A more secure retirement for ‘super-mums’
Historic reforms to pay super on Government paid parental leave have passed the Senate with cross-party support – clearing the way to boost a mother-of-two’s retirement savings by about $14,500.
Around 180,000 Australian families will benefit each year from the new laws – with the lion’s share of benefits flowing to working mums who would otherwise have missed out on super contributions.
Adding super to parental leave will make a big difference to help narrow the gender super gap which currently leaves women with around $50,000 than men as they near retirement (see table 1).
Super Members Council CEO Misha Schubert thanked all Senators who voted for the momentous legislation, which enables super payments for working mums to start from July 1 next year.
“This historic reform will make a big difference to the lives and retirement incomes of generations of Australian women – and we thank all Senators who supported the legislation,” Ms Schubert said.
“It will powerfully propel Australia closer toward ending the financial ‘motherhood penalty’ in the early years of having children – which has a compounding effect across women’s working lives.”
“Australia must continue to make major strides to ensure all women can have a secure retirement.”
Proposed amendments for mothers to be asked to raid their retirement savings and cash out their super to meet daily living costs were emphatically rejected by the Senate and the House.
Despite Australian women – on average – living longer than men and retiring sooner, women have about a quarter less super than men as they approach retirement.
Super Members Council analysis shows the gender super gap dramatically widens when women reach their 30s – the decade when many women take time out of the paid workforce to raise children. While the gender super gap has narrowed for most ages, women in their 30s are going backwards.
Paying super on parental leave is a highly effective gender equity measure and could reduce the gender gap at retirement by around a quarter. SMC estimates about 94% of the benefits accrue to women, and about 170,000 women received Commonwealth Parental Leave Pay in 2022-23.
Parental leave is one of the only types of paid leave that does not attract super. Now the Australian Government will pay super on its scheme, it sets an example for more employers to follow.
This is a momentous step towards making super more equitable. The Government should also now move to quickly pass the Objective of Super legislation which was introduced last November.
The Super Members Council will continue to advocate to address structural drivers of the gender super gap like lower workforce participation rates, the prohibitive cost of childcare, lower pay for feminised industries and the value placed on unpaid caring.
Table 1: Gender super gap by age and median balances
| Age | Men | Women | Gender gap ($) | Gender gap (%) |
| 18-24 | $4,600 | $4,300 | $300 | 7% |
| 25-29 | $17,500 | $17,800 | -$300 | -2% |
| 30-34 | $39,800 | $34,300 | $5,500 | 14% |
| 35-39 | $70,200 | $54,400 | $15,800 | 23% |
| 40-44 | $101,200 | $74,100 | $27,100 | 27% |
| 45-49 | $133,600 | $93,500 | $40,100 | 30% |
| 50-54 | $162,100 | $111,100 | $51,000 | 31% |
| 55-59 | $186,300 | $128,700 | $57,600 | 31% |
| 60-64 | $205,400 | $153,700 | $51,700 | 25% |
| 18-64* | $142,500 | $110,400 | $32,100 | 23% |
Note: *18-64 age group’s balance and gap figures are based on mean balances.
Source: SMC analysis of the ATO Taxation Statistics, 2021-22.