Northern Territory mothers have missed out on more than $16 million because the federal government refuses to pay super on its parental leave scheme.
Industry Super Australia analysis shows nearly 15,000 NT mothers have received Commonwealth Parental Leave Pay in the last 10 years. But none were paid super during their time out of work meaning their savings were falling behind.
In the 2019-20 financial year 1,655 NT women missed out on $2.1 million in super contributions.
In the Solomon electorate up to 8,930 women lost $10 million from their super and in Lingiari 5,660 working mums lost $6.3 million (see table 1).
Parental Leave is one of the only types of paid leave where there is no requirement to pay super and the government does not pay the super guarantee on its scheme. So, unless an employer voluntarily pays super on parental leave, working mothers’ savings fall behind.
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 equity measure to ensure women’s savings keep pace.
Missing years of super payments has a dramatic impact on a woman’s final balance. A woman who spends five years out of the paid workforce in their late 20s and early 30s could be almost $100,000 worse off by the time she retires.
NT women have almost 30% less super than men and without urgent policy action Territorian mothers are going to keep falling behind.
Government forecasts shows the gender super gap will span the next four decades at least, unless action is taken – paying super on parental leave is an important step towards bridging the gap.
One in three women retire with no super balance at all, according to a 2016 Senate report.
Comments attributable to Industry Super Australia Advocacy Director Georgia Brumby:
“NT women are being made to sacrifice their retirement savings to have children.”
“It’s hard enough trying to juggle work and raising a family – it’s not fair that thousands of NT women are also missing out on thousands from their super as well.”
“The government needs to fix this glaring inequity and take a positive step towards ending the gender super gap – otherwise we will continue to see too many women at risk of retiring into poverty.”
Table 1: NT Commonwealth Parental Leave Pay applicants January 2011 to June 2020
Lost super ($M)
Lost Super ($M)
Lost Super ($M)
Source: ISA analysis of department of social services data.