Mother's Day, $130,000, and the rule no one's fixing

Jess Renn keeps a screenshot of her last super statement on the home screen of her phone. She is forty-something, lives in Melbourne, and has been a nanny for more than twenty years. The number on that screenshot is not the kind you frame.

She works up to fifty hours a week, usually thirty for one family, twenty for another. Across the year, that stacks up to standard full-time hours, and then some. Across her career, by her own back-of-envelope, she has about a quarter of the super balance any other Australian her age might reasonably expect. That isn’t because she stopped working. It is because, for most of those twenty years, none of her employers were legally required to put a cent of super in.

This Sunday is Mother’s Day. By the end of the week, you will have read every variation of the headline about how the system fails women in retirement. I want to write a different one. Not the polished, cocktail-of-statistics version. The version where the maths actually lands.

Here is the bit I keep getting stuck on. A federal carve-out in the Super Guarantee says that if you employ a domestic worker (a cleaner, a housekeeper, a nanny) in your private home for fewer than thirty hours a week, you do not have to pay them super. Doesn’t matter whether they’re working forty-nine hours across other households. The threshold is per-employer. The maths runs on a per-job basis even when the worker’s life does not.

Analysis from the Super Members Council, the peak body for the country’s profit-to-members funds, puts the affected workforce at close to forty thousand people during the 2026-27 financial year. Each is missing about $4,000 a year in employer super, on average. Nationwide, that comes to roughly $150 million in retirement savings that simply do not exist. Eighty-six per cent of the people losing it are women.

Read that twice. Forty thousand workers. A hundred and fifty million dollars a year. A rule that was put in place decades ago because tiny super balances were getting eaten alive by fund fees, kept on the books long after fund fees on small balances were reformed away.

The number that does the actual damage

Drag the carve-out forward into a working career and the figure the SMC lands on is around $130,000 of additional super at retirement, per affected worker, if the rule were scrapped tomorrow. That is not the gender super gap in some abstract sense. It is the sum total of one structural decision, made invisible by the way payroll is processed inside private homes.

Lauren Brown runs Nanny Pay, a payroll facilitation service for families employing nannies. She has watched the same conversation play out for years. “Women are already missing out on super because of maternity leave and raising children,” she told the ABC. “It’s just a systemic problem that this rule plays a big role in.”

The other thing she said is more uncomfortable. “When the domestic super rule is the reason why families can say no, it makes that negotiation so much harder for that worker.” There is a power imbalance baked into a wage negotiation between a household and the person who looks after that household. The rule gives the household a script.

Jess Renn’s experience matches the script almost exactly. When she asked about super, she told the ABC, employers said they were not legally obliged. With one long-term family she ended up swapping a pay rise for a salary-sacrifice arrangement into her super. With others, the answer was a flat no.

A second nanny, who asked only to be identified as Ellen, told a tighter version of the same story. The family she worked for cut her hours, very deliberately, every week. “They would cut me bang on 29.5 [hours],” she said. “If it was looking like I was getting close, they’d go, ‘Oh, go home’, because they would not, they did not, want to pay me any super.” She is now banking an extra fifty dollars a week into her own account, hoping it adds up to something. She thinks it probably does not. “If I wasn’t with him,” she said of her husband, “I’d probably be in a lot of trouble.”

That sentence, more than any number, is what I keep coming back to. A retirement financed by the fact of being married. Not a strategy. A backstop.

The motherhood part of the maths

Domestic workers are one slice of the gender super gap. The bigger slice, the one that catches almost every working woman in the country at some point, is the cost of unpaid care.

Rest, the industry fund with around two million members and the largest female cohort of any Australian super fund, has just published its own data on this in time for the weekend. The headline figures sit ugly on the page. Female members aged twenty-five to forty receive about $6,360 in super contributions a year, on average. Their male counterparts in the same age band get $7,484. That is a thousand-dollar gap a year, every year, during the period of life that compounds the hardest. Women retire with around 26 per cent less super than men by the time they get to the finish line.

The other figure I want to put next to it. The share of Rest members getting the Low Income Super Tax Offset, or LISTO, is 57 per cent women in the eighteen-to-twenty-five bracket and 75 per cent women in the thirty-one-to-forty bracket. The age range where the offset tilts hardest toward women is, of course, the age range when most women are having babies and dropping out, or stepping back into part-time hours that drag them down into the LISTO band in the first place.

I keep two more numbers on a sticky note next to the desk. After the first child arrives, women’s earnings fall by 55 per cent over the following five years. Men’s earnings, in aggregate, do not move at all. Women become 2.7 times more likely to work part-time. The brochures call this “lifestyle choice”. The brochures are working from the wrong dictionary.

Treasury’s own modelling, going back to its 2023 Women in Super submission, sketches the cost in dollar terms. A woman with two kids who takes a year of parental leave for each and then returns to work part-time, on the modelled assumptions, retires with around $55,500 less super and roughly $649,400 less in lifetime disposable income than the same-careered woman without kids. Per child, that’s the price of a small car and the deposit on a one-bedroom flat in a town she probably can’t afford to move back to.

Enrico Burgio, who runs public policy and advocacy at Rest, frames it in the kind of language the industry has tried to use for years and has not yet quite cut through with. “Our superannuation system continues to treat unpaid care as time away,” he said this week, “rather than time given.” The proposed fix, which Rest has been pushing for and which other industry funds back to varying degrees, is a Superannuation Carer Credit. The basic shape: government-funded super contributions during periods of unpaid care, pegged to a notional wage. It would be the next step on from the Albanese-era reform that began paying super on Government Paid Parental Leave from 1 July last year, which itself adds an estimated $14,800 to a mother-of-two’s eventual retirement balance.

