Growing Potential introduces paid parental leave super
The issue is costing workers billions and an Australian company has called on the government and other companies to end the ‘unfair’ sanction.
More than a million Australian mums have lost over $1.6 billion in superannuation over the past decade through the government’s paid parenting scheme alone and an Australian business is calling for change, describing the current system as ” discriminatory”.
Non-profit community service provider, Growing Potential, has announced that its 145 staff – 91% of whom are women – will now be paid in full while on parental leave for up to 24 months.
The organization wants to close the gender pay gap in retirement.
Women retire with far less money in their super funds than men. There’s a 28% gap between super men and women, with women retiring with a median superannuation balance of $146,900 compared to men walking away with $204,107 aged 60-64.
Ashleigh Bender has worked at Growing Potential for almost seven years and is currently pregnant with her second child, due in May.
The 35-year-old took 10 months off with her first child and received no superannuation payments while on parental leave, but did not know at the time that she was missing out on thousands of dollars.
“It wasn’t even on my radar, which I think is probably similar to other people my age,” she told news.com.au.
“With my first baby it was about the financial impact at the time and what it meant while I was on maternity leave and not for the future, especially not great.”
It wasn’t until she returned from leave and a new role in employee relations that she realized the huge difference between men’s and women’s retirement funds.
“I felt like that was really unfair. It shows that most of the parents who have time off are women and most of them come back part-time for a while, so the disadvantage continues. , so it was really frustrating,” she said.
The Sydneysider plans to take 10 months off to care for her second child and this time around she will get around $6,700 in super.
She said it was “awesome” to work for an organization trying to drive change in this area.
“My first child was a girl so hopefully by the time she has a family it will be a normal part of parental leave and not something a small number of organizations do,” she added. .
Growing Potential CEO Otto Henfling calls on other companies to follow his example, saying the more private organizations that make the change, the more likely it is that government policy will be introduced to equalize the Australia’s gender pension gap.
“It is demonstrably clear that all governments need to do more to improve gender equality for women in the workplace and the pension system,” he said.
“The government – and corporations, even on their own – must stop penalizing women who take time off from paid work to raise their children, at the cost of sacrificing thousands of dollars in their retirement savings.
“Australian women shouldn’t have to make this sacrifice and I’m very proud that the vast majority of female staff at Growing Potential no longer have to face this unfair discrimination – and it is what it is, the current system discriminates against working mothers.”
He said leaders of other organizations – especially those in female-dominated work sectors – should take a proactive approach by continuing to pay superannuation during parental leave.
Nearly 171,000 women missed $216.7 million in superpayments in the 2019/20 financial year alone.
A mother-of-two who received a super on parental leave from the government or her employer would have $26,500 more in retirement, according to a report by Industry Super Australia from last year.