Almost half of Australia’s businesses are including super contributions with parental leave pay, new data from Industry Super Australia (ISA) has revealed.

In a statement issued on Tuesday (8 February), ISA took a swipe at the federal government, noting that its refusal to pay super on top of government-funded parental leave has cost working mothers $1.6 billion.

“The federal government is lagging and needs to follow the example of our best employers and pay super on its parental leave scheme,” said ISA advocacy director Georgia Brumby.

“This is an opportunity for the Prime Minister to show he is serious about women’s economic security.

“Without action now the gender gap will persist for decades and too many women will continue to retire into poverty,” Ms Brumby said.

According to ISA, up to 1.45 million mothers have received government-funded parental leave in the last 10 years, sacrificing thousands in retirement savings.

ISA’s research revealed that in the 2019-20 financial year alone, 170,860 women missed out on $216.7 million in super payments.

As such, a working mother of two would be $14,000 better off in retirement if the government paid super on top of parental leave.

“If the government made a modest payment of super linked to the Commonwealth’s 18-week paid parental leave scheme – paid at minimum wage and available to most working mothers – it would be an important equity measure to ensure women’s savings keep pace and encourage more employers to do the same,” ISA said.

ISA’s research revealed that 49 per cent of employers in its database – companies with more than 100 staff – pay super on their parental leave scheme.

The Retirement Income Review, led by former Treasury deputy secretary Mike Callaghan, estimated retirement incomes for those on parental leave would be 0.14 per cent higher if super was included on top of employer-paid parental leave and 0.17 per cent higher if it was paid on top of government-funded parental leave.