Working mums will lose thousands of dollars in retirement savings every year the federal government resists paying super on parental leave, new modelling shows.
The analysis by industry fund Hesta and Laneway Analytics estimates women have already missed out on more than $2.8 billion in super in the 12 years since Australia’s paid parental leave scheme was introduced.
Delaying the policy until July 2024 would put a $6000 dent in the retirement savings of a typical Hesta member who had a child in the previous financial year.
Ahead of International Women’s Day on Wednesday, Hesta chief executive Debby Blakey said women were still retiring with around a third less super than men.
“Failing to pay super on parental leave pay has seen working mums unfairly miss out on billions of dollars in super, and this research shows they’ll keep losing thousands of dollars in retirement savings each year this important equity reform is delayed,” Ms Blakey said.
“Our super system is one of the world’s best but clear, persisting gaps remain where millions of Australians, mainly women, are still falling through the cracks and not getting the full benefits of super.”
A vast majority of Hesta members surveyed last year supported paying super on parental leave and agreed changes were needed to boost women’s retirement savings.
“Not paying super on parental leave pay sends a message that unpaid caring work is undervalued when in reality this work is indispensable to our economy and the wellbeing of families,” Ms Blakey said.
“Nearly 80 per cent of our members are women who work mainly in caring roles that are typically lower paid, such as aged care and early childhood education. They shouldn’t be financially penalised at retirement after spending their lives looking after others.”
New laws boosting accessibility to paid parental leave and locking in an expansion of the scheme passed parliament on Monday.
The revamp combines two existing payments into a shared 20-week scheme, expands access and makes it easier for new fathers to obtain paid leave.
The amount of leave will progressively increase until it reaches 26 weeks in 2026.
Treasurer Jim Chalmers last week acknowledged the gender gap in retirement savings while announcing plans to increase the tax on high-end superannuation accounts.
“While it was the government’s intention to add super to the (paid parental) leave, it wasn’t something that was affordable at the moment,” he said.
(Australian Associated Press)