198
201
186
151
106
986
N
%
Percentages
Laborforce 5
0
1
4
6
18
46
5
Never dropped out
19
3
3
5
3
2
55
6
Dropped out of labor force for any reason
76
96
95
91
91
80
885
90
Dropped out for childbearing or child care
37
77
76
54
42
22
553
55
Will be/were out of work force for 10 years or more for childreafingI
5
23
40
48
42
70
190
34
Full-time work
43
25
28
20
3
0
232
24
Part-time work
10
32
25
17
6
2
191
19
Home duties
35
39
41
49
59
58
450
46
1
0
2
11
32
40
113
12
Never worked
Current work status
Retired
1 Includes those who did not/will not return to work after having children.
Women Aged 60 and Over Amongst the two age cohorts above 60, only 5% had never married. The relatively large percentage of older women who had married but not had children is a reflection of the impact of the Depression and the Second World War which in all likelihood caused an initial postponement of childbearing that ultimately became permanent for some women. There were very few respondents in this age cohort, or any other but the youngest cohort, who had been in the labor force but not withdrawn from it at some time during their adult lives. The cohort aged over 70 had the highest
284
LINDAS. ROSENMANAND SHARONWINOCUR
percentage of women (18%) who reported never having worked in paid employment at all. The majority of women in this particular age cohort had withdrawn from the labour force either following their marriage (31%), or when they had had children (22%). Of those who had withdrawn, the majority never retumed to paid employment, the remainder who did return to work did so after a long period (10 years or more) out of the work force. The pattern for women in the 60-69 cohort is similar, although a lower proportion of the latter never worked (6%) or were out of the work force for ten years or more, or never returned to work (42%), than amongst the oldest group. Amongst the majority of those women currently in the aged population, labour force attachment was therefore limited and was characterized by long periods out of the work force. Consequently it is likely that few were in a position to make financial provision for their own old age and most probably had to depend upon provision made by a spouse and/or their own right to the pension. Amongst the oldest age cohort (70+), prior superannuation scheme membership by a spouse was also quite limited. Asset accumulation in the forms of home ownership and some savings were relatively common amongst married couples; however, they were less common amongst single and widowed women. The majority of older women (60+) at the time of interview were dependent completely (60--69: 41%; 70+: 45%) or in large part (60--69: 23%; 70+: 26%) upon a social security pension. The oldest age cohort (70+) had the highest proportion totally dependent upon a pension. Those women who were no longer married or never had been, were the most likely of all to be dependent upon the Age Pension (80%). This is consistent with other research (Table I) that indicates that in general married couples have more income and more diverse sources of income than do the non-married, particularly non-married (mainly widowed) women. This may be a cohort phenomenon reflecting the previous lack of retirement savings opportunities available to older Australians, or it may imply that, despite the societal expectation that men will make provision for a surviving spouse many, for whatever reason, could not or did not, particularly amongst the two oldest age cohorts.
Women Aged 40-59 The life patterns of these two age cohorts were somewhat different from those of the oldest cohorts, reflecting changes in both marriage and childbearing patterns and in labour force participation rates. Age at marriage and at the birth of the first child appeared to be lower. The percentage of women who had begun to have children by age 25 peaked at 61% in the 40-49 cohort although the modal number of children peaked at four in the 50-59 and 60-69 cohorts. Rates of labour force participation are higher, with 37% of the 50-59 age cohort, and 52% of the 40--49 age group in the labour force (full- or part-time) at the time of the interview. The majority had dropped out of the workforce to rear their children, many for 10 years or more. The majority had gone back to work,
AUSTRALIANWOMENAND INCOMESECURITYFOR OI~DAGE
285
initially on a part time basis, and approximately 50% planned to remain in parttime work rather than increasing to full-time. The growth in availability of part-time work has been one of the characteristics of the Australian labour market during the past decade, and may be one of the main reasons for the marked increase in female labour force participation during this period. Another study has confirmed a marked preference among women for parttime work (Glezer 1989), finding that around three-quarters of women in either full- or part-time work would prefer to work part-time. There is considerable debate about the merits and demerits of the increasing 'casualization' of the workforce, particularly for women, as they make up most of the part-time labour force and therefore are most affected. Although part-time work allows women to adjust their work-lives to accommodate family responsibilities, it also has serious drawbacks. Since permanent part-time work is relatively rare, most casual workers miss out on normal wage-related benefits such as special leave provisions and occupational superannuation. Therefore limited access to superannuation combined with generally low eamings for most women continues to limit their ability to save for retirement. The Commonwealth government Retirement Incomes Policy (Howe 1989) proposes that part-time workers be eligible for superannuation scheme membership if it is available to full-time employees.
Women Aged 20-39 The most evident trend in this age cohort is the marked increase in the proportion of women who marry during their twenties. By subdividing these cohorts in smaller groups, it becomes clear that the significant shift from single to married status occurs in the 25-29 age group; only 34% of those under 25 being married compared to 77% of those over 25. These data suggest that women are currently marrying later, as is also suggested by Australian Bureau of Statistics figures which show a gradual increase in the median age of women at first marriage from 21.1 in 1971 to 23.8 in 1987 (ABS 1987). This change is associated with a delay in the birth of the first child. Among those in the 20-29 age group, only 33% had had their first child by the time they were 25, a lower percentage than for any other age group including those aged over 70. The rate of labour force participation amongst women aged 20-29 equals that of women aged 40--49 at 53%. However, participation in full-time work peaks in the 20-29 age group (43%), and drops to 25% between 30 and 39. Part-time work participation exhibits an opposite trend: 10% of 20-29 cohort and 32% of the 30-39 cohort were working part-time. These work force participation trends may be explained by patterns of childbearing. Within the 20-29 year age group, 19% of the 20-24 year group had dropped out for childbearing and child care while 56% of the 25-29 year group had done so. For the 30-39 year group, three-quarters of the women had withdrawn from employment although some of these had returned to part-time
286
LINDAS. ROSENMANAND SHARONWINOCUR
work. Forty-seven percent of the women in the 30-39 age cohort had been out of the workforce for 5 or more years, while 23% of this group had stayed out for 10 years or more, or expected to do so. Overall, women report extremely low earnings. In every age cohort the median earnings for both full- and part-time workers are under $20,000 annually, and the majority earned under $30,000. Only amongst the 40-49 age group are there any significant proportions (27%) earning over $30,000 a year, the income at which women might conceivably be able to save privately for retirement, and/or be in jobs carrying employer-subsidized occupational superannuation.
