Mother’s Day gift idea? Breakfast in bed with a side of superannuation

Lisa Annese
Topics Gender
Lisa Annese Chief Executive Officer Diversity Council Australia

For many of us, there’s no better day to show mum how much she means to us than Mother’s Day. We buy her presents, make her breakfast in bed or tell her how much we appreciate all that she’s done for us. But what’s the best gift anyone can really give to mum?

Decent superannuation. 

The numbers paint a clear picture of the paucity of mother’s super and it’s not pretty. For many mothers, family caring responsibilities will mean time out of the workforce. As these career breaks accumulate over her working lifetime, her superannuation balance will be severely affected. The 2015 Westpac Women and Retirement Readiness Report has found that there is a $145,000 gap between the median superannuation account balance of women and men (it is $268,000 and $413,000 respectively). Not only is this a conservative estimate but increases with the number of children and time away from the workforce that women have.

According to Westpac’s analysis, the average 60 year old Australian woman may need to work an extra 15 years to retire with the same superannuation balance as men! And this is all because these women are playing a crucial role for our wider economy: being mum and supporting her family.

Not only does time away from the workforce impact a mother’s superannuation balance, but the continued (and growing) gender pay gap in Australia also means that the superannuation she is earning is proportionally less than what it should be. The national gender pay gap is currently 18.8% and has hovered between 15% and 19% for the past two decades with little sign of any improvement. 

Many mothers also need to work flexibly upon returning to work after family or maternity leave, often part-time, and so will accumulate even less superannuation as a result. Only a little over half (53%) of mothers with a child under two are in the workforce, and over four out of five (84%) mothers who started or returned to work following the birth of their child worked part-time.

For many families, depending on their net household income, it may be more financially viable for mothers to become a full time carer. According to the Australian Bureau of Statistics, over one quarter (29%) of mothers who had a job during their pregnancy permanently left their job either before or after the birth of the child. And almost half (49%) of these women left their job specifically to care for their child. 

So really, all the odds are against mum’s super balance and her living comfortably in retirement.

These realities are even more alarming when we consider that women in Australia generally live longer than men. Sadly, for all of these reasons and others, women over 55 have become one of the fastest growing demographics of homeless people in our country.

So what can be done about this? How can we support mums to improve their super balance?

Some of Australia’s leading employers are actively responding to these issues by continuing to pay their employees superannuation during paid and unpaid parental leave periods. Westpac currently pays employees full superannuation payments when taking unpaid parental leave for up to 39 weeks. This is in addition to the 13 weeks’ paid parental leave with full superannuation payments that employees are entitled to under Westpac Group’s existing parental leave scheme.

Rice Warner, a superannuation and wealth management company, is working actively to address the barriers faced by mothers by offering its female staff superannuation payable on parental leave for up to one year and an additional 2% superannuation payment throughout their employment period.

DCA’s recent research project, Older Women Matterinvestigatedthe range of strategies that employers can implement to address these issues. For example, organisations can factor age into any gender pay equity audits. Comparisons can be made not just between rates of pay for men and women, but also between men and women of different age groups, with a focus on comparing rates of pay in the older segment of the workforce where older women may be clustered.

Many commentators have also called on the Federal Government to fund superannuation payments for their Paid Parental Leave scheme.

The costs of not tackling these issues right now are many – and it’s not just for the mums we hold dear. Supporting mothers to maximise their superannuation will not only enable them to have greater financial security for themselves and their families later in life, but will also have an important national benefit in reducing welfare costs for future governments.

So what does mum really deserve this Mother’s Day? Hopefully a super present that will last her a lifetime.

By Lisa Annese

Lisa Annese is DCA's Chief Executive Officer

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