One year after super was introduced on Commonwealth Paid Parental Leave and the super guarantee reached 12 per cent, HESTA said the landmark reforms are helping improve women’s retirement outcomes, with modelling showing workers beginning their careers under the new settings could retire with substantially higher balances.
The fund’s modelling found women who start work with a 12 per cent super guarantee in place for their entire working lives could retire with $712,000 in super, compared with $301,000 for women modelled to have retired in 2025. That represents a potential $411,000, or 137 per cent, improvement in retirement savings.
The reforms are also expected to deliver immediate benefits for parents taking Commonwealth Paid Parental Leave.
Based on HESTA’s previous modelling using 18 weeks of leave, super paid on parental leave could add around $6,500 to retirement savings for a typical member, rising to almost $13,000 for someone who takes leave for two children.
Australians who received government-funded Parental Leave Pay during the 2025-26 financial year are set to receive their first super contributions from the Australian Taxation Office following the end of the financial year.
HESTA chief executive, Debby Blakey, said the first anniversary of the reforms marked an important milestone for the fund’s more than one million members, around 80 per cent of whom are women working in sectors such as aged care and early childhood education.
“One year in and we’re starting to see the positive impact these important reforms are having – and will continue to have – on women’s retirement outcomes while making our super system fairer,” Blakey said.
“Women have for too long retired with far less super than men, simply because the system didn’t account for the reality of their lives. These two reforms are starting to change that.”
HESTA said it had long advocated for superannuation to be paid on Commonwealth Paid Parental Leave, arguing the previous arrangements had resulted in Australian mothers missing out on more than $3 billion in retirement savings since the government scheme began in 2011.
The fund said the increase in the super guarantee to 12 per cent would also deliver compounding benefits over members’ working lives.
“This reform will see money flow into the super accounts of mothers who previously would have missed out simply for taking time to care for a new baby,” Blakey said.
“The 12 per cent guarantee means women starting work today could retire with more than double the amount of super compared to female workers who retired last year.”
Looking ahead, HESTA also welcomed upcoming changes to the Low-Income Superannuation Tax Offset (LISTO), which it has advocated for. From 1 July 2027, the maximum LISTO payment will increase from $500 to $810 and be permanently linked to personal income tax thresholds to help ensure low-income earners do not pay more tax on their super than on their take-home pay.
Blakey said further reform was still needed to improve retirement outcomes, noting HESTA is supporting research into a model for superannuation carer credits to assist people whose workforce participation is reduced by unpaid caring responsibilities.
“Super on paid parental leave, LISTO changes and the 12 per cent super guarantee should be seen as the foundation for further progress, not the end. There are still policy settings that disadvantage women and those on lower wages, and HESTA will keep advocating to ensure the system works for everyone,” Blakey said.
