Parents tapping into government-funded paid parental leave will be paid superannuation in a move aimed at improving the security and dignity of women in retirement.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Finance Minister Katy Gallagher will outline the changes as well as the details of a national strategy to achieve gender equality at the National Press Club on Thursday.
The super 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.
"The data is clear - that when women take time out of the workforce to raise children it impacts their retirement incomes with women retiring, on average, with about 25 per cent less super than men," Senator Gallagher said.
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.
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.
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.
Greens leader Adam Bandt said there was no justification for the delay.
"This situation has gone on for far too long and Labor could have fixed this much earlier and stopped women retiring in poverty," he said.
Opposition frontbencher James Paterson said paid parental leave was originally envisaged as a welfare scheme, not wage replacement, and hadn't historically been paid with superannuation.
"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 changes have 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."
The Parenthood chief executive officer Georgie Dent said Australian women were still financially penalised for having children.
"The inclusion of superannuation payments reinforces that paid parental leave is not a welfare payment, but a workplace entitlement just like annual leave or sick leave," she said.
Adding superannuation to paid parental leave was recommended by the women's economic equality taskforce.
Australian Associated Press
