In advance of International Women's Day, new research reveals that working mothers are losing out on billions in super.

Australian mothers have lost out on more than $2.8 billion in super savings at retirement because they took time off work to have children, and the longer reform to pay super on Commonwealth Parental Leave Pay is delayed, the more retirement savings Australian mothers will continue to lose out on.

Delaying super payments during paid parental leave would also have a significant negative impact on new mothers' retirement savings in the future.

A typical HESTA member who has a child in the financial year 2024 would see a more than $6,000 reduction in retirement savings as a result of a one-year delay until 1 July 2024, according to modelling. A further delay until 1 July 2025 would deplete the retirement savings of a HESTA member with two young children by more than $12,700[3].

HESTA CEO Debby Blakey stated that this disparity was unfair for new parents, particularly women who were much more likely to take parental leave than men, and it contributed to the gender pay gap.

According to this research, working mothers will continue to lose thousands of dollars in retirement savings for every year this crucial equity reform is postponed. "Failing to pay super on parental leave pay has seen working mums unfairly miss out on billions in super," Ms. Blakey said.

"Our super system is among the best in the world, but there are still glaring, enduring gaps where millions of Australians, mostly women, continue to squeak by and fail to receive the full benefits of super. This means that women still have about a third less super than men when they retire.

"An important policy that will help create a fairer retirement system for all Australians and is a key step towards addressing the gender super gap" is the extension of the Super Guarantee to workers who take paid leave to care for children.

85% of HESTA members overall supported paying super on parental leave in 2022, and that number rose to 91% for those under the age of 35. Nine out of ten respondents firmly agreed that reforms to Australia's super system were required to increase women's retirement financial security.

The only frequently used paid leave that currently qualifies for the Superannuation Guarantee is Australia's national Parental Leave Pay scheme, which went into effect on January 1, 2011.

"The Federal Government's decision to reduce the tax breaks for super accounts with balances over $3 million this week is a significant sustainability measure, but it is imperative that the Government act immediately to ensure that these savings contribute to the creation of a fairer and more equitable super system.

"For this reason, we're urging the government to give superannuation payments for the Commonwealth Parental Leave Pay scheme and other crucial equity measures top priority. Since unpaid caregiving work is essential to our economy and families' well-being, not paying super on parental leave pay sends the wrong message, according to Ms. Blakey.

"Nearly 80% of our members are women, and the majority of them work in caring professions with lower pay, like early childhood education and elder care. After spending their entire lives taking care of others, they shouldn't be financially penalised when they retire.

In addition to making super payments on Commonwealth Parental Leave Pay a top priority, HESTA requested changes to the Low Income Super Tax Offset, other tax breaks, and a super carer's credit for unpaid parental leave in its submission to the 2023–24 Federal Budget.

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