Govt introduces parental leave super legislation to Parliament

The Federal Government has fulfilled its promise to bridge the gender superannuation gap and improve women’s retirement outcomes by introducing legislation to Parliament on Thursday to enforce compulsory superannuation payments on Commonwealth Paid Parental Leave (PPL) from 1 July 2025.

The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 will allow superannuation contributions to be included in the government’s PPL scheme from the next financial year, providing approximately $30,000 more in retirement savings per family per child according to advocacy group, The Parenthood.

The move was hugely welcomed by several of industry associations, advocacy groups and superannuation funds, hailed as a “major milestone” to addressing and repairing the systemic inequality faced by women when it comes to retirement.

“We’re committed to supporting all our members to reach their retirement goals and this decision will not only make superannuation fairer, but improve economic security for women’s super and retirement,” Australian Retirement Trust (ART) Chief Member Experience Officer, Simonne Burnett, said.

“Every dollar towards superannuation counts. Women invest so much of their lives into raising their families and the same needs to be provided in return to safeguard their financial security later in life.”

“The Government’s paid parental leave scheme would increase the financial security and wellbeing of Australian parents, especially for women, who head into retirement with around 30 per cent less superannuation savings,” CEO of the Financial Services Council (FSC), Blake Briggs, said.

“This will make a significant difference for primary carers who may not otherwise receive superannuation contributions when they take leave from the workforce to raise a family.

“It plays a role in bridging the retirement savings gender gap and improving gender equality in Australia.”

Vicki Doyle, Rest’s chief executive, said it was “unfair” that the PPL scheme was the last remaining common form of leave to not have access to compulsory superannuation contributions.

“This has led to many female Rest members retiring with less super than our male members. In fact, the gender super gap for our members approaching retirement is 27 per cent – a figure that has widened in recent years,” she said.

“We represent 2 million members, of whom more than 1 million are women. This reform needs to pass as soon as possible so that, from next July, our members on parental leave can start benefitting from the compounding returns on their new entitlements.

“This reform will help close the gender super gap and make the super system fairer and more equitable for Rest members and Australians. This was the priority recommendation in Rest’s Pre-Budget Submission earlier this year due to its potential to make a real difference to the financial outcomes of many Rest members.

“We congratulate the Government for introducing this legislation and encourage the Parliament to pass it at the earliest opportunity.”

HESTA’s CEO, Debby Blakey, said the legislation introduced was a “milestone [that] brings us one step closer to addressing a long-standing gender-blind spot in our retirement system”.

“For more than 13 years, HESTA – along with many other sector voices – tirelessly advocated for this important equity measure. In March, we were thrilled to welcome the Federal Government’s announcement that super will be paid on the Commonwealth Parental Leave Pay Scheme, which will boost women’s retirement savings and help close the gender super gap,” she said.

“More than 80% of our one million-plus members are women, with many working in typically lower-paid industries such as aged care or early childhood education. Paying super on paid parental leave will help our members add to their retirement accounts, narrowing the gender super gap and making Australia’s super system fairer.”

“This historic reform will make a vast difference to the lives and retirement incomes of generations of Australian women,” Super Members Council CEO, Misha Schubert,  said.

“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.

“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.”

CEO of advocacy group The Parenthood, Georgie Dent, also highlighted how women not being able to access super contributions on the PPL scheme was only one of many financial hurdles that can significantly set them back on their path to retirement.

“The reality is that today in Australia there are so many financial hurdles to having a family – from the cost of early childhood education and care, to lost earnings while out of the workforce,” she said.

“Unfortunately, it is women who suffer the most financially, as their income drops dramatically after having children. On average Australian women retire with 25 per cent less super than their male counterparts.

“A big part of that is explained by women taking breaks from the paid workforce while they’re raising children and then not earning super. This bill is a significant win in redressing the inequity of missing out on super while on paid parental leave and for  gender equity.”

​Dent also said the introduction of the legislation was “a powerful message that raising children is a valuable undertaking that deserves to be supported and compensated”.

“The inclusion of superannuation payments would reinforce that paid parental leave is not a welfare payment, but a workplace entitlement just like annual leave or sick leave,” she said.

“It would give women more economic security in retirement, encourage men to play a more equal role in parenting by taking leave, and make having children a more financially viable option for those who wish to.

“We hope all members of parliament will do the right thing and support this bill – not doing so would be a betrayal of families and a backwards step in the pursuit of gender equity.”