Fresh blow ahead of $14,500 superannuation boost for 180,000 Aussies: 'Deeply worrying'
Superannuation will be paid on government paid parental leave from July 1 this year. The change passed through parliament last year, but the Coalition has confirmed it plans to change the scheme should they win the election.
Around 180,000 Australian families are expected to benefit from the scheme each year. The Super Members Council calculated it would boost a mum-of-two's retirement savings by about $14,500.
New Coalition costings confirm plans to make paying super on paid parental leave optional. It has been proposed that families would be able to take extra weeks off work or get a $2,900 lump sum payment instead of being paid super.
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Super Members Council CEO Misha Schubert has urged for the policy to be reversed and said it undermined the purpose of the policy, which was to boost the retirement savings of mums and reduce the gender super gap.
'Telling new mums to cash out their parental leave super payments is a deeply worrying departure from the longstanding bipartisan principles of universality and compulsion in super that are key to a more financially secure retirement for all working Australians,' she said.
'Why is it that women are being asked to choose between financial security now and in retirement?'
The ACTU said the move represented a 'large hit' on working women and their families and meant $158 million would no longer flow into the super accounts of working women and their families over the next four years.
'Cutting super on paid parental leave not only hurts women, it makes no sense if the goal is to lift workplace participation,' ACTU President Michele O'Neil said.
Women In Super found that due to compound interest, the impact on a woman's finances would be $7,500 at retirement, not just the $2,900 lump sum amount.
Time out of the workforce is a key reason why woman approach retirement with around a third less super than men.
Super Members Council analysis found the typical woman was retiring with about $50,000 less than their male counterpart.
From July 1, parents who access government paid parental leave will receive superannuation on their payments.
The government's legislation passed parliament last year, so the change will come into effect regardless of who wins the election.
Parents will receive 12 per cent of their payment as a contribution to their super fund.
That's because the super guarantee rate is also increasing from 11.5 to 12 per cent on July 1 for all workers.
The amount of parental leave pay available will also increase to 24 weeks, up from 22 weeks. The amount of leave will increase by two weeks until it reaches 26 weeks from July 2026.
The amount is shared between parents. From July 1, three weeks of leave will be reserved for the parent who is not using the majority of the leave.
Parental leave pay is paid at the national minimum wage and usually. changes on July 1 each year.
It is currently $915.80 per five day week.
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