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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 strategy at the National Press Club on Thursday.
The measure will come into force on 1 July 2025 and follows the Government’s commitment to extend paid parental leave to six months by 2026.
Senator Gallagher said the reform sought to close the gap between the amount of super earned by men and women.
“This… helps close that huge gender pay gap, but it also sends a very strong message that we don’t believe women should pay a financial penalty when they take time away from paid work to care for their children,” she told ABC TV. Thursday.
Superannuation will be included in paid parental leave payments as the Government unveils a national strategy to achieve gender equality. A pregnant woman appears in the photo.
Senator Gallagher said that while the final figure for how much the plan will cost has not yet been determined, the retirement commitment will be funded from the federal budget and will not be tied to an election commitment.
The 12 percent super contribution will help 180,000 families that receive the benefit each year.
Senator Gallagher said that while some employers already pay a surplus on top of any paid parental leave, the changes would ensure that everyone who uses the leave can access it.
It is estimated that women end up having a third less in their super balance than men when they reach retirement age.
The women’s economic equality task force recommended adding super to paid parental leave.
Treasurer Jim Chalmers defended the decision to introduce the super changes in mid-2025.
“We have to get the systems right, we have to find the most efficient way to pay this benefit,” he told ABC Radio.
The Women’s Economic Equality Task Force recommended adding retirement to paid parental leave.
Opposition Leader James Paterson said paid parental leave was originally conceived as a welfare scheme, not a wage replacement, and has not historically been a paid retirement.
He said this was a “new approach” by the Labor Party that the Coalition would closely examine.
“We will look very carefully at the details and, in particular, the costs, and we will make sure that the Government has done its homework here and that the total cost is transparent and clear,” Senator Paterson told Sky News.
The super plan has been welcomed by the retirement industry, with Super Member Council chief executive Misha Schubert calling the move historic.
“This fundamental 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 powerfully move Australia towards 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, chief executive of the Australian Superannuation Funds Association, said the change would be a big boost for equity.
‘For too long, women have retired with significantly less savings on average than men as a result of taking (time off) from work or working reduced hours to have and raise children. It’s about time,” she said.
ACTU deputy secretary Joseph Mitchell said the move would rectify a gap in the retirement system.
READ MORE: Radical new idea of retirement access
Liberal senator Andrew Bragg has suggested allowing borrowers to divert money from their superannuation to an offset bank account (file image)