Approximately 180,000 families will soon receive superannuation on top of paid parental leave, as part of the federal government's latest initiative to bridge the gender pay gap.
Starting in July next year (2025), this federal budget measure will allocate $1.1 billion over four years to those on Commonwealth-funded paid parental leave (PPL), with an additional $623.1 million annually to sustain the scheme.
This initiative builds on the government's existing plan to extend the amount of paid leave new parents can take under the Commonwealth scheme to 26 weeks.
The payments, previously announced but not costed, aim to improve retirement outcomes for women, according to a joint statement by Minister for Women Katy Gallagher and Treasurer Jim Chalmers.
The statement highlights that one-third of the gender pay gap is due to women taking time out of the workforce for family care, resulting in lower pay and fewer career progression opportunities.
"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 percent less super than men."
Despite a 0.6 percent increase in men taking primary carer parental leave in 2022-2023, women still constitute 86 percent of employees opting for carer leave, according to the Household, Income and Labour Dynamics in Australia (HILDA) survey.
The suggestion to offer super on PPL was recently made by the women's economic equality task force, which was tasked by the government to recommend ways to improve women's financial positions. Labor had previously committed to including super on government PPL ahead of the 2019 election but abandoned the proposal at the last federal election due to cost concerns.
Currently, under the 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. This will increase to 26 weeks by July 2026.
The superannuation boost comes as the budget notes a projected decrease in PPL expenditure by $92.1 million in 2024-25 and $521.3 million over five years from 2023-24 to 2027-28, largely due to lower-than-expected birth numbers.
This initiative is part of a broader budget plan aimed at addressing gendered roles in unpaid care. Women spend, on average, 11 more hours per week caring for children, according to HILDA.
Other budget changes include investing $87.2 million to attract and retain aged care staff, of whom 85 percent are women.
Comments