Superannuation added to parental leave boosts gender equality

The Parenthood celebrated a big shift towards gender equality with the Albanese government’s announcement to integrate superannuation payments into the government’s paid parental leave scheme, effective from July 1.

This change, revealed alongside Australia’s inaugural national strategy for gender equality, Working for Women, is heralded as a transformative move for valuing care and enhancing economic inclusion.

Championing family support and equality

Georgie Dent (pictured above), CEO of The Parenthood, lauded the development as a pivotal moment for Australian families, highlighting the reform’s message about the importance and value of child-rearing.

“It sends a powerful message recognising that raising children is a valuable undertaking that deserves to be supported and compensated,” Dent said.

With Australian women currently retiring with 25% less superannuation than men, this policy aims to fortify the financial futures of the 180,000 families who benefit from the scheme annually, particularly aiding mothers in closing the superannuation gap.

“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,” Dent said.

Financial implications of the reform

The reform introduces a 12% superannuation payment on the Commonwealth’s paid parental leave, which pays $852 per week for 24 weeks. This addition translates into approximately $2,500 in super contributions for families on leave, potentially growing to nearly $30,000 in 30 years with average super returns.

“This is a significant victory for gender equity and for organisations and individuals who have campaigned and advocated for this change for the last decade,” Dent said. “Women in Australia remain financially penalised for having children, as the recent WGEA data captures, with significant ramifications for their long-term financial security and retirement savings.”

Encouraging shared responsibility

By including superannuation in paid parental leave, the reform aims to promote a more equitable sharing of unpaid caring responsibilities between parents. It challenges prevailing attitudes towards parenting and employment, striving to normalise child-rearing as a workplace standard, not just a benefit primarily afforded to women.

Peter Chun, CEO of UniSuper, echoed the sentiment of progress.

“This is a welcome and important step in delivering a more equitable super system – one UniSuper and others in the industry have been lobbying to achieve for years,” Chun said. “Every dollar counts. No one in Australia should lose out in retirement due to inequity.”

The Parenthood commended the government’s commitment to gender equality and its concrete actions to support families through evidence-based policy reforms.

“The Parenthood welcomes the Commonwealth government’s ongoing commitment to pursue evidence-based policy reforms to address structural drivers of gender equity, and to value the significance of the early years for children, parents, and communities,” Dent said.

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