Australia Considers Paying Pensions on Parental Leave Program
(Bloomberg) -- Australia could chip into the pension funds of eligible workers who take up its 18 weeks of paid parental leave, just not yet, amid criticism the government isn’t doing enough to ensure women are financially secure in retirement.
The policy was changed last year to also pay fathers to take time out of the workforce to help raise kids, however it hasn’t yet had time to “manifest,” Jane Hume, minister for superannuation and newly-installed minister for women’s economic security, told Bloomberg TV Friday.
“We’d like to see the outcomes of that policy and see how it’s been implemented and how it’s been working before we make any further changes,” said Hume. “But look, it’s certainly not off the table.”
Australia’s government on Tuesday outlined a series of reforms to narrow the gender pension gap, including removing the A$450 ($348) per month threshold before employers pay 9.5% of the monthly salary into their pension fund. The threshold meant many low paid and casual workers missed out, disproportionately impacting women who work multiple part time roles while raising children.
While pension funds and advocacy groups welcomed the reforms as a first step, they criticized the government for not doing more, including extending the parental leave program to include pension contributions while new parents, particularly women, take time out to be family carers.
“For too long Australian women have paid the ‘motherhood penalty’ for the time they take out of the workforce to care for children,” Health Employees Superannuation Trust Australia Chief Executive Officer Debby Blakey said in a statement. “More needs to be done to improve their retirement outcomes. Paying super on paid parental leave is an easy and obvious fix.”
While that may help narrow the gap in savings between men, it doesn’t ensure women will have enough in retirement, Hume said, citing findings from last-year’s government commissioned review into retirement incomes. That will only be addressed with more women in the workforce, she said.
This week’s budget was the government’s attempt to win back female voters after a stream of revelations since February involving allegations of sexual violence and misconduct among lawmakers and parliamentary staffers. Things came to a head in March when thousands of women and men rallied to demand greater female representation in politics and action against sexual violence and discrimination. Prime Minister Scott Morrison last month said his government would adopt all 55 recommendations made in a watershed report by the nation’s sex discrimination commissioner to tackle workplace sexual harassment.
“Australia has one of the most educated female workforces in the world, and yet we have one of the highest rates of part time work,” Hume said. “We’d like to make sure that we remove those barriers to women fully participating in the workforce so that they can enhance their lifetime earnings and secure their economic futures,” Hume said.
Workplace sexual harassment is also an issue for the private sector, said Hume who worked in the financial services industry before entering parliament at firms including National Australia Bank Ltd., Rothschild Australia and AustralianSuper Pty. She said policy makers were reassessing processes and programs to ensure women feel safe and supported in parliament and public service in the wake of sexual harassment incidents.
“Everybody has a right to be safe at work and to feel safe at work,” she said. “Parliament should be the gold standard in that.”
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