Superannuation Scheme Membership The economic impact of discontinuous working patterns is clear when women's membership of superannuation schemes is considered. As shown in Table IV, overall, 35% of employed women in the sample reported belonging to a superannuation scheme. Superannuation scheme membership peaked amongst working women in the 40-49 cohort. However, when it is considered that only 43% of women in the sample were employed, the percentage of all women who were currently in a superannuation scheme, let alone had a superannuation benefit preserved for retirement at age 55 or over, was much lower - only 15%. Amongst those women who belonged to superannuation schemes, wages were generally extremely low. Eighty percent reported earnings below $30,000 annually, and 47% less than $20,000 a year. Their final benefits, which are usually earnings linked, would therefore be correspondingly low. Women's reasons for not joining superannuation schemes also reflected their labour force status and perhaps, as importantly, their expectations about their lifetime labour force participation. Table V indicates the major reasons given by women for not joining a superannuation scheme. The most frequent reason given was that no scheme had been available where or when they were employed or, if a scheme had been available, that their employment status (usually part-time or casual) had excluded them from eligibility. However, over one quarter (26%) had decided not to join a scheme when one had been available. The reasons most commonly given for not doing this were firstly, that they could not afford the payroll deductions and secondly, that they did not expect to remain with the same employer permanently, and therefore that it did not pay to join. A substantial number also lacked knowledge or information about superannuation and so did not, or had not, joined a scheme. There appear to be some age related patterns to the reasons for not belonging to a scheme. A higher percentage of women aged over 50 reported not belonging to superannuation because it was not, or had not been, available to them while a slightly higher percentage of women under 50 reported either a lack of eligibility, due to their work status and/or deciding not to join, although they were eligible, because they could not afford the contributions or did not plan to stay with the same employer.
287
AUSTRALIANWOMEN AND INCOME SECURITYFOR OLD AGE TABLE IV Superannuation coverage by age
Total
Age 20-29
30-39
40-49
50-59
60-64
Percentages (N) Percent of employed women with coverage in own right Number of employed women
39% (76)
32% (114)
44% (109)
36% (69)
13% (13)
35% (140)
Percent of married women whose husbands have superannuation Number of married women
33% (69)
64% (140)
62% (125)
38% (121)
13% (107)
50% (562)
Percent of total women with superannuation coverage Number of women
23% (144)
20% (198)
24% (201)
16% (186)
15% (151)
15% (983)
TABLE V Reasons for not joining a superannuation scheme by agea Experience
Total N
Age 20-29
30-39
40---49 50-59
60--69
81
104
97
28
8
387
Reasons Superannuation not available Eligible but did not join Not eligible Didn't get around to it
Total
69
70+
N
%
Percentages
22
30
27
43
46
31
121
31
35 22
25 30
30 25
17 17
14 14
0 37
99 92
26 24
21
15
19
22
25
25
75
19
a Base is ever employed women who did not have superannuation coverage. These age related patterns of superannuation scheme membership reflect the relative recency of superannuation as a fringe benefit for Australian workers. W o m e n ' s preference for part-time and casual work, their low wages, and their expected lifetime employment pattems either exclude them, or encourage them
288
LINDA S. ROSENMAN AND SHARON WINOCUR
to exclude themselves, from superannuation schemes as these are currently designed.
Financial Plans for Retirement W e have seen that the current generation o f older women is heavily dependent upon the A g e Pension (Table I). The findings o f our project however indicate a gradual shift between age cohorts in w o m e n ' s expectations about how they will manage financially in retirement. It is clear from Table VI that there is a difference in financial expectations between those who are currently sixty or older and the younger population. Higher percentages o f women who were still below retirement age expected to have non-Age Pension sources, including superannuation, savings and investments, available for economic support in retirement. Those in the age cohort approaching retirement age (50-59) were more likely to see the A g e Pension in combination with other sources as they way they would manage in retirement. A m o n g s t the older cohorts (60+), partial or total dependence upon the A g e Pension was for most, o f course, already a reality.
TABLE VI Ways of managing financially in retirement by age Experience
Age 20-29
30-39
40-49
Total 50-59
60-69
70+
N
%
Percenmges Age pension alone Superannuation alonea Age pension + other sources b Superannuation + other sources Never thought about it/don't know
16
10
16
27
41
45
233
24
16
31
28
20
13
7
205
21
15
20
22
25
23
26
213
22
30
27
26
23
20
13
237
24
23
12
8
6
3
10
98
10
144
198
201
186
151
106
986
a Superannuation includes lump sum and annuities. b Other sources includes savings, insurance, annuities, interest and dividends, employment.
