Superannuation for parental leave: Millions to cash in with key change – here’s how it could benefit you
The pension will be included in paid parental leave payments as the government unveils a national strategy to achieve gender equality.
Finance Minister Katy Gallagher will announce the reform and strategy at the National Press Club on Thursday.
The measure will come into effect on July 1, 2025 and follows the government’s promise to expand paid parental leave to six months by 2026.
Senator Gallagher said the reform aims to close the gap between the amount of super men and women earn.
“It helps close the huge gender pay gap, but also sends a very strong message that we believe women should not have to pay a financial penalty for taking time away from paid work to care for children,” she told ABC TV. on Thursday.
The pension will be included in paid parental leave payments as the government unveils a national strategy to achieve gender equality. A pregnant woman is depicted
Senator Gallagher said that while the final amount of the scheme has yet to be determined, the pension pledge will be funded from the federal budget and will not be tied to an election pledge.
The 12 percent super contribution will help 180,000 families who receive the benefit annually.
Senator Gallagher said that while some employers already pay extra on top of paid parental leave, the changes would ensure that all people who use the leave would have access to it.
It is estimated that women have a third less in their super balance than men at retirement age.
Adding super to paid parental leave was recommended by the Women’s Economic Equality Taskforce.
Treasurer Jim Chalmers defended the decision to implement the super changes in mid-2025.
“We have to get the systems right, we have to figure out the most effective way to pay this benefit,” he told ABC Radio.
Adding retirement to paid parental leave was recommended by the Task Force on Women’s Economic Equality.
Opposition frontman James Paterson said paid parental leave was originally intended as a welfare scheme, not a wage replacement, and historically no pension has been paid.
He said this was a “new approach” from Labor that the Coalition would scrutinize.
“We will look very carefully at the details and in particular the costs and ensure that the Government has done its homework here and that the full costs are transparent and clear,” Senator Paterson told Sky News.
The super scheme has been welcomed by the pensions sector, with Misha Schubert, director of the Super Members Council, calling the move historic.
“This watershed reform will make a powerful difference to the lives and retirement incomes of generations of Australian women for decades to come, and reduce the gender gap in retirement,” she said.
Finance Minister Katy Gallagher (pictured) will announce the reform and strategy at the National Press Club on Thursday
“It will move Australia powerfully closer to the goal of ending the financial ‘motherhood penalty’ in the early years of childbearing, which has a compounding effect on women’s working lives.”
Mary Delahunty, CEO of the Association of Superannuation Funds of Australia, said the change would be a huge boost to equity.
‘In the past, women retired with, on average, considerably less savings than men, as a result of (furlough) work or working fewer hours to have and raise children. About damn time,” she said.
ACTU assistant secretary Joseph Mitchell said the move would address a gap in the pension system.
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