People – mostly women – who leave the workforce to look after aged, infirm or ill dependents could have their superannuation balances boosted by over $120,000. And it could be done at a neutral cost to the budget – that is the conclusion of KPMG’s July 2023 report, part of its long-running gender equity series.
Including Superannuation Guarantee contributions in Paid Parental Leave
The time women spend out of the workforce giving birth and raising children contributes not only to a gender pay gap and a gender income gap but also to a gender superannuation gap.
These gender inequities arise largely from our society’s economic undervaluation of unpaid caring work, which is performed predominantly by women.
Since 1 January 2011, when the Commonwealth Paid Parental Leave (PPL) scheme came into force, it has not included Superannuation Guarantee (SG) contributions. As it is still mostly mothers who take PPL, the omission of SG adds to the super and income gender gaps.
KPMG continues to believe that since the Commonwealth pays Paid Parental Leave to eligible workers – and compulsory super contributions rightly form part of remuneration – then it follows logically that the Commonwealth should make Superannuation Guarantee contributions under its PPL scheme.
We renew our call for the government to include Superannuation Guarantee contributions in Paid Parental Leave in future budgets.
Including Superannuation Guarantee contributions in Carer Payment
KPMG also recommends that the government considers adding superannuation contributions to the Commonwealth Carer Payment. This modest measure would be an immense boost for those recipients of the Carer Payment, who provide constant care to someone who has a disability, severe illness or is frail aged, and who often have to leave the workforce for years, leaving them with minimal super balances.
Carers benefit the federal budget by providing a valuable service to society at a much lower cost than if the people they look after went into formal care. Not only would KPMG’s proposal properly recognise and value that role – and help close the gender superannuation gap, given that most carers are women – but it could be done cost-neutral to the Budget over time.
From the individual’s perspective, a person who began caring at 35 years of age and continued to provide care and receive the Carer Payment for 15 consecutive years thereafter, the addition of SG contributions to the Carer Payment could be expected to boost the carer’s superannuation balance at retirement age by $123,000. KPMG economic analysis finds that this could be achieved at a budgetary cost of $45,500 in real terms.
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More reports in the Gender Equity series
- Recognition for unpaid caring work: Towards gender equality
- Budgeting for gender equity
- Addressing the gender superannuation gap
- Parental equality and unpaid work reforms
- A better system of Paid Parental Leave
- The Child Care Subsidy: Increasing support for caregivers
- Further investment in the Child Care Subsidy
- A new deal for women pensioners who rent
- Achieving a better deal for working mothers
- Ending workforce discrimination against women