(Cth) Introduce Superannuation on the Carer Payment

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Author: Sarah Frost & Mecca Setiawan | Publish date: 17/2/2026

• P: Superannuation is not paid on the Carer Payment.

• S: The Minister for Social Services should amend Part 2.5 of the Social Security Act 1991 (Cth) to introduce a superannuation entitlement on the Carer Payment.

Problem Identification: 

Part 2.5 of the Social Security Act 1991 (Cth) outlines payability details for the Carer Payment. However, it does not include a provision for superannuation contributions. 

According to Carers Australia, this means that carers lose thousands of dollars in superannuation earnings, resulting in substantial inequity and reduced economic security at retirement age. KPMG has highlighted that this disproportionately impacts women and younger carers. Women With Disabilities Australia (WWDA) has further noted that this exacerbates financial uncertainty for carers with disabilities.

Context: 

Superannuation refers to a ‘scheme that provides retirement benefits based on accumulated employer contributions, and any investment earnings on those contributions.’

The Carer Payment refers to government income support for people who are unable to undertake substantial paid employment because they provide ‘constant care to someone with disability or a medical condition, or an adult who’s frail aged.’ The Australian Institute of Health and Welfare (AIHW) has estimated that there were 3 million informal carers in 2025, of whom approximately 325,000 were recipients of the Carer Payment.

Arguments:

Carers Australia has highlighted that informal carers who take time out of the paid workforce receive fewer superannuation contributions, resulting in significant financial inequity over a lifetime. Their commissioned research found that primary carers will lose, on average, $175,000 in superannuation by age 67. The research further demonstrated a clear link between the duration of caregiving and the loss of retirement savings, with those providing care for the longest experiencing shortfalls of over $444,500. According to researchers at Western Sydney University, one carer, aged 56, has said: ‘I have been a carer for over 13 years… so my prospect of earning an income and saving is bleak.’

According to WWDA, this financial inequity disproportionately impacts women and carers with disabilities. The Super Members Council has highlighted that ‘informal caregiving is distinctly gendered, with women making up over two-thirds of primary informal caregivers.’ They argued that this is a key factor contributing to women’s lower economic security in retirement. KPMG reported that women have, on average, 23-31% less superannuation than men in the same age range. They also highlighted that women are more likely than men to become carers during their earlier working years. Moreover, Carers Australia has elaborated that early disruption to the compounding growth of superannuation ‘has potential for a more significant impact at retirement.’ Additionally, WWDA highlighted that ‘this unequal treatment deepens the retirement gap’ for the nearly 50% of carers who have disabilities themselves.

Carers Australia has argued that additional spending on superannuation contributions by the government could be offset by both current savings in paid care services and future savings in the Age Pension. They have expressed that limiting financial support for informal carers is a ‘false saving’ since it means fewer people are willing and able to become carers, in turn ‘increas[ing] … demand for substantially more expensive formal care’. They have further estimated that replacing the work done by informal carers with formal paid services could cost $110 billion or 98% of the Australian Government’s health spend for 2024-25. Additionally, modelling commissioned by Carers Australia has shown that adding superannuation contributions to the Carer Payment could ‘reduce age pension costs to the Commonwealth over the person’s remaining lifetime by up to $84,000’, compared to the $18,000 it would cost to pay superannuation on the Carer Payment. They highlighted that ‘on a lifetime cost basis, there is an actual saving from this measure.’ 

Advice/Solution Identification:

Carers Australia, The McKell Institute, HESTA, and MS Australia have all called for the government to pay superannuation on the Carer Payment. Carers  Australia has estimated that this could increase average superannuation balances at age 67 by $52,500 and ‘close the superannuation deficit for carers by about 37%.’ 

Precedent:

There is domestic precedent for receiving superannuation on government payments, and there is international precedent for offsetting the impact on carers’ retirement savings of time spent outside the paid workforce. Domestically, legislation was passed in 2024 to pay superannuation on government-funded Parental Leave. Internationally, ‘caregiver credits have become a near-universal component of public pension systems in higher-income OECD countries’, according to the Women’s Electoral Lobby. For example, France, Germany and Sweden have long-running caregiver credit programs, and the UK provides National Insurance credits for informal carers to ensure they retain eligibility for a State Pension.

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Public Support: 

1. Carers Aust

2. The McKell Institute