AUSTRALIANWOMENAND INCOMESECURITYFOR OLD AGE
289
Considering the relatively low rates o f superannuation scheme membership amongst even the younger age cohorts, it is unlikely that many of the respondents anticipated surviving beyond 60 on their own occupational superannuation. The majority still expected that their husbands would do the planning, and provide the resources to enable them to maintain their living standards into retirement. Australian women, especially those aged over 45, saw it as being a man's responsibility to plan for his wife's future. The extent to which husbands do, or are able to do so, particularly once they have departed the scene, is questionable. Eighty-eight percent of widowed women, and 65% of the divorced women, reported being dependent upon an Age Pension or other government benefit for their income. IMPLICATIONS OF FINDINGS FOR WOMEN'S ECONOMIC SECURITY The demographic projections of both the absolute numbers and the relative size of the aged population in future decades has led to a concem in Australia about meeting Age Pension commitments in future years. Australian government policy has explicitly begun to encourage self-provision for retirement, especially through the tax advantaged occupational superannuation system (Howe 1989). While it is recognized that current generations of older women are very dependent upon the Age Pension, the assumption tends to be made that, as younger women's labour force participation increases, their occupational superannuation coverage will increase, and so their economic provisions for retirement will be assured. The life patterns of Australian women are clearly changing. Those currently in the aged population spent less time in paid employment when they were younger than those women who are now in the prime working ages. Amongst the youngest age cohort of women studied there appears to be a delay in the age at marriage and the age at which they have their first child, and most expect completed family size to be smaller than it was for the older cohorts. These changes imply that younger age cohorts may have significantly longer periods of employment in their 20's prior to having children, over which time superannuation entitlements might be accumulated. The majority of women still expect to withdraw from the labour force for several years when their children are young, and then return to part-time and/or casual work until childcare responsibilities cease. This employment pattern may persist for a ten to fifteen year period or even permanently. Most superannuation schemes exclude casual workers from membership and, only since August 1989, have been required to offer part-time workers access to superannuation if it is available to full-time workers. Many women do not expect to return to full-time, stable employment until they are well into their forties, if in fact they ever do. The expectation, and often compulsion, for women in Australia is to retire at age 60. In fact only 3% of our sample had continued, or planned to continue in paid employment past age 60. This low figure was remarkably consistent across age cohorts and occupational
290
LINDAS. ROSENMANAND SHARONWINOCUR
statuses. Given these patterns of delayed re-entry into the labour market, substantial if not permanent periods of part-time work, and expected early retirement at age 60 or younger, it appears unlikely that many women will be in a position to accumulate significant amounts of tax-subsidized retirement savings through superannuation. Much of the problem lies with the character of occupational superannuation schemes. These schemes are designed to 'reward' loyal employees, and fit the traditional pattern of male working lives, namely continuous, full-time, paid employment throughout life, whith retirement at a fixed age. Workers who do not conform to this pattern have either been explicitly excluded from schemes, or exclude themselves by not joining, since they do not expect to adhere to this pattern throughout their working lives. Government regulation of superannuation schemes to meet social and policy goals is only just beginning in Australia. New regulations require part-time workers to be allowed to join schemes, and to allow accrued benefits to be preserved for retirement should a worker leave an employer. Standards for vesting of employer contributions have not yet been established. This, together with a campaign to educate women about superannuation, and to encourage them to plan for their own retirement, have been foreshadowed as goals of policy development. The problem of women's low income retirement cannot be resolved simply by encouraging and enabling women to join occupational superannuation schemes. It is clear from the data presented above that any system in which retirement income is linked to employment and earnings through contributions made during working life will maintain women in relative poverty in old age due to their low levels of earnings and the discontinuous periods of employment over which benefits can be accumulated. Without some attention to these issues, future generations of older women in Australia are likely to remain economically disadvantaged in old age. ACKNOWLEDGEMENTS The research on which this paper is based was supported by grants from: The University of Queensland; Office of Status of Women, Department of Prime Minister & Cabinet; Australian Mutual Provident Society; and National Mutual Life Association-Australia Pty Ltd. REFERENCES Australian Bureau of Statistics 1988 Marriages Australia 1987. Cat. No. 3306.0, A.B.S.: Canberra. Foster, C. 1988 Towards a National Retirement Incomes Policy. Social Security Review, Issues Paper, No. 6. Canberra: Department of Social Security. Glezer, H. 1989 Mothers in Workforce. Family Matters, Australian Institute of Family Studies Newsletter 21:30-34. Henderson, R. 1977 Criteria for Welfare, News or Eamings? Australian Journal of Social
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Issues 12(2):100-109. Howe, Brian, Minister for Social Security, August 1989 Better Incomes: Retirement Incomes Policy into the Next Century. Canberra: Australian Government Publishing Service. Manning, I.A. and King, S.A. 1988 Income and Housing Costs of Older Australians. Social Security Review, Background Discussion Paper No. 26. Canberra: Department of Social Security. Perry, J. 1988 Income Support for Older Women. Social Security Review, Background/Discussion Paper, No. 27. Canberra: Department of Social Security. Rosenman, L. and Leeds, M. 1984 Women and the Australian Retirement Age Income System. Reports and Proceedings No. 42. Sydney: Social Welfare Research Centre, University of New South Wales. Rosenman, L. and Winocur, S. 1989 Australian Women and Economic Security: A Research Report. Brisbane: The University of Queensland & Canberra: Office of the Status of Women, Department of Prime Minister and Cabinet. LINDA S. ROSENMAN
Social Work Department The University of Queensland St. Lucia, Queensland 4067 Australia SHARON WINOCUR
Office of Equal Opportunity The University of Queensland St. Lucia, Queensland 4067 Australia
