Super boost for parental leave to support nearly 180,000 women in 2025

Key points:

• The government will pay 12 percent superannuation for workers taking Commonwealth Paid Parental Leave commencing July 1, 2025
• The Labor Party had previously committed to including super for government-funded PPL in 2019, but rescinded the commitment ahead of the last federal election
• The vast majority — 99.5 percent — of the estimated 180,000 yearly PPL recipients are women

Advocacy groups have welcomed the government’s announcement to provide superannuation payments to parents who receive Commonwealth Paid Parental Leave.

Recipients will receive 12 percent superannuation on top of PPL from July 1, 2025, under the confirmed plan to introduce legislation to ensure parents are not worse off in retirement.

The Australian Council of Trade Unions claimed that this change ‘will rectify a historic inequity that costs women thousands of dollars in retirement savings contributing to the stark gendered retirement gap.’

ACTU Assistant Secretary Joseph Mitchell said the new policy will be ‘phenomenal for working women.’

“This will take us one step closer to retirement equality and finally rectify a glaring gap in our retirement income system,” Mr Mitchell said.

“This announcement comes off the back of more than a decade of union campaigning to win equal retirement outcomes for women, it’s an outstanding result for so many union women who campaigned for this reform.

“So many women retire with far too little and this going to make an enormous difference for hundreds of thousands of women and families every year who will no longer miss out on vital contributions to their nest egg while they are taking parental leave.”

The Super Members Council of Australia reported that the gender super gap is now $65,000 for those nearing retirement.

SMC Chief Executive Officer Misha Schubert said the Australian Government’s announcement signals a clear intent to further improve the quality of life for all women at retirement.

“The Super Members Council congratulates the government for this historic decision to pay super on Commonwealth Parental Leave Pay,” Ms Schubert said.

“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.

“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.”

Despite Australian women living on average longer than men and retiring sooner, they have approximately a third less super than men as they approach retirement, based on SMC interpretations of Australian Taxation Office data.

Federal Assistant Secretary Lori-Anne Sharp of the Australian Nursing and Midwifery Federation said that it was ‘very welcome news as women should not be penalised for taking time out of the workforce to have children.’

“Women comprise 89 percent of the Australian nursing and midwifery workforce, who, on average can retire with up to 40 percent less super than men — and that must change if working women have any chance of reaching a secure retirement with a comfortable standard of living,” she said.

How do you feel about the retirement gap in Australia and what are you celebrating on International Women’s Day? Let the team at Your Retirement Living know and subscribe to the newsletter for more news, information and industry updates.

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