The gender super gap for NSW working mothers is getting worse as both major political parties sit on their hands and won’t commit to paying super on the government parental leave scheme.
Since 2013 the gender super gap between men and women in their 30s has got worse, showing it is still mums who pay the price for having children.
NSW women aged between 30-34 have 16% less super than men, an increase of 5% in just six years. For women in their late 30s the gap also increased by 2% from 2013-14 to be 18% in 2018-19 (see table 1).
A man in his early 30s has $8,000 more super than 2013, a woman just $5,000 more (see table 2).
Overall, there is little progress being made with the super gender gap, with the median super balance of NSW women 21% less than a men’s in 2018-19, a drop of 4% from 2013-14.
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% compared to just 0.5% 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.
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. 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.
Comments attributable to Industry Super Australia Advocacy Director Georgia Brumby:
“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.”
“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.”
“Working mums should not be left behind for having a baby, it’s time to end this tax on pregnancy.”
Table 1: Change in NSW gender gap of median super balances by age groups:
Age | 2013-14 gender gap | 2018-19 gender gap | Change |
20 to 24 | 11% | 10% | -1% |
25 to 29 | 6% | 0% | -6% |
30 to 34 | 11% | 16% | +5% |
35 to 39 | 16% | 18% | +2% |
40 to 44 | 33% | 26% | -7% |
45 to 49 | 39% | 29% | -10% |
50 to 54 | 35% | 33% | -2% |
55 to 59 | 38% | 31% | -7% |
60 to 64 | 21% | 20% | -1% |
All Ages | 25% | 21% | -4% |
Source: ISA analysis of ATO 2% sample file from 2013-14 to 2018-19
Table 2: Median super balances in NSW 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 | $6,260 | $5,583 | $6,935 | $6,233 |
25 to 29 | $18,607 | $17,497 | $20,308 | $20,238 |
30 to 34 | $36,510 | $32,412 | $44,806 | $37,758 |
35 to 39 | $56,820 | $47,625 | $71,527 | $58,629 |
40 to 44 | $78,505 | $52,256 | $103,600 | $77,118 |
45 to 49 | $96,942 | $59,261 | $134,250 | $95,543 |
50 to 54 | $111,339 | $71,935 | $156,247 | $105,032 |
55 to 59 | $138,215 | $85,776 | $182,802 | $125,466 |
60 to 64 | $147,404 | $116,693 | $193,503 | $154,625 |
All Ages | $50,849 | $38,372 | $62,171 | $48,808 |
Source: ISA analysis of ATO 2% sample file from 2013-14 to 2018-19
Table 3: Forgone super payments from super not being included in Commonwealth Paid Parental Leave from January 2011 until June 2021:
Applicants | Lost super ($M) | |
Females | 467,380 | $522.5 |
Males | 2,180 | $2.4 |
Persons | 469,570 | $524.9 |
Source: Department of Social Services data and ISA analysis