AUSTRALIAN WOMEN AND INCOME SECURITY FOR OLD AGE: A COHORT STUDY
ABSTRACT. Australian women constitute a majority of the aged population in Australia, and are more likely than men to be single in old age as well as dependent upon the means-tested Age Pension with no, or only limited, income supplementation from other sources such as occupational superannuation. Based upon research on a national sample of 1016 Australian women, aged across the adult life span, this paper reports age cohort patterns of work, family, and economic expectations for old age. While work and family patterns of Australian women are changing, the clear trend remains towards labour force withdrawal and part-time work for long periods while children are present in the home. The implications of these patterns for income security in old age are discussed. K e y W o r d s : aged women, income security, age cohorts, Australian women, aged income
security, f'mancial planning, women's work patterns, family patterns Despite the image of a young country, Australia like m o s t other countries is now experiencing a gradually aging population. This is forcing a major review and re-analysis of the economic position and social well-being of current and of future generations of old people. In the light of this, social and economic policies are also being reexamined. The population trends in Australia are similar to those of m a n y other countries. In 1986 people aged over 60 represented 15% of the population, by 2025 they are expected to comprise 16.1%, a percentage already reached in some European countries. In common with many other countries, the gender composition of the aged population is predominantly female. As the population ages, it becomes increasingly female due to the lower male life expectancy, as well as increasingly single, due to the tendency of women to marry older men. This feminization of the aged population has major implications for the economic and social well-being of the older population. Yet the situations of older women have tended, until very recently, to be overlooked in Australian social research and social policy. This paper will explore socially and economically based factors relevant to the current and future well-being of old people in Australian society, with particular focus upon women. It is based upon research carried out on a national sample of Australian women aged 18 and older. A n understanding of the economic situation of older women requires an appreciation of the Australian income security system for old age, and its relationship to the labour force. THE AUSTRALIAN RETIREMENT INCOME SYSTEM The Age Pension is the national retirement income system in Australia. This Pension scheme, administered through the Commonwealth Department of Social Security, is unusual amongst OECD countries in that, since its inception, it has Journal of Cross-Cultural Gerontology 5: 277-291, 1990. © 1990Kluwer Academic Publishers. Printed in the Netherlands.
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LINDA S. ROSENMAN AND SHARON WINOCUR
been a non-contributory, means-tested scheme rather than being a social insurance system in which income in retirement is in some way linked to earnings during working life. Receipt of the Age Pension is subject to income and assets tests. It is paid at a full rate of $6,461.00 p.a. (1989) for a single person, and $10,769.00 p.a. for married couples, and is withdrawn at the rate of $1.00 for every $.50 in other income. A partial pension is payable up to an income level of $15,002.00 p.a. for a single person, and $25,178.00 p.a. for a married couple. The Age Pension has the goal of ensuring a guaranteed level of income security for the aged, single parents, the disabled, and veterans and certain other categories of people within the Australian population. The income maintenance function of retirement incomes policy has been predominantly met through the private contributory superannuation system. This system, the equivalent of employer pensions in the U.S.A., is organized through a person's paid employment and is now a part of employment contracts negotiated by unions. Participating employers, the superannuation funds, and superannuation recipients enjoy generous tax concessions from the government, which are intended to encourage the spread of superannuation. In common with the private occupational pension systems of most countries, occupational superannuation payouts at retirement are a direct function of earnings-linked contributions made during working life. An important characteristic of retirement incomes policy in Australian society is the existence of mandatory retirement ages for most men (age 65) and women (age 60), on reaching which they are expected to cease paid employment entirely. These ages correspond to those at which people become eligible for the Age Pension. During the past decade there has been a clear trend to early retirement in Australia which has meant that many workers are leaving the permanent workforce earlier than the normal retirement age. Some Australian states, and the Australian Government, have now foreshadowed age discrimination legislation and the introduction of a more flexible approach to retirement. When, and if, this occurs, major attitudinal change will also be necessary to encourage workers and employers to continue employment beyond age 60 or 65. The response to the growth in the absolute size of the aged population, and the recognition of the possible implications for government fiscal policy of a substantial growth in Age Pension commitments, has been an increased emphasis upon self provision for retirement through occupational superannuation. Despite the commitment of the current government to the maintenance of an adequate Age Pension (Howe 1989), it is likely that in the future the noncontributory Age Pension will provide only for a minimum floor income security, while savings through occupational superannuation are expected to provide an increasingly larger proportion of the retirement incomes of most Australians. This circumstance would have major implications for the economic status in retirement of those whose occupational superannuation entitlements in their own
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279
