Yahoo Finance Huge $14,500 superannuation boost for millions of Aussies: ‘Big milestone’
New laws to add superannuation to paid parental leave will be introduced to parliament today.
Aussie families will soon be able to earn superannuation on top of paid parental leave payments. The government will introduce the new laws to parliament today after the measure was announced prior to this year’s Federal Budget.
The move is expected to boost a mum-of-two’s retirement savings by about $14,500. It will benefit around 180,000 Aussie families each year and would come into effect from July 2025 if passed.
Social Services Minister Amanda Rishworth said the change would help achieve gender equity, with women estimated to have up to a third less super than men when they retire.
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“Not only is our government providing immediate support to Australians with a new baby, but we're boosting their retirement savings,” Rishworth said.
“One of the best ways to boost productivity and workforce participation is to provide more choice and more support for families, and more opportunity for women.”
Some employers with paid parental leave schemes already pay super on top. These new laws would ensure parents receiving government-funded leave would get the same benefit.
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Women $50,000 worse off
New analysis by Super Members Council found Australian women have about $50,000 less superannuation than men when they are nearing retirement.
It found the gender super gap “dramatically widens” when women reach their 30s and take time out of the workforce to raise kids. It then reaches a peak of $57,600, or 31 per cent, during the ages of 55 to 59.
Super Members Council CEO Misha Schubert urged the government to swiftly pass the “historic reform” and said it would make a considerable difference to the lives and retirement incomes of generations and could close the gender super gap by around a quarter.
“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,” Schubert said.
“It’s the next big milestone on the road to retirement gender equity - and we urge the Parliament to pass the Bill swiftly. Australia must continue to make major advances like this to ensure all women can have a financially secure retirement.”
Parental leave expanded to six months
Commonwealth paid parental leave will be expanded to six months by July 2026, with the payments increasing to 22 weeks this year.
“We know paid parental leave is vital to the health and wellbeing of families, parents and children. Not only is it good for family, but it’s also good for our economy,” Rishworth said.
The leave is paid at the national minimum wage and can be shared by both parents. Currently and for the 2024-25 financial year, two weeks of leave are set aside for the second parent who isn't using the majority of the leave on a "use it or lose it" basis. Single parents can get the full amount.
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