Australian unions have welcomed the federal government’s announcement that superannuation will be paid on top of government paid parental leave from 1 July 2025.
Australian Council of Trade Unions (ACTU) Assistant Secretary Joseph Mitchell said the paying of superannuation of Commonwealth Paid Parental Leave is a phenomenal policy for working women and an important step towards narrowing the gendered retirement gap experienced by working women.
“We commend the Albanese government for taking this historic step and recognise the tireless campaigning by union members over the years to make this a priority issue,” Joseph said.
“So many women retire with far too little, and this will make an enormous difference for hundreds of thousands of women and families every year, who will no longer miss out on vital contributions to their nest egg while they take parental leave,” he said.
Dignity in retirement
The announcement comes ahead of International Women’s Day (IWD) 2024 and is an outstanding win after more than a decade of union campaigning to achieve equal retirement outcomes for women.
The change means eligible working parents with babies born from 1 July 2025 will receive 12 per cent superannuation on top of the 20 weeks of Commonwealth paid parental leave.
The improvement is estimated to increase a mother of two children’s retirement savings by over $14,000 and boost the super balances of approximately 180,000 women annually.
99.5 per cent of Commonwealth Paid Parental Leave payment recipients are women, which means women bear the brunt of the inequity of lost super due to time out of the workforce.
Government paid parental leave is more likely to be taken by those with lower-than-average incomes, meaning the win will greatly benefit low-income families.
Unions winning for women
Independent Education Union of Australia (IEUA) Federal Assistant Secretary Veronica Yewdell said the inclusion of super on paid parental leave was the latest in a range of recent enhancements achieved by working women and unions.
“As a union of 72 per cent women, the IEU played a critical role in securing stronger rights to flexible work, new limits on the use of fixed-term contracts and access to multi-employer bargaining in feminised sectors like early childhood education,” Veronica said.
“IEU members commend the federal government’s announcement, which is an essential step to help address the retirement poverty suffered by women workers and builds on similar gains won by unions in collective bargaining,” she said.
While the gender pay gap shows some improvement, particularly in education, lower earnings by women remain a national shame, with women earning on average (across all industries) $26,393 per year.
New WGEA reporting requirements have demonstrated positive overall trends in the education sector while, at the same time, highlighting embarrassing failings by many school employers.
IWD 2024: Inspire Inclusion
Veronica said IWD on Friday will hold special significance for women in unions this year.
“It’s an opportunity to reflect on the incredible achievements of women fighting for greater equity, fairness and social inclusion while we also recommit to taking the action needed to hasten the rate of change for women and girls worldwide,” she said.
“Our union will continue to be the voice for women and girls in education and the wider community as our collective efforts strive to #InspireInclusion in our homes, schools and workplaces.”
Our union calls on all political parties to support the payment of super on top of Commonwealth paid parental leave, regardless of the next federal election outcome.