rights are limited or non-existent. These are predominantly people who for the majority of their lives have not been members of the paid workforce, those whose paid employment has been discontinuous or limited, and whose earnings have been correspondingly low. The majority of these are, and will continue to be, women. THE ECONOMIC SITUATION OF OLDER WOMEN There has been relatively little research in Australia that focuses upon the economic situation of the older population and almost none that specifically targets women. Research undertaken by the Australian Government Commission of Enquiry into Poverty (Henderson 1977:100-109) found that the aged made up the majority of recipients of government income security benefits, and that people who were dependent upon the Age Pension were amongst the poorest of the poor. Since this research was carded out economic and social changes have led to other groups, particularly single women with dependent children, replacing the aged as the most economically disadvantaged. Recent analyses of the income of the aged indicate that income differentials in old age are most marked between married and single income units, with married couples having more sources, and higher amounts, of income than single women and men (Manning and King 1988). The current generation of older Australian women is much more likely than older men to be living alone and to be living on very limited incomes. By all indicators of social need, older women are clearly disadvantaged. Women are more likely to be living on the Age Pension with very little or no other sources of income such as that generated by occupational superannuation, private pension plans, savings, or investments. (Rosenman and Leeds 1984). The figures in Table I are cross-sectional, representing data on four older cohorts of the population, and therefore do not show the numbers who rely upon the Age Pension at any given age. When the figures on receipt of the Age, Widows or Invalid Pensions, and Sickness and Unemployment Benefits are considered in conjunction with population statistics, it appears that the majority of women can expect to spend some part of their old age single, primarily due to death of a spouse. Consequently, women are much more likely than men to be living on the single Age Pension. Secondly, due to their greater life expectancies and lower pensionable age, women are likely to spend a longer period of their lives living on the Age Pension than are men. It is possible that some of this dependence upon the Age Pension is a cohort phenomenon that reflects limited opportunities to save for retirement during working life both due to prevailing economic conditions (Great Depression, World War II) and the absence of instruments such as superannuation that would encourage saving for retirement. In Australia, occupational superannuation as a tax advantaged form of saving for old age has become more widely available only during the past decade. As subsequent generations of Australians who have been beneficiaries of the
280
LINDA S. ROSENMANAND SHARONWINOCUR TABLE I Mean percentage of income received from different sources by age cohort, gender, and marital status
Source
Age 55-59
60--64
65-69
70+
23 6 16 54 1
48 10 21 21 0
62 12 23 3 0
100 219
100 194
100 143
55-59
60--64
65-69
70+
33 3 9 54 1
49 6 27 18 0
70 7 19 2 1
68 9 23 0 0
TOTAL AVERAGE INCOME ($A/week)
100 202
100 135
100 140
100 106
Source
Age of husband
SINGLE MEN Pensions and benefits Superannuation pension Asset incomesa Employment Other
Percentages 7 1 11 80 1
TOTAL AVERAGE INCOME ($A/week)
100 324
Source
Age
SINGLE WOMEN Pensions and benefits Superannuation pension Asset incomes Employment Other
COUPLES Pensions and benefits Superannuation pension Asset incomes Employment Other TOTAL AVERAGE INCOME ($A/week)
55-59
60--64
65--69
70+
6 4 11 78 1
19 6 22 52 2
49 10 25 16 1
55 8 29 8 0
100 519
100 402
100 278
100 260
Source: Australian Bureau of Statistics 1986 Income Distrubition Survey, unit record tape (Foster 1988, 23). Note: In August 1989, $A1 was equivalent to $US 0.75. a Does not include imputed income from value of own home.
AUSTRALIANWOMENAND INCOMESECURITYFOR OLD AGE
281
long postwar economic boom enter the retirement ranks, their assets, life savings and superannuation accounts are more likely to provide supplements or alternatives to the Age Pension. The expectation appears to be that as women's rates of labour force participation increase, their opportunities to save for retirement, especially through superannuation, will correspondingly grow. They will then be in a better position to plan for retirement with supplemental or alternative sources of income to the Age Pension. The lifetime patterns of employment, family, and the links to retirement income planning of Australian women were the focus of a research project conducted by the authors on Women and Economic Security (Rosenman and Winocur 1989). Analysis of these patterns has major implications for the economic status of current and future generations of older women, since the income of most women in old age reflects marriage and family-linked economic decisions made during earlier life. For the purposes of retirement incomes policy age cohort patterns are important, since age is the primary eligibility criterion for public and private retirement incomes programs. Retirement incomes policy must be developed with reference to the living situations of those who are currently of retirement age (60+) and to the expected patterns of those who are not yet aged. METHOD The authors' project was designed to collect data on women's past and future, expected patterns of marriage, family, work and retirement, their attitudes and actions in relation to financial planning and their intentions with respect to their own future financial security. Age cohort differences were a particular focus of the research. An interview survey was carried out in conjunction with the Morgan Gallup Survey of Consumer Opinion Trends, a weekly Australia-wide survey of men and women. A large specially designed set of questions was added to two weekly surveys. National probability samples of 680 Australian women (aged 16 and over) and 333 women (aged 40 and over) were interviewed in March and in April, 1988. The second sample was drawn to ensure an adequate representation of older women. Data were analyzed by 10 year age cohorts and also by life cycle cohorts more closely matching reported family stages. For this paper the youngest age cohort (27 women under age 20) was excluded from the analysis. This paper analyzes a subset of the data to answer the following questions. (I) (2) (3)
What are the family and work-life patterns of Australian Women? How do these vary amongst different age cohorts? How do women plan to manage their income for, and in retirement?
The answers to these questions are then considered in terms of implications for retirement incomes policy.
282
LINDA S. ROSENMANAND SHARON WINOCUR RESULTS
Life Patterns Australian women exhibit high rates of marriage and childbearing, particularly in comparison with women in other similar western countries (e.g., U.S.A. and Britain), and much lower rates of labour force participation. The latter is beginning to change, especially amongst the younger age cohorts. It is instructive therefore to compare the experience of different age cohorts, summarized in Tables II and IlL TABLE II Marital and family experience of sample by age Experience
N
Age
Total
20-29 30-39 (25-29) a
40--49
50-59
60-69
70+
N
144
201
186
151
106
986
198
%
( ) Marital Never married
Percentages 40
8
2
3
4
5
93
9
75
72
70
61
36
625
63
18
26
26
35
59
268
27
7 1
13 2
10 8
3 21
1 54
74 109
7 11
47 (70)
86
97
92
84
83
808
92
33
47
61
57
49
39
497
50
(14) Once married and still married
50 (77)
Has been divorced, separated or widowed 10 Now divorced/ separated 6 Now widowed 1
Childbearing Had children
Had children before age 25
(44) Modal number of children
0(53%)
2(37%)
2(32%)
4(29%)
a Numbers in parentheses refer to 25-29 age group only.
