Many women are feeling stressed and anxious about the dent to their retirement savings from taking time out of the workforce to raise children and want the government to address the gender superannuation inequity, according to new research from health super fund HESTA.
About three in five HESTA members surveyed who had taken parental leave and not been paid super said they were concerned about the long-term impact it would have on their financial security in retirement. A third of respondents said they were very or extremely concerned.
Overall, nine in 10 of the 2,300 members surveyed agreed strongly that changes to Australia’s super system are needed to safeguard women’s financial security as they age.
Members supported measures to close the gender pay gap and provide better job security and fairer pay for women-dominated industries such as health and education. They also want improved childcare accessibility and affordability and an increase in super savings for women who take time out of the workforce.
HESTA CEO Debby Blakey said members felt taking parental leave had put them at a disadvantage when preparing for retirement, and caused them deep-seated concern and financial stress.
“Our members are telling us they’re worries and stressed about not having enough to retire on because they need to take time out of the workforce to raise children,” Ms Blakey said.
“This is effectively a financial penalty on women’s pay and it’s unacceptable and deeply unfair. It’s why we want to see gender equality in next week’s Federal Budget and why we’re calling for superannuation equity reform to be a priority in the next term of government.”
Survey respondents reported concerns about the financial stress from a relationship breakdown, being forced into casual, insecure employment after returning to work and needing to work longer to build their super. Several members said it was “unfair” their super had suffered, particularly when compared to their partner’s retirement savings.
“Birth is a life stage that should be celebrated, not a crisis to worry about,” said one woman, 31, who works full-time in aged care.
The survey found the average total parental leave taken amounted to about 14.7 months, more than a year out of the workforce. More than half of respondents who had taken parental leave had taken two or more periods of leave, with one in six having taken three or more.
Parental leave is the only commonly taken form of paid leave that does not include superannuation.
HESTA has long advocated to make women’s retirement outcomes a top priority, calling for three urgent policy reforms to improve equity in super:
- Paying super on Commonwealth Parental Leave Pay;
- Introducing a super carer’s credit for unpaid parental leave; and
- Providing universal access to affordable childcare.
“It’s clear achieving gender equality and equity in super outcomes is extremely important for our members and they’re expecting the next Government to make women’s financial security a top priority,” Ms Blakey said.