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Women’s retirement balances to be boosted through changes to Paid Parental Leave scheme

07 March 2024

The Commonwealth Government’s commitment to pay superannuation on paid parental leave is a watershed moment for Australia’s parental leave and retirement savings schemes, Aware Super says.


Super on paid parental leave can help in closing the gender retirement gap, modelling shows.

Aware Super has welcomed the Commonwealth Government’s commitment to pay superannuation guarantee contributions on its Paid Parental Leave (PPL) scheme.

“We welcome, and applaud, the commitment to pay superannuation contributions on the Commonwealth Government’s Paid Parental Leave scheme,” said Aware Super’s Chief Executive Officer, Deanne Stewart.

“Paying superannuation guarantee contributions on paid parental leave has long been a sensible, responsible step to take to help close Australia’s national gender pay gap – and improve retirement outcomes for women.

"Posing the gender retirement gap, which today sees women retiring with around 25 per cent less super than men."

Modelling by Aware Super indicates that a woman on a low income with two children, accessing 26 weeks of Commonwealth Paid Parental Leave, would be $10,700 better off at retirement. Due to the compounding of investment returns, the benefit to each individual would be more than twice the cost of making the payment.

There is currently no requirement for employers to pay superannuation on parental leave, however 86 per cent of employers who offer PPL to staff also pay super on those payments1.

“We congratulate Senator Katy Gallagher, and the Commonwealth Government, on this historic enhancement to both Australia’s parental leave and retirement savings schemes. But we all know that this is not a problem that government can solve on its own, and it’s time more of our nation’s employers followed the Government’s lead on this important initiative,” Ms Stewart said.

Employer-paid parental leave is the only form of paid leave that does not attract superannuation payments.

Currently, 13 per cent of employers pay superannuation on unpaid parental leave, however this could also make a material difference to retirement outcomes. To illustrate: Aware Super’s modelling indicates that a 30-year-old primary school teacher taking 18 months parental leave could have an additional $26,000 in their super balance at retirement if super was paid on the unpaid portion of the leave.

This benefit is almost three times the cost to the employer of paying the super guarantee during this period, due to the compounding of investment returns.

Media enquiries: Grant Smith,


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