4(34%)
2(32%)
2
(27%)
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AUSTRALIANWOMENAND INCOME SECURITYFOR OLD AGE TABLE III Work force experience of sample by age Experience
Age
Total
20-29
30-39
40-49
50-59
60--69
70+
N
144
198
201
186
151
106
986
N
%
Percentages
Laborforce 5
0
1
4
6
18
46
5
Never dropped out
19
3
3
5
3
2
55
6
Dropped out of labor force for any reason
76
96
95
91
91
80
885
90
Dropped out for childbearing or child care
37
77
76
54
42
22
553
55
Will be/were out of work force for 10 years or more for childreafingI
5
23
40
48
42
70
190
34
Full-time work
43
25
28
20
3
0
232
24
Part-time work
10
32
25
17
6
2
191
19
Home duties
35
39
41
49
59
58
450
46
1
0
2
11
32
40
113
12
Never worked
Current work status
Retired
1 Includes those who did not/will not return to work after having children.
Women Aged 60 and Over Amongst the two age cohorts above 60, only 5% had never married. The relatively large percentage of older women who had married but not had children is a reflection of the impact of the Depression and the Second World War which in all likelihood caused an initial postponement of childbearing that ultimately became permanent for some women. There were very few respondents in this age cohort, or any other but the youngest cohort, who had been in the labor force but not withdrawn from it at some time during their adult lives. The cohort aged over 70 had the highest
284
LINDAS. ROSENMANAND SHARONWINOCUR
percentage of women (18%) who reported never having worked in paid employment at all. The majority of women in this particular age cohort had withdrawn from the labour force either following their marriage (31%), or when they had had children (22%). Of those who had withdrawn, the majority never retumed to paid employment, the remainder who did return to work did so after a long period (10 years or more) out of the work force. The pattern for women in the 60-69 cohort is similar, although a lower proportion of the latter never worked (6%) or were out of the work force for ten years or more, or never returned to work (42%), than amongst the oldest group. Amongst the majority of those women currently in the aged population, labour force attachment was therefore limited and was characterized by long periods out of the work force. Consequently it is likely that few were in a position to make financial provision for their own old age and most probably had to depend upon provision made by a spouse and/or their own right to the pension. Amongst the oldest age cohort (70+), prior superannuation scheme membership by a spouse was also quite limited. Asset accumulation in the forms of home ownership and some savings were relatively common amongst married couples; however, they were less common amongst single and widowed women. The majority of older women (60+) at the time of interview were dependent completely (60--69: 41%; 70+: 45%) or in large part (60--69: 23%; 70+: 26%) upon a social security pension. The oldest age cohort (70+) had the highest proportion totally dependent upon a pension. Those women who were no longer married or never had been, were the most likely of all to be dependent upon the Age Pension (80%). This is consistent with other research (Table I) that indicates that in general married couples have more income and more diverse sources of income than do the non-married, particularly non-married (mainly widowed) women. This may be a cohort phenomenon reflecting the previous lack of retirement savings opportunities available to older Australians, or it may imply that, despite the societal expectation that men will make provision for a surviving spouse many, for whatever reason, could not or did not, particularly amongst the two oldest age cohorts.
Women Aged 40-59 The life patterns of these two age cohorts were somewhat different from those of the oldest cohorts, reflecting changes in both marriage and childbearing patterns and in labour force participation rates. Age at marriage and at the birth of the first child appeared to be lower. The percentage of women who had begun to have children by age 25 peaked at 61% in the 40-49 cohort although the modal number of children peaked at four in the 50-59 and 60-69 cohorts. Rates of labour force participation are higher, with 37% of the 50-59 age cohort, and 52% of the 40--49 age group in the labour force (full- or part-time) at the time of the interview. The majority had dropped out of the workforce to rear their children, many for 10 years or more. The majority had gone back to work,
AUSTRALIANWOMENAND INCOMESECURITYFOR OI~DAGE
285
initially on a part time basis, and approximately 50% planned to remain in parttime work rather than increasing to full-time. The growth in availability of part-time work has been one of the characteristics of the Australian labour market during the past decade, and may be one of the main reasons for the marked increase in female labour force participation during this period. Another study has confirmed a marked preference among women for parttime work (Glezer 1989), finding that around three-quarters of women in either full- or part-time work would prefer to work part-time. There is considerable debate about the merits and demerits of the increasing 'casualization' of the workforce, particularly for women, as they make up most of the part-time labour force and therefore are most affected. Although part-time work allows women to adjust their work-lives to accommodate family responsibilities, it also has serious drawbacks. Since permanent part-time work is relatively rare, most casual workers miss out on normal wage-related benefits such as special leave provisions and occupational superannuation. Therefore limited access to superannuation combined with generally low eamings for most women continues to limit their ability to save for retirement. The Commonwealth government Retirement Incomes Policy (Howe 1989) proposes that part-time workers be eligible for superannuation scheme membership if it is available to full-time employees.
