Minister for Finance Katy Gallagher

The Albanese government has announced it will pay super on taxpayer-funded parental leave, earning praise from executives and lobbyists in the super industry, who have pushed for the policy for decades. 

On the eve of International Women’s Day on Thursday, Minister for Finance Katy Gallagher announced that parents will receive super on payments issued under the government’s Paid Parental Leave (PPL) scheme from 1 July, 2025.  

The contribution will be paid for the 20 weeks covered by PPL, and the amount of leave is set to be increased to 26 weeks from July 2026.  

Some individual funds and industry groups have long called for the change on the basis of improving retirement outcomes. According to HESTA modelling, paying super on parental leave could boost a typical member of the fund’s retirement saving by up to 4.5 per cent if they have three children. 

While the super sector has embraced the news, economic gender equality activist and former journalist Bianca Hartge-Hazelman said the 2025 timeline is “a real concern” and lends the policy to become another shaky pre-election promise. Her business Financy publishes a quarterly tracker on the economic progress of women.  

The doubt is not unfounded since super contribution in PPL was initially touted but dropped ahead of the 2022 election by Labor, leaving super funds disappointed. The next federal election will take place on or before mid-2025. 

“I know super funds are excited, because it’s a guaranteed amount of money going in, and from a pure gender equity advocacy point of view. It’s fantastic news. But I’m concerned about whether it will be realised,” she tells Investment Magazine 

“What happens if we have a change of government? Or could we see this government backflip like the recent tax cut? That is what worries me.” 

Hartge-Hazelman calls for super funds to hold the government to account and stress these policy measures’ social importance.  

“There’s pressure on them to be doing more from an ESG perspective, and this ticks that social box in particular… and it doesn’t just benefit women, it benefits men and families more broadly,” she says.  

“Funds need to keep that PR pressure on governments to deliver and to understand that it’s what I would wager a significant number of voters want. It’s the right thing for Australian families, and it should be implemented immediately.” 

According to a Super Members Council of Australia analysis, women in their 40s and 50s tend to be hit the hardest by super gender pay gaps. 

However, the 30s was the only group to have seen a bigger gender super gap in recent years – mostly due to not being paid super on parental leave, SMC said.  

Time series of gender super gap by age. Source: SMC analysis of the ATO 2 per cent sample files.

Some funds are already eyeing for more actions in the private sector.  

“Now that we have certainty that super will be paid on Commonwealth Parental Leave, we want to encourage further discussion on the payment of super on employer-funded parental leave. We recognise many employers already choose to pay this important benefit,” said REST chief executive Vicki Doyle.  

Funds including AustralianSuper, UniSuper, Aware Super, HESTA and retail player Insignia Financial have also welcomed the new policy.  

ASFA’s newly minted CEO Mary Delahunty said “it’s about bloody time” the policy comes into place.  

“A new generation of women who receive the full benefit of the Superannuation Guarantee payment on their Government Paid Parental Leave stand to add thousands to their retirement balances,” she said.  

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