Australia’s mothers have missed out on more than $1.6 billion in retirement savings because the government refuses to pay super on its parental leave scheme.
Up to 1.45 million mothers have received Commonwealth Parental Leave Pay in the last 10 years, but while they took time out of paid work to raise children, they sacrificed thousands in retirement savings. In the 2019–20 financial year alone, 170,860 women missed out on $216.7 million in super payments.
Parental leave is one of the only forms of paid leave that there is no requirement to pay super and the government does not pay the super guarantee on its scheme.
A new Industry Super Australia (ISA) report launched today by Workplace Gender Equality Agency director Libby Lyons found that paying super on parental leave would be a concrete step towards addressing the gender savings gap, which sees women near retirement have about a third less super than men.
ISA’s Paying Super on Parental Leave report calls on:
- The federal government to set an example and pay super on Commonwealth paid parental leave. Not paying super on its scheme costs a mother of two $14,000 from her final retirement savings.
- State and territory governments to pay all its staff super on paid parental leave. At least 400,000 state government-employed workers — most of whom are women — are missing out.
- More private companies to lead the way and pay super on their parental leave scheme. ISA analysis of enterprise agreements shows less than 7% include a provision to pay superannuation on paid parental leave. At least 2.3 million employees who are on workplace agreements are missing out.
If the government made a modest payment of super linked to the Commonwealth’s 18-week paid parental leave scheme — paid at minimum wage and available to most working mothers — it would be an important equity measure to ensure women’s savings keep pace and set the example to other employers.
Overwhelmingly, it is women that are missing out; 99.5% of the Commonwealth Parental Leave Pay applications are women and just 0.5% are men.
Up to 15,870 mums in the electorate of Lalor in Melbourne’s western suburbs lost $18 million in super, the most in the nation. In NSW, the most lost was in the Western Sydney electorate of Greenway.
A mother of two who received super on Commonwealth Parental Leave Pay and from their employer would have $26,500 more super at retirement.
“In Australia today, far too many women and men do not have access to paid parental leave which includes superannuation payments. This is having a detrimental financial impact on families, especially women, and is impeding our country’s economic growth,” Workplace Gender Equality Agency director Libby Lyons said.
“The government has the opportunity to heed the clear and compelling business case to lead by example and pay superannuation on its parental leave scheme, something smart employers are already doing. We must stop penalising Australian women and men for having children.”
Source : Mybusiness.com.au
