Jazmin and her husband work in the same industry, but she has less super

In the two years since Jazmin Claveria and her husband, Tim Harrington, started their family, both have had to make allowances at work to accommodate the needs of their two young children, but only one of them has suffered a financial setback.

Like every other mother on Commonwealth paid parental leave, Claveria missed out on superannuation contributions from government-paid leave during stretches of time she took to care for their babies.

Jazmin Claveria pictured with children Hugo, 2, and Penelope, eight months. Credit: Penny Stephens

The couple, who live in inner Melbourne, work in the same industry, commercial construction, but by the time Claveria retires, the lack of super payments while on parental leave, and the compounding effect of interest, will have widened an already “substantial” super gap between them.

“He has had no interruptions to his super during the time we’ve had children; it’s only been myself,” says Claveria, whose children, Hugo and Penelope, are aged two and eight months.

“Having no super on maternity leave leaves you with quite a gap: I speak about this a lot. It does seem like a little bit of a war on women in that regard.”

Commonwealth parental leave, which entitles women to 18 weeks paid at the minimum wage (and families to a total of 20 weeks), is the only type of leave on which super is not paid, and this must change at the forthcoming budget, former federal health minister Nicola Roxon said.

Nicola Roxon, chair of the new Super Members Council, is lobbying the federal government to implement super on paid parental leave.Credit: Louise Kennerley

She is spearheading a campaign to pressure the Albanese government to introduce super on paid parental leave to help close the gender super gap.

The new Super Members Council, which Roxon chairs, has produced figures showing that while the super gender gap is narrowing slightly in most age groups, it is not shifting for women in their prime career-building and child-bearing years, their 30s.

The median balance for Australian workers nearing retirement is $200,000, but women typically retire with about $50,000 less super than men, the council’s report, Securing a dignified retirement for more women, says. This is partly due to the absence of compound interest from money paid into super during parental leave.

“I think governments of the past have ignored this; it’s been seen as not the biggest part of fixing the gender pay gap, but now there is a big focus … on closing it, it becomes a more obvious piece for the government to act on,” said Roxon, who also chairs the health and community services super fund, HESTA.

“This goes direct to women who take off time to have babies. We support them in lots of ways across the economy; it’s time to do this.”

HESTA produced figures last year showing an estimated $2.8 billion in super savings will be forgone by those, mostly women, taking time out of the workforce to care for their children, because super has not been paid on Commonwealth parental leave since it began in 2011.

The extra super payments would be especially beneficial to women who do not work in high-paying industries, said Emma Dawson, executive director of the think tank Per Capita.

“The HESTA calculations found that for every child you have, if we paid super on government parental leave it would mean an extra $7000 per child at the time of retirement,” she said.

“[Paying super on parental leave] seems like a small thing, but it’s significant, particularly when you consider the number of women who don’t earn a lot.”

Paying super on Commonwealth parental leave would cost about $200 million a year, Dawson said, “which is about 10 per cent of what they’re getting back from super tax changes for the wealthy.

“Women have much lower balances primarily because they take time out to care for others and it compounds over time. If you have two kids in your early 30s, which is still the average, then you’re taking a year minimum and those lost earnings aren’t getting compound interest.”

Many young women who drew down on their super during the pandemic would already be “going into their childbearing years without any super earning for them”.

Last October, the government’s Women’s Economic Equality Taskforce, chaired by businesswoman Sam Mostyn, recommended it legislate immediately to pay super on all paid parental leave. Receiving the taskforce report, Minister for Women and Finance Katy Gallagher said no decision had been made about including it in the budget in May.

Assistant Treasurer and Minister for Financial Services Stephen Jones did not respond to a request for comment.

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