A suggestion to help stay at home Mums taking time out from work by way of a “care credit” has been floated, as one idea to help close the gender pension gap.

Women get to retirement, on average, 18% worse off than men.

When you drill down on the numbers, the gap certainly is wide. More than twice as many women than men aged 65 and over were living in poverty, according to a University of Auckland research paper.

So would a care credit paid into their Kiwisaver account help make up some of the difference?

It’s something the interim retirement commissioner’s been asked to consider, as he conducts a three-yearly Review of Retirement Income Policies.

Women take time out of the workforce for lots of reasons, child care obviously, but for many Pasifika and Maori women, also to care for extended family and community.

Women are also often the main carers of elderly parents.

Add to that the gender pay gap, many in lesser paid roles, and it’s not surprising women reach retirement with less savings.  

Compounding things, women live longer than men so bear the expense of living for longer, and often they’re bearing that alone.

So could a Kiwisaver credit work as a solution here?

The interim retirement commissioner will obviously look at other examples of countries where women are compensated. Finland, Norway and Estonia each run reimbursement style schemes.

‘Estonia, pays employer contributions during childcare periods of up to three years per child. Norway credits individuals for periods of care work with approximately 71 per cent of the average full-time wage.

When women retire in Finland, their pension is topped up with contributions of up to three years per child.’ So could any of these international examples be applied in a New Zealand context?  

I absolutely think there’s merit in recognising women who step out of the workforce to do the very valuable job of caring and child rearing.

I’m not sure exactly how it could work best, but I do believe it’s worth looking at.

It seems wrong that women are financially vulnerable long term, purely because they care for others.

Many women don’t even get the choice they are the caregiver by default.

I believe caring should be rewarded and compensated, not penalised. The key though, is getting the model for that compensation, right.