Women Aged 20-39 The most evident trend in this age cohort is the marked increase in the proportion of women who marry during their twenties. By subdividing these cohorts in smaller groups, it becomes clear that the significant shift from single to married status occurs in the 25-29 age group; only 34% of those under 25 being married compared to 77% of those over 25. These data suggest that women are currently marrying later, as is also suggested by Australian Bureau of Statistics figures which show a gradual increase in the median age of women at first marriage from 21.1 in 1971 to 23.8 in 1987 (ABS 1987). This change is associated with a delay in the birth of the first child. Among those in the 20-29 age group, only 33% had had their first child by the time they were 25, a lower percentage than for any other age group including those aged over 70. The rate of labour force participation amongst women aged 20-29 equals that of women aged 40--49 at 53%. However, participation in full-time work peaks in the 20-29 age group (43%), and drops to 25% between 30 and 39. Part-time work participation exhibits an opposite trend: 10% of 20-29 cohort and 32% of the 30-39 cohort were working part-time. These work force participation trends may be explained by patterns of childbearing. Within the 20-29 year age group, 19% of the 20-24 year group had dropped out for childbearing and child care while 56% of the 25-29 year group had done so. For the 30-39 year group, three-quarters of the women had withdrawn from employment although some of these had returned to part-time
286
LINDAS. ROSENMANAND SHARONWINOCUR
work. Forty-seven percent of the women in the 30-39 age cohort had been out of the workforce for 5 or more years, while 23% of this group had stayed out for 10 years or more, or expected to do so. Overall, women report extremely low earnings. In every age cohort the median earnings for both full- and part-time workers are under $20,000 annually, and the majority earned under $30,000. Only amongst the 40-49 age group are there any significant proportions (27%) earning over $30,000 a year, the income at which women might conceivably be able to save privately for retirement, and/or be in jobs carrying employer-subsidized occupational superannuation.
Superannuation Scheme Membership The economic impact of discontinuous working patterns is clear when women's membership of superannuation schemes is considered. As shown in Table IV, overall, 35% of employed women in the sample reported belonging to a superannuation scheme. Superannuation scheme membership peaked amongst working women in the 40-49 cohort. However, when it is considered that only 43% of women in the sample were employed, the percentage of all women who were currently in a superannuation scheme, let alone had a superannuation benefit preserved for retirement at age 55 or over, was much lower - only 15%. Amongst those women who belonged to superannuation schemes, wages were generally extremely low. Eighty percent reported earnings below $30,000 annually, and 47% less than $20,000 a year. Their final benefits, which are usually earnings linked, would therefore be correspondingly low. Women's reasons for not joining superannuation schemes also reflected their labour force status and perhaps, as importantly, their expectations about their lifetime labour force participation. Table V indicates the major reasons given by women for not joining a superannuation scheme. The most frequent reason given was that no scheme had been available where or when they were employed or, if a scheme had been available, that their employment status (usually part-time or casual) had excluded them from eligibility. However, over one quarter (26%) had decided not to join a scheme when one had been available. The reasons most commonly given for not doing this were firstly, that they could not afford the payroll deductions and secondly, that they did not expect to remain with the same employer permanently, and therefore that it did not pay to join. A substantial number also lacked knowledge or information about superannuation and so did not, or had not, joined a scheme. There appear to be some age related patterns to the reasons for not belonging to a scheme. A higher percentage of women aged over 50 reported not belonging to superannuation because it was not, or had not been, available to them while a slightly higher percentage of women under 50 reported either a lack of eligibility, due to their work status and/or deciding not to join, although they were eligible, because they could not afford the contributions or did not plan to stay with the same employer.
287
AUSTRALIANWOMEN AND INCOME SECURITYFOR OLD AGE TABLE IV Superannuation coverage by age
Total
Age 20-29
30-39
40-49
50-59
60-64
Percentages (N) Percent of employed women with coverage in own right Number of employed women
39% (76)
32% (114)
44% (109)
36% (69)
13% (13)
35% (140)
Percent of married women whose husbands have superannuation Number of married women
33% (69)
64% (140)
62% (125)
38% (121)
13% (107)
50% (562)
Percent of total women with superannuation coverage Number of women
23% (144)
20% (198)
24% (201)
16% (186)
15% (151)
15% (983)
TABLE V Reasons for not joining a superannuation scheme by agea Experience
Total N
Age 20-29
30-39
40---49 50-59
60--69
81
104
97
28
8
387
Reasons Superannuation not available Eligible but did not join Not eligible Didn't get around to it
Total
69
70+
N
%
Percentages
22
30
27
43
46
31
121
31
35 22
25 30
30 25
17 17
14 14
0 37
99 92
26 24
21
15
19
22
25
25
75
19
a Base is ever employed women who did not have superannuation coverage. These age related patterns of superannuation scheme membership reflect the relative recency of superannuation as a fringe benefit for Australian workers. W o m e n ' s preference for part-time and casual work, their low wages, and their expected lifetime employment pattems either exclude them, or encourage them
288
LINDA S. ROSENMAN AND SHARON WINOCUR
to exclude themselves, from superannuation schemes as these are currently designed.
Financial Plans for Retirement W e have seen that the current generation o f older women is heavily dependent upon the A g e Pension (Table I). The findings o f our project however indicate a gradual shift between age cohorts in w o m e n ' s expectations about how they will manage financially in retirement. It is clear from Table VI that there is a difference in financial expectations between those who are currently sixty or older and the younger population. Higher percentages o f women who were still below retirement age expected to have non-Age Pension sources, including superannuation, savings and investments, available for economic support in retirement. Those in the age cohort approaching retirement age (50-59) were more likely to see the A g e Pension in combination with other sources as they way they would manage in retirement. A m o n g s t the older cohorts (60+), partial or total dependence upon the A g e Pension was for most, o f course, already a reality.
TABLE VI Ways of managing financially in retirement by age Experience
Age 20-29
30-39
40-49
Total 50-59
60-69
70+
N
%
Percenmges Age pension alone Superannuation alonea Age pension + other sources b Superannuation + other sources Never thought about it/don't know
16
10
16
27
41
45
233
24
16
31
28
20
13
7
205
21
15
20
22
25
23
26
213
22
30
27
26
23
20
13
237
24
23
12
8
6
3
10
98
10
144
198
201
186
151
106
986
a Superannuation includes lump sum and annuities. b Other sources includes savings, insurance, annuities, interest and dividends, employment.
