Time to read : 2 Minutes
While the gender pay gap is a hot topic, the Labor government has revealed plans for superannuation to be paid on the paid parental leave (PPL) scheme.
This initiative was a key recommendation in the 2023 report by the Women’s Economic Equality Taskforce and has been campaigned for by unions and women’s movements for as long as I can remember.
Minister for Women, Senator Katy Gallagher said that women taking time off work to raise children often translates to women retiring, on average, with 25% less superannuation.
When you consider that difference in real dollars, it’s huge and enough to make your blood boil. For every $100,000 men have been accumulating in their super, women have $25,000 less in theirs.
"Paying super on government parental leave is an important investment to help close the super gap and to make decisions about balancing care and work easier for women,” Minister Gallagher said.
Additional increases to Paid Parental Leave
With approximately 180,000 families to benefit from the proposed contribution to PPL, it’s a super deal and there are some additional sweeteners.
On Monday 18 March 2024, a bill to expand PPL was passed giving families up to an additional six weeks. Here’s how you could benefit.
From 1 July 2024, families can access an extra two weeks of PPL (22 weeks).
From 1 July 2025, it increases to 24 weeks.
From 1 July 2026, it increases to 26 weeks.
Yes, but: Superannuation contributions on extra PPL may not make a massive difference to all families, but every cent counts. It’s certainly a step in the right direction to help narrow the gender pay gap.
The bottom line
If family planning is on your radar, this initiative may have you putting your plans on hold… temporarily. After all, who wouldn’t want to maximise the financial benefits?
Be aware: while legislation on the additional leave has just been introduced, superannuation contributions on PPL are yet to come into play, and there are no guarantees the Coalition will adopt this policy if they win the next election.
