Retirement
Secret super tax costing over $500m
Mothers in Victoria and South Australia are missing out on a combined $520 million in retirement savings, as the government refuses to pay super on parental leave schemes, new research has revealed.
Secret super tax costing over $500m
Mothers in Victoria and South Australia are missing out on a combined $520 million in retirement savings, as the government refuses to pay super on parental leave schemes, new research has revealed.
Despite the gender super gap between men and women, the government has refused to pay super on top of parental leave schemes.
But according to Industry Super Australia (ISA), missing years of super payments has a dramatic impact on a woman’s final retirement balance.
ISA highlighted that women who spend five years out of the paid workforce in their late 20s and early 30s could be almost $100,000 worse off.
ISA’s advocacy director, Georgia Brumby, said women are being made to sacrifice their retirement in order to have children.
“It’s hard enough trying to juggle work and raising a family – it’s not fair that thousands of women are also being slugged with this hidden pregnancy tax on their super as well,” she said.
According to ISA, up to 380,000 Victorian mothers have received Commonwealth-paid Parental Leave Pay in the last 10 years, sacrificing thousands in retirement savings.
Similarly, in South Australia, 96,000 mothers have not received any leave entitlements.
The government has itself admitted that the gender super gap could persist for at least the next four decades unless action is taken – paying super on parental leave is an important step towards bridging the gap.
Industry Super Australia has urged the government to fix what they have termed a glaring issue.
“The Prime Minister needs to fix this glaring inequity and stop ignoring the gender super gap – otherwise, we will continue to see too many women at risk of retiring into poverty,” Ms Brumby concluded.
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