The motherhood penalty and ways to work around it

Stakeholder Specialist Natalie Palmer didn’t realise she’d been affected by the motherhood penalty until it had already happened. “I didn’t really know what it was until I started working at Sorted. Then I joined the dots and realised – that’s me!” 

When even the most onto it women aren’t fully aware of the barriers taking time off work to parent can create, you’d be forgiven for finding yourself in the same boat. And as we give you the rundown of what the motherhood penalty means and steps you can take to mitigate it, it’s important to note that this isn’t something for only mums to grapple with – we can all work together to flip the script. Given a 2021 report by Westpac suggests New Zealand’s economy could increase by an average of $1.5 billion every year if we shared the load more equally at home, change will be to everyone’s benefit. 

“It was an easy decision for me to stay at home with the baby,” says Natalie, who now works at Te Ara Ahunga Ora Retirement Commission, which runs Sorted. “It’s how I always pictured it happening, and it made sense given Jamie earned more than me, plus he received commission and bonuses, so him taking time off would have penalised us more financially.” 

Natalie felt “extremely blessed” that they could afford for her to stay home with Eden, and lucky to step into a well-paid part-time role when her maternity leave was up, “but my god, it was hard. This is when I started to feel the motherhood penalty without realising that’s what it was. Because I was part-time, I’d usually be the one to take time off when Eden picked up one of the many daycare bugs, which made it difficult for me to give work my all, because I was always worried about that dreaded phone call from daycare. I couldn't think about my career or future self in any way – I was just trying to get by.” 

Since Natalie and Jamie both emptied their KiwiSaver accounts to buy a house after Eden was born, Natalie wasn’t subjected to the inequality in KiwiSaver contributions that can occur between the paid versus the unpaid parent or the part- or full-time salary, but still, she says, “it was a shock for me to realise the motherhood penalty applied to me in other ways.  

“Looking back now, I can see that we put a lot of emphasis on Jamie progressing his career and earning the money, whereas my work was just about doing something to contribute to the household while being flexible around Eden. It was a stressful time, but I just saw it as something we – or I! –  had to get through. Now I realise I might not have had to.  

“Jamie’s workplace at the time had zero flexibility, and in hindsight, we should have considered alternative employment on his end to allow for that, so it didn’t all fall on me. Now he is in a new role that means he’s able to work from home when Eden’s sick, do school drop-offs, attend the sports days, etc, so it feels much more like a 50/50 split in terms of childcare.” 

Despite the setbacks, Natalie’s story has a happy ending – and yours can too. “Working with a super-supportive team showed me I could take the next step in my career while also being flexible for my family,” she says.  

“Today, I’m in a good place professionally – and my most important job will always be being a mum, so I’d pick that over a dollar figure any day – but I know now that when we’re young and about to have a baby, we need to understand the effect the choices we make now can have on our career and financial future.” 

Philippa Prentice is Communications Specialist at Te Ara Ahunga Ora Retirement Commission. A former journalist of 20 years, her work has appeared in publications in Aotearoa and Australia.