The Federal Government has announced a landmark reform for paid parental leave to include superannuation which is set to be enacted on July 1, 2025. 

The reforms have long been campaigned for by the Women’s Economic Equality Taskforce and other associations. 

The Centre for Women’s Safety and Wellbeing says it welcomes superannuation included in paid parental leave and that is it long overdue. 

“Women are persistently and overwhelmingly less financially secure than men in our community,” says the CWSW in a statement to the Western Independent. 

“This is driven by factors like the gender pay gap, lower participation rates in the workforce and time out of the workforce for women to raise families and children.”

The CWSW says parental breaks impact women’s long-term finances and that financial security is crucial in protecting women from violence.

“Women’s economic empowerment plays a crucial part in preventing violence against women and children, so they have more options to escape violence,” the CWSW says. 

Economics Professor Alison Preston says the reforms will help improve women’s superannuation savings as there will still be a contribution, which will accumulate in compound interest. 

“People are initially stunned by the gender pay gap, and superannuation gap, until you show them the data,” she says.  

She says financial independence for retirement is important. 

Economics researcher Silvia Salazar says the gender pay gap has multiple causes.

She says when women have children, they take time off work which hinders their overall superannuation savings. 

Hear more from Silvia Salazar.

This is a big contribution to the difference between men and women’s superannuation savings, says Dr Salazar. 

“Once you have children the penalty is way too high as women often take to part-time or flexible work, which hinders their career progression,” she says.

Dr Salazar says an issue can be that paid parental leave is minimum wage and that superannuation will be paid on that minimum wage income. 

“Unfortunately, we know that you’re probably earning more,” she says. 

Dr Salazar says whilst the change will be beneficial the difference will still be there and it can’t be perfected. 

For more information visit the official government website and the Workplace Gender Equality Agency website for the recent gender pay gap findings.