The gender super gap for working mothers is widening and without measures to address it in tonight’s Budget women will continue to be at risk of retiring into poverty for decades to come.
Since 2013 the gender super gap between men and women in their 30s has deteriorated (see table 1), showing it is still mums who pay the price for having children as too many do not get paid super on Commonwealth parental leave.
Women aged between 30-34 had 12% less super than men in 2013-14 but this has blown out to 17% by 2018-19 – men of that age have seen their super climb by $8,800 but women just $5,500 (see table 2).
Overall, there is little progress being made with the super gender gap, with the median super balance of women of all ages 26% less than a men’s in 2018-19, a drop of just 1% from 2013-14.
If the Budget does not include a measure to pay super on Commonwealth Parental Leave Pay the retirement savings of women in their 30s are going to keep drifting. The consequence of not acting now could be that future generations of women are retiring without adequate savings.
Paying super on government parental leave would add up to $14,000 to a working mums’ retirement balance.
In the last 10 years, up to 1.62 million working mothers have missed out on a total of $1.8 billion in super contributions. In the 2020-21 financial year alone, 168,170 women missed out on $216.4 million in super payments. (See table 3)
It is overwhelmingly women taking government parental leave – 99.5% women compared to just 0.5% 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.
Promisingly the Workplace Gender Equality Agency found about 49% 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.
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.
Comments attributable to Industry Super Australia Advocacy Director Georgia Brumby:
“These figures show mum’s retirement savings are going backwards, the government can help put a stop to this worrying trend by including a Budget measure to pay super on parental leave.”
“The time for the government to act to bridge the gender super gap is now, super on parental leave is a modest investment but a vital boost to the retirement savings of all mums.”
“Women should not be left behind for having a baby, it’s time to end this tax on mums and their future.”
Table 1: Change in gender gap of median super balances by age groups
Age | 2013-14 gender gap | 2018-19 gender gap | Change |
20 to 24 | 12% | 11% | -1% |
25 to 29 | 8% | 5% | -3% |
30 to 34 | 12% | 17% | +5% |
35 to 39 | 21% | 22% | +1% |
40 to 44 | 33% | 29% | -4% |
45 to 49 | 39% | 32% | -7% |
50 to 54 | 40% | 37% | -3% |
55 to 59 | 38% | 34% | -4% |
60 to 64 | 26% | 24% | -2% |
All Ages | 27% | 26% | -1% |
Source: ISA analysis of ATO 2% sample file from 2013-14 to 2018-19
Table 2: Median super balances by age and sex in 2013-14 and 2018-19:
Age | 2013-14 Median balances | 2018-19 Median balances | ||
Male | Female | Male | Female | |
20 to 24 | $6,797 | $5,956 | $7,149 | 6349 |
25 to 29 | $19,970 | $18,402 | $21,883 | 20875 |
30 to 34 | $38,003 | $33,338 | $46,861 | 38894 |
35 to 39 | $58,156 | $45,767 | $75,503 | 58865 |
40 to 44 | $76,871 | $51,766 | $104,359 | 74456 |
45 to 49 | $95,132 | $58,221 | $135,542 | 91626 |
50 to 54 | $112,557 | $67,260 | $164,079 | 102999 |
55 to 59 | $138,684 | $85,704 | $187,557 | 123221 |
60 to 64 | $158,227 | $116,311 | $209,719 | 159255 |
All Ages | $51,826 | $37,907 | $66,872 | 49308 |
Source: ISA analysis of ATO 2% sample file from 2013-14 to 2018-19
Table 3: Forgone super payments from super not being included in Commonwealth Paid Parental Leave:
January 2011 to June 2021 | 2020-21 | |||
Applicants | Lost super ($M) | Applicants | Lost Super ($M) | |
Females | 1,619,470 | 1,857 | 168,170 | 233.9 |
Males | 8,150 | 9.3 | 850 | 1.2 |
Persons | 1,627,630 | 1,867 | 169,030 | 235.1 |
Source: Department of Social Services data and ISA analysis
