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Thursday, December 7, 2023

Gender super gap for NSW’s mums getting worse while politicians do nothing

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The gender superannuation gap for NSW working mothers is getting worse, according to Industry Super Australia (ISA), as both major political parties, it says, sit on their hands and won’t commit to paying super on the government parental leave scheme.

ISA says since 2013 the gender super gap between men and women in their 30s has got worse, showing it is still mothers who pay the price for having children.

NSW women aged between 30-34 have 16 per cent less super than men, an increase of 5 per cent in just six years.

For women in their late 30s the gap also increased by 2 per cent from 2013-14 to be 18 per cent in 2018-19 (see table 1).

Unless the major parties act, the savings of NSW mums will continue to go backwards, forcing them to pay a big future price for taking time out of the paid workforce to raise a family.

ISA advocacy director, Georgia Brumby

A man in his early 30s has $8000 more super than 2013, a woman just $5000 more (see table 2).

Overall, ISA, which manages collective programs on behalf of the 13 Industry SuperFunds, says there is little progress being made with the super gender gap, with the median super balance of NSW women 21 per cent less than a men’s in 2018-19, a drop of 4 per cent from 2013-14.

“Unless the major parties act, the savings of NSW mums will continue to go backwards, forcing them to pay a big future price for taking time out of the paid workforce to raise a family,” ISA advocacy director Georgia Brumby said.

“We fear at this election women’s future financial security is going to be sacrificed in the name of fiscal restraint, despite the modest super contributions being vital to a mum’s retirement savings.”

Table 1: Change in NSW gender gap of median super balances by age groups:

Source: ISA analysis of ATO 2% sample file from 2013-14 to 2018-19

The gender gap widening coinciding with the child-rearing years for many women highlights the need for super to be paid on the Commonwealth’s 18-week paid parental leave scheme, not paying super on taxpayer-funded parental leave places a penalty on mums’ savings that lasts decades.

Up to 467,000 NSW mothers have already missed out on almost $523 million in super contributions in the last 10 years. This super sting costs a mother of two up to $14,000 at retirement.

Overwhelmingly women take Commonwealth Parental Leave Pay – 99.5 per cent compared to just 0.5 per cent of men.

Compounding the problem is that employers do not need to pay super on parental leave, yet workers are paid super on most other types of leave.

A mother of two who received super on Commonwealth Parental Leave Pay and from their employer would have $26,500 more super at retirement.

“Working mums should not be left behind for having a baby, it’s time to end this tax on pregnancy,” Brumby said.

Table 2: Median super balances in NSW by age and sex in 2013-14 and 2018-19:

Promisingly the Workplace Gender Equality Agency found about 49 per cent of larger employers offer super on their parental leave scheme, but still far too few women are paid super while on parental leave.

It’s now time for the government to follow the example of almost half of Australia’s big employers and pay super on its scheme.

But with this new data showing gender gap for working mums getting worse too many women’s savings are going backwards when they take time out of the paid workforce to have children.

The government’s Retirement Income Review found the 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 – is an important step towards improving gender equity in retirement.

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