A landmark step towards closing the gender super gap
In a significant move towards closing the gender superannuation gap, the Australian Parliament has passed legislation to pay super on Commonwealth Paid Parental Leave (PPL). This landmark decision, which passed through the Senate without opposition, will come into effect on 1 July 2025.
What does this mean for you?
This new law will be a game-changer for many REI Super members, particularly women. The latest Workplace Gender Equality research showed that women's superannuation balances at retirement are 23.4% lower than those of men¹. A large component of this disparity is due to career breaks for raising children, during which no super contributions are made. The new legislation aims to address this imbalance by ensuring that super is paid on PPL, providing a much-needed boost to retirement savings during these crucial periods.
Maximising your super during Parental Leave
While the new law is a positive step forward, there are several other strategies you could employ to continue growing your super:
Voluntary contributions: Consider making voluntary contributions to your super account. Even small, regular contributions can make a significant difference over time.
Spouse contributions: If your partner is working, they can make contributions to your super account. This not only boosts your super but may also provide tax benefits for your partner.
Government co-contributions: If you’re eligible, take advantage of the government co-contribution scheme. For every dollar you contribute, the government may contribute up to 50 cents, up to a maximum amount.
Salary sacrifice: If you’re planning your parental leave in advance, consider setting up a salary sacrifice arrangement with your employer. This allows you to contribute a portion of your pre-tax salary to your super, potentially reducing your taxable income.
Superannuation splitting: REI Super and some other funds allow you to split certain types of your pre-tax super contributions with your partner. This can be particularly beneficial if one partner is taking time off work.
For more information on these simple steps to grow your super, visit our website.
Looking ahead
The introduction of super on PPL is another step towards achieving gender equality in retirement savings. At REI Super, we are committed to supporting our members through every stage of their lives, including parental leave. We encourage you to explore the various ways to maximise your super contributions and take full advantage of the new legislation once it comes into effect.
For more information and personalised advice, don’t hesitate to contact our friendly team on 1300 13 44 33. Together, we can ensure a more secure and equitable financial future for all our members.
1 https://www.wgea.gov.au/publications/australias-gender-equality-scorecard
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The information contained in this article does not constitute financial product advice. However, to the extent that the information may be considered to be general financial product advice, REI Super advises that REI Super has not considered any individual person’s objectives, financial situation or particular needs. Individuals need to consider whether the advice is appropriate in light of their goals, objectives and current situation. Members should obtain and read REI Super's Product Disclosure Statement and Target Market Determination before making any decisions. REI Superannuation Fund Pty Ltd ABN 68 056 044 770 AFSL 240569. RSE L 0000314 REI Super ABN 76 641 658 449 RSE R1000412 MySuper unique identifier 76641658449129. September 2024.