In a huge win for working mothers, 12 per cent superannuation will be paid on Commonwealth Paid Parental Leave (PPL) from 1 July 2025 – something union members have spent years campaigning to achieve.
The win comes despite Opposition Leader Peter Dutton attempting to water down the legislation, amendments that would have seen new parents forced to choose between retiring with dignity, taking a one-off lump sum, or receiving an extra two weeks of PPL.
These amendments, which ultimately failed, completely undermined the whole point of the government’s legislation: to break the cycle of women retiring in poverty.
FSU National Secretary Julia Angrisano said the FSU, along with the broader union movement, has led the charge for years to secure superannuation on PPL, and it was wonderful to see the Federal Government finally doing something about it.
“If there was ever something the government could do to help close the gender pay gap, paying super on Commonwealth PPL is it,” said Ms Angrisano.
“We know that on average, women retire with 25 per cent less in superannuation than men.
“What’s more, not having superannuation paid on Commonwealth PPL leaves so many Australians tens of thousands of dollars worse off when they retire, due to the absence of compounding interest.”
According to the Federal Government, more than $3000 will be added to eligible parents’ superannuation accounts once the Commonwealth PPL scheme reaches 26 weeks. That money would then be subject to compounding interest over that parent’s working lifetime, making a substantial difference to their retirement savings.
According to an AustralianSuper report titled The Future Face of Poverty is Female1, data showed that the gender pay gap was smallest when women and men were in their early 20s, as well as at the end of their working lives. It was around 28 years that weekly earnings diverged between men and women.
“It’s a reality that goes to the heart of the problem, and it demonstrates the importance of initiatives like ensuring workers, particularly women, don’t have to sacrifice their super to care for their newborn,” said Ms Angrisano.
The Albanese Government’s legislation to pay super on Commonwealth PPL is in addition to other PPL reforms, including expanding the PPL scheme to 26 weeks from 1 July 2026.
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