Carer Credits would do more, by an order of magnitude, because the parental-leave window is twenty weeks. Care doesn’t stop when the leave does. The policy idea isn’t new and isn’t radical. It exists in some form in Sweden, Germany and the United Kingdom. Two-thirds of Rest members surveyed support a version of it, the support sitting at 70 per cent among women and 61 per cent among men.

What none of this fixes, and what should be uncomfortable for the funds saying it, is that all of this assumes a working life inside the formal employment system. The forty thousand domestic workers in the SMC’s analysis are not inside that system. They are inside a parallel one that the legislation has not caught up to. The motherhood penalty and the domestic-worker carve-out are the same problem viewed from two angles. One is paid work being treated as if it isn’t. The other is unpaid work not being treated as work at all.

The wider balance sheet, which doesn’t help everyone

Adjacent to the super conversation, a small but growing argument says we are looking at retirement adequacy through the wrong window. The argument, this week from Homesafe Wealth Release CEO Dianne Shepherd, is that the family home is the largest line on most Australian household balance sheets and that ignoring it makes the system look worse than it actually is.

She has a point about the asset side. She also has a point that retirements are now stretching to twenty-five or thirty years for a lot of people, and a super-only model gets thinner the longer it has to spread. The trouble with leaning on the home as a retirement asset is that it works best for the cohort that already has one. Women who came out of long careers of low contributions are also disproportionately the cohort renting in retirement, or holding mortgages they will not have paid down. Asset-rich is a useful frame for some readers of this column. It is the wrong frame for the cleaner whose super balance was the first thing in this piece.

That distinction is going to be the political cleavage of the next decade, and not the comfortable one. Reform proposals tend to assume a homeowner. Most of the policy oxygen will be spent on how to draw down housing wealth more elegantly, and not on how to fill the holes underneath the people who never got to the housing party. (The same dynamic, incidentally, sits underneath everything we wrote in the Budget piece a couple of weeks back. The policy money flows through people who already have something to attach it to.)

Asked whether the carve-out would be looked at, the federal Assistant Treasurer’s office sent a statement saying the government was “aware of the issue” and “remained committed to ensuring the superannuation system is providing Australians with dignity and security in retirement”. You can read that two ways. I read it the way I have read most of these statements over six years on the round, which is: nothing is being drafted, nothing is on a calendar, ask us again next year.

The threshold reform requires a regulatory amendment. Nobody in the building is currently shepherding it. The Carer Credit proposal is at a stage that exists in policy circles called pre-pre-consultation, which is two stages back from anything Treasury would commit a paper to. Both could be moved with a couple of pages of explanatory memo if a minister were prepared to wear the headlines. The headlines, today, are the bit that’s missing.

Which brings me to the question every reader of a column like this is allowed to ask. Fine, but what am I supposed to do this weekend.

So what’s the actual list

The honest answer is that the structural fix isn’t on the menu before Sunday, and a couple of the smaller fixes are. Before I get to them. I should say I have been writing about super for six years and the questions I get asked over Mother’s Day weekend are not new ones. Last May it was a friend who runs a small business and was working out whether to keep paying her cleaner cash. Year before, my own mother, who had not had a payslip put in front of her since the late nineties, was asking about a spouse-contribution form she had read about somewhere. The shape of the answer is roughly the same every time.

If your household is the one employing a nanny or a regular cleaner or a household helper, and they work for you under thirty hours a week, you are the household the rule was written to let off the hook. You can choose to pay them super anyway. It costs twelve per cent of their gross wages. On twenty hours at $35 an hour that comes to about $84 a week, which is meaningful to a household budget and is also, on the maths above, the difference between someone retiring with something and someone retiring on a pension and a husband. Two of the payroll services I’ve already mentioned (Pay the Nanny, Nanny Pay) will run it for you alongside the wage. Most funds will accept the contribution against the worker’s tax-file number without you having to phone anyone.

If you are the worker, the levers are smaller and slower and you have probably already heard their names. Salary sacrifice from a future pay rise rather than a current one is the cleanest of them. The downsizer contribution lets some older Australians push up to $300,000 from a home sale into super, outside the normal caps, once they are over fifty-five. Spouse contribution splitting lets a higher-earning partner move fifteen per cent of their concessional contributions across to a lower-earning partner each financial year, which over twenty years can shift six figures across the household ledger if you remember to fill in the form (you will not). None of these is a fix. My mother described them to me, accurately, as the consolation prizes a couple of generations of women have been forced to memorise.

The lever that costs nothing is to ask. Ask your fund whether the right tax-file number is on file (a surprising number aren’t, and that’s how a year of LISTO disappears). Ask your employer to pay super on unpaid parental leave even though they don’t legally have to. Fifteen per cent of Australian employers do already, which means the conversation isn’t a strange one. And if you employ household help, ask yourself this. Is the rule that takes twelve per cent off her hourly cost the rule you want to be standing on this Sunday.

Jess Renn says one thing when people ask her how the rule works in practice. “Any other job, those are full-time hours.” She says it the way you’d describe weather. It does most of the work in the room. The screenshot on her phone has not changed in months. The next version of it depends a little bit on her, and quite a lot more on the people whose dishes she leaves drying on the rack.