Reissue – updated with new ATO tax data released today
From July 1, working parents will now be paid super when they take leave to care for their babies – a reform that will boost a mother-of-two’s retirement savings by about $14,800 and help to fix gender inequity.
Until now, parental leave was the only type of paid leave that didn’t attract super — whether funded by employers or the government.
That changes from July 1, with superannuation now paid on Commonwealth Parental Leave Pay — a long-overdue reform that will meaningfully reduce the gender super gap.
Paying super on the Commonwealth parental leave scheme will benefit around 200,000 Australian mothers each year. Around 95 per cent of Commonwealth Parental Leave Pay will flow to women.
It will narrow the gender super gap by around a quarter, which is currently about $50,000 for Australians nearing retirement (Table 1).
Despite Australian women – on average – living longer than men and retiring sooner, women have about a quarter less super than men as they approach retirement.
New Super Members Council analysis shows the gender super gap dramatically widens when women reach their 30s – this is the decade many women take time out of the paid workforce to raise children.
At a state level, West Australia has the widest gender super gap of all states at 33 per cent, while ACT has the lowest at 6 per cent. (Table 2)
Super Members Council CEO Misha Schubert said the start of paying super on paid parental leave was an historic achievement that would deliver compound investment returns throughout parents’ lives.
“We’re not talking baby steps here – this is a huge stride forward to tackle women’s retirement inequity,” she said.
“This reform will make millions of women thousands of dollars better off in retirement, helping to narrow the gender super gap,” she said. “It’s going to be transformative to help to tackle gender inequity in retirement.”
Having secured super on paid parental leave, the Council’s advocacy will now turn to another key lever to narrow to the gender super gap – championing a boost to the Low-Income Super Tax Offset (LISTO).
The LISTO is a super tax refund for low-income workers that mostly benefits women, but it has been frozen for 13 years and not increased in line with tax brackets or rises in the Super Guarantee rate.
And when the coming low-income tax breaks take effect over the next two years, low-income workers will be paying more tax on super than on their take-home pay – which must be fixed urgently.
SMC analysis shows that a female worker in the bottom 20% of wage earners could be up to $30,000 or 12% better off at retirement by lifting the LISTO to $810 a year and paying it to workers earning up to $45,000.
If a LISTO bump was combined with super on parental leave, women in the lowest 10 per cent of wage earners would see a 21 per cent boost in their super balance at retirement.
“There is more work to do to reverse the financial ‘motherhood penalty’ women experience in the early years of having children, which adds up over their working lives,” Ms Schubert said.
“Lifting the Low-Income Super Tax Offset is the next logical step for the Government to tackle women’s retirement poverty and help more than 700,000 low-income women to have more financial independence and security when they retire.”
Table 1: Gender super gap by age and median balances
|
Age |
Male |
Female |
Gender gap ($) |
Gender gap (%) |
|
18-24 |
$5,400 |
$5,000 |
$400 |
7% |
|
25-29 |
$19,200 |
$19,200 |
$0 |
0% |
|
30-34 |
$41,300 |
$36,000 |
$5,300 |
13% |
|
35-39 |
$74,100 |
$57,600 |
$16,500 |
22% |
|
40-44 |
$108,300 |
$79,400 |
$28,900 |
27% |
|
45-49 |
$144,300 |
$101,900 |
$42,400 |
29% |
|
50-54 |
$177,200 |
$122,200 |
$55,000 |
31% |
|
55-59 |
$202,600 |
$140,700 |
$61,900 |
31% |
|
60-64 |
$219,800 |
$163,200 |
$56,600 |
26% |
Source: ATO Taxation Statistics, 2022-23.
Table 2: Gender super gap by state and median balances
|
State |
Men |
Women |
Gender gap ($) |
Gender gap (%) |
|
NSW |
$67,300 |
$55,200 |
$12,100 |
18% |
|
VIC |
$66,900 |
$54,500 |
$12,400 |
19% |
|
QLD |
$70,500 |
$54,300 |
$16,200 |
23% |
|
SA |
$72,200 |
$62,000 |
$10,200 |
14% |
|
WA |
$74,200 |
$49,800 |
$24,400 |
33% |
|
NT |
$47,700 |
$39,800 |
$7,900 |
17% |
|
TAS |
$71,500 |
$58,900 |
$12,600 |
18% |
|
ACT |
$90,200 |
$84,500 |
$5,700 |
6% |
|
All states |
$68,600 |
$54,300 |
$14,300 |
21% |
Source: ATO Taxation Statistics, 2022-23 issued on 27 June 2025.
The opinions above are those of the author in their capacity as spokesperson for Super Members Council (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.
Contact details:
Mike Dolan
0474 909 471
[email protected]
