Superannuation to be added to paid parental leave as part of federal budget in gender pay-gap pledge

Superannuation to be added to paid parental leave as part of federal budget in gender pay-gap pledge
  • PublishedMay 15, 2024

About 180,000 families will soon be paid superannuation on top of paid parental leave, as part of the federal government’s latest pledge towards bridging the gender pay gap. 

The federal budget measure — slated to begin in July next year — is a $1.1 billion promise over four years to those on Commonwealth-funded paid parental leave (PPL), plus $623.1 million each year ongoing, in order to implement the scheme.

The measure builds on the government’s already-announced plan to increase the amount of paid leave new parents can take under the Commonwealth scheme to 26 weeks.

The payments, which had been previously announced but not given a costing, are intended to improve retirement outcomes for women, according to a joint statement by Minister for Women Katy Gallagher and Treasurer Jim Chalmers. 

One-third of the gender pay gap is attributable to women taking time out of the workforce to care for family, resulting in less pay and career progression opportunities, according to the statement. 

Katy Gallagher crosses her arms in front of Parliament House.
Katy Gallagher says the budget pledge will help close the superannuation gap for women. (ABC News: Ian Cutmore)

“The undervaluing of paid and unpaid care is a driver of women’s lower incomes and lifetime earnings,” the statement reads.

“This budget continues our historic reform of paid parental leave by introducing a superannuation guarantee equivalent payment on government-funded paid parental leave for parents of babies born or adopted on or after 1 July, 2025.

“This is a strong signal that care is valued and will help close the superannuation gap, which currently sees women retire with around 25 per cent less super than men.”

While the amount of men taking primary carer parental leave increased by 0.6 per cent in 2022-2023, women still make up 86 per cent of employees taking the carer leave option, according to statistics from the Household, Income and Labour Dynamics in Australia (HILDA) survey. 

The suggestion for super to be offered on PPL was most recently made by the women’s economic equality task force, which was asked by the government to recommend ways to improve the financial position of women.

Ahead of the 2019 election, Labor had committed to including super on government PPL but at the last federal election the party ditched the proposal, citing costs.

Under the current PPL program, a couple with a newborn or newly adopted child can access up to 20 weeks of paid leave at the national minimum wage.

That will rise to 26 weeks by July 2026.

The super boost also comes as the budget notes PPL is expected to decrease by $92.1 million in 2024-25 and $521.3 million over five years from 2023-24 to 2027-28, which it says largely reflects lower-than-expected birth numbers. 

The cash splash is part of a raft of budget plans aimed at improving gendered roles in unpaid care, with women spending 11 more hours per week, on average, caring for children, according to HILDA. 

Other changes include investing $87.2 million into attracting and retaining aged care staff — of which 85 per cent of the current workforce are women. 

SOURCE: ABCNEWS

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