Fixing the motherhood super penalty is the best Mother’s Day gift

Mother’s Day is a moment to recognise the value of care - but for many Australian women, it comes at a lasting financial cost.

New insights from Rest, one of Australia’s largest profit to member superannuation funds, highlight how the motherhood super penalty is leaving Australian women significantly worse off in retirement.

Rest is calling on the Federal Government to review potential Superannuation Carer Credit models to address the super gap when parents and carers spend time out of the workforce caring for children, family members, or dependants.

“As a fund representing well over 1 million women, Rest sees firsthand the long term impact the motherhood super penalty can have on women’s super,” said Enrico Burgio, General Manager, Public Policy & Advocacy at Rest.

“Our superannuation system continues to treat unpaid care as time away rather than time given,” says Mr Burgio. “Interrupted work patterns, reduced hours and periods of unpaid caring work are among the strongest contributors to the gender super gap.”

New research conducted with Rest members¹  shows strong support for action to address the motherhood super penalty, with two-thirds (66%) backing government compensation for superannuation missed while taking time out of paid work to care for children, family members, or dependants. Support is strongest among women (70%), compared to men (61%), consistent with the greater retirement impact of caring responsibilities.

Analysis of Rest’s more than 2 million members²  - of whom nearly 60% are women – shows female members in peak caring years experience intensifying low-income patterns and are falling behind male members in super contributions.

Women account for 57% of Rest members receiving the Low Income Super Tax Offset (LISTO) at ages 18-25, increasing to 63% for members aged 26-30, and to 75% at ages 31-40. The average total annual super contribution for female Rest members aged 25-40 was $6,360, compared to $7,484 for male members of the same age.

National data shows the patterns seen among Rest members reflect a broader, systemic issue across Australia, with Australian women retiring with 26% less super than men³. Women’s earnings fall by 55% in the five years after having children, while men’s earnings remain unchanged⁴. Women are also 2.7 more times likely to work part-time than men⁵.

Employer support during parental leave remains inconsistent. While 67% of Australian employers offer paid parental leave and 85% pay superannuation on employer-funded parental leave, just 15% of employers provide super on unpaid parental leave⁶.

Rest has long advocated for reforms that strengthen women’s retirement outcomes.

“Introducing super on Government Paid Parental Leave was a critical step forward. Superannuation Carer Credits are the next logical step - recognising unpaid care as real economic work and helping ensure the years parents spend raising children don’t become decades of reduced financial security.