Paying superannuation on Commonwealth Paid Parental Leave payments will make a significant difference to the retirement savings of older women, COTA Australia says.
The Senate today passed the Federal Government’s legislation that will see 12 per cent superannuation paid on paid parental leave from 1 July 2025.
Chief Executive of COTA Australia – the leading advocacy organisation for older people – Patricia Sparrow said the move is a step towards bridging the retirement savings gender gap.
“The introduction of superannuation on government paid parental leave is a game-changer and will make a big difference to the lives of many women,” Ms Sparrow said.
“We know that at the moment, women retire with an average of 25 per cent less superannuation than men. There are many factors that contribute to that, but a significant one is the time women often take out of the workforce to have children.
“The financial impact on parents – more often than not women – taking time out of the workforce to have children is huge and there’s a compounding effect across women’s working lives. Finally paying superannuation on paid parental leave will make a big difference to that.
“Having and raising children shouldn’t come at the cost of a dignified retirement.
“This is a big win for all the women, including many older women already in retirement, who have campaigned tirelessly over the year for this important reform.”
Ms Sparrow emphasised that while this change is significant for future retirees, more immediate action is needed to address the current cohort of older women facing financial challenges in retirement.
“It’s crucial to recognise that this reform, while important, doesn’t directly benefit the current generation of older women who are already retired or nearing retirement. Many of these women face significant financial hardship due to lifelong inequities and gaps in superannuation coverage. We urgently need targeted measures to support them as well.”
Ms Sparrow said while more work needs to be done to address the gender gap in retirement incomes, the Albanese Government should be commended for this historic move.
“Of course this won’t solve all of our retirement savings issues, but it’s a major step forward for gender equity and in the push to ensure all women can retire with dignity.
“The Federal Government should be congratulated on delivering this significant reform. It’s a huge step forward for gender equality in this country.”
Media contact: Tamara Kotoyan, 0430 291 890 or Alana Mew, 0419 929 722
