Superannuation Included in Paid Parental Leave for Gender Equality

Superannuation 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 the strategy at the National Press Club on Thursday.

The measure will come into effect on July 1, 2025 and follows the government’s pledge to expand paid parental leave to six months by 2026.

Senator Gallagher said the reform was about closing the gap between the amount of super earned by men and women.

“It … helps close that super gender pay gap but also sends a very strong message that we don’t think women should pay a financial penalty when they take time out of their paid work to care for children,” Senator Gallagher told ABC TV on Thursday.

Senator Gallagher said while a final amount for how much the scheme will cost has yet to be determined, the superannuation pledge will be funded in the federal budget, and not tied to an election commitment.

The 12 per cent super contribution will help 180,000 families that receive the benefit each year.

Senator Gallagher said while some employers already pay super on top of any paid parental leave, the changes would ensure all people using the leave would be able to access it.

It’s estimated women end up have one-third less in their super balance than men by retirement age.

Treasurer Jim Chalmers defended the decision to have the super changes introduced in mid-2025.

“We’ve got to get the systems right, we’ve got to work out the most effective way to pay this benefit,” he told ABC Radio.

Adding superannuation to paid parental leave was recommended by the women’s economic equality taskforce.

Opposition frontbencher James Paterson said paid parental leave was originally envisaged as a welfare scheme, not wage replacement, and hasn’t historically been paid superannuation.

He said this was a “new approach” from Labor which the coalition would scrutinise.

“We will look very carefully at the details and particularly the costings and make sure the government has done their homework here and that the full cost is being transparent and clear,” Senator Paterson told Sky News.

The super scheme has been welcomed by the industry, with Super Members Council chief executive Misha Schubert labelling the move as historic.

“This watershed reform will make a powerful difference to the lives and retirement incomes of generations of Australian women in the decades ahead, and narrow the gender gap at retirement,” she said.

“It will powerfully propel Australia closer towards the goal of ending the financial ‘motherhood penalty’ in the early years of having children, which has a compounding effect across women’s working lives.”

Chief executive of the Association of Superannuation Funds of Australia Mary Delahunty said the change would be a huge boost to equity.

“For too long, women have retired with significantly fewer savings on average than men as a result of (time off) work or working reduced hours to have and raise children. It’s about bloody time,” she said.

ACTU assistant secretary Joseph Mitchell said the move would rectify a gap in the superannuation system.