Motherhood comes with a penalty

The super system assumes workers have an unbroken career, but this isn’t the reality for most women

- Vita Palestrant

Superannuation is built on the assumption that you will have a continuous, full-time attachment to the workforce and accumulate enough savings for a secure and comfortable retirement. But it’s modelling that fails to take into account the “motherhood penalty”.

That’s the penalty women pay for bearing and raising the next generation of Australians. It’s one of the biggest factors impacting women’s financial security and leaves them more vulnerable to poverty in old age.

The gender pay gap has been stuck between 13% and 19% for two decades, with women still paid less than men in many industries. Female-centric occupations in particular, such as nursing and teaching, are undervalued and pay less than male-dominated occupations.

“It’s unequivocal. There is a significant financial penalty that results from unpaid caring work and women still take on the lion’s share of it,” says Robbie Campo, group executive for brand, engagement, advocacy and product at the industry super fund Cbus.

She says the statistics show that men and women have a fairly similar savings pattern until the typical childbearing years, when women’s savings flatline.

“The unpaid caring work women do impacts on their capacity to engage in paid work and progress their careers,” says Campo. “The other factors are the structural elements that exacerbate the problems. They are settings within our system that discriminate against women.”

Debby Blakey, CEO of HESTA, one of Australia’s largest industry funds, says women retire with, on average, close to half the super of men as a result of taking time out of the workforce to care for children.