AUSTRALIANWOMENAND INCOMESECURITYFOR OLD AGE
289
Considering the relatively low rates o f superannuation scheme membership amongst even the younger age cohorts, it is unlikely that many of the respondents anticipated surviving beyond 60 on their own occupational superannuation. The majority still expected that their husbands would do the planning, and provide the resources to enable them to maintain their living standards into retirement. Australian women, especially those aged over 45, saw it as being a man's responsibility to plan for his wife's future. The extent to which husbands do, or are able to do so, particularly once they have departed the scene, is questionable. Eighty-eight percent of widowed women, and 65% of the divorced women, reported being dependent upon an Age Pension or other government benefit for their income. IMPLICATIONS OF FINDINGS FOR WOMEN'S ECONOMIC SECURITY The demographic projections of both the absolute numbers and the relative size of the aged population in future decades has led to a concem in Australia about meeting Age Pension commitments in future years. Australian government policy has explicitly begun to encourage self-provision for retirement, especially through the tax advantaged occupational superannuation system (Howe 1989). While it is recognized that current generations of older women are very dependent upon the Age Pension, the assumption tends to be made that, as younger women's labour force participation increases, their occupational superannuation coverage will increase, and so their economic provisions for retirement will be assured. The life patterns of Australian women are clearly changing. Those currently in the aged population spent less time in paid employment when they were younger than those women who are now in the prime working ages. Amongst the youngest age cohort of women studied there appears to be a delay in the age at marriage and the age at which they have their first child, and most expect completed family size to be smaller than it was for the older cohorts. These changes imply that younger age cohorts may have significantly longer periods of employment in their 20's prior to having children, over which time superannuation entitlements might be accumulated. The majority of women still expect to withdraw from the labour force for several years when their children are young, and then return to part-time and/or casual work until childcare responsibilities cease. This employment pattern may persist for a ten to fifteen year period or even permanently. Most superannuation schemes exclude casual workers from membership and, only since August 1989, have been required to offer part-time workers access to superannuation if it is available to full-time workers. Many women do not expect to return to full-time, stable employment until they are well into their forties, if in fact they ever do. The expectation, and often compulsion, for women in Australia is to retire at age 60. In fact only 3% of our sample had continued, or planned to continue in paid employment past age 60. This low figure was remarkably consistent across age cohorts and occupational
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statuses. Given these patterns of delayed re-entry into the labour market, substantial if not permanent periods of part-time work, and expected early retirement at age 60 or younger, it appears unlikely that many women will be in a position to accumulate significant amounts of tax-subsidized retirement savings through superannuation. Much of the problem lies with the character of occupational superannuation schemes. These schemes are designed to 'reward' loyal employees, and fit the traditional pattern of male working lives, namely continuous, full-time, paid employment throughout life, whith retirement at a fixed age. Workers who do not conform to this pattern have either been explicitly excluded from schemes, or exclude themselves by not joining, since they do not expect to adhere to this pattern throughout their working lives. Government regulation of superannuation schemes to meet social and policy goals is only just beginning in Australia. New regulations require part-time workers to be allowed to join schemes, and to allow accrued benefits to be preserved for retirement should a worker leave an employer. Standards for vesting of employer contributions have not yet been established. This, together with a campaign to educate women about superannuation, and to encourage them to plan for their own retirement, have been foreshadowed as goals of policy development. The problem of women's low income retirement cannot be resolved simply by encouraging and enabling women to join occupational superannuation schemes. It is clear from the data presented above that any system in which retirement income is linked to employment and earnings through contributions made during working life will maintain women in relative poverty in old age due to their low levels of earnings and the discontinuous periods of employment over which benefits can be accumulated. Without some attention to these issues, future generations of older women in Australia are likely to remain economically disadvantaged in old age. ACKNOWLEDGEMENTS The research on which this paper is based was supported by grants from: The University of Queensland; Office of Status of Women, Department of Prime Minister & Cabinet; Australian Mutual Provident Society; and National Mutual Life Association-Australia Pty Ltd. REFERENCES Australian Bureau of Statistics 1988 Marriages Australia 1987. Cat. No. 3306.0, A.B.S.: Canberra. Foster, C. 1988 Towards a National Retirement Incomes Policy. Social Security Review, Issues Paper, No. 6. Canberra: Department of Social Security. Glezer, H. 1989 Mothers in Workforce. Family Matters, Australian Institute of Family Studies Newsletter 21:30-34. Henderson, R. 1977 Criteria for Welfare, News or Eamings? Australian Journal of Social
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Issues 12(2):100-109. Howe, Brian, Minister for Social Security, August 1989 Better Incomes: Retirement Incomes Policy into the Next Century. Canberra: Australian Government Publishing Service. Manning, I.A. and King, S.A. 1988 Income and Housing Costs of Older Australians. Social Security Review, Background Discussion Paper No. 26. Canberra: Department of Social Security. Perry, J. 1988 Income Support for Older Women. Social Security Review, Background/Discussion Paper, No. 27. Canberra: Department of Social Security. Rosenman, L. and Leeds, M. 1984 Women and the Australian Retirement Age Income System. Reports and Proceedings No. 42. Sydney: Social Welfare Research Centre, University of New South Wales. Rosenman, L. and Winocur, S. 1989 Australian Women and Economic Security: A Research Report. Brisbane: The University of Queensland & Canberra: Office of the Status of Women, Department of Prime Minister and Cabinet. LINDA S. ROSENMAN
Social Work Department The University of Queensland St. Lucia, Queensland 4067 Australia SHARON WINOCUR
Office of Equal Opportunity The University of Queensland St. Lucia, Queensland 4067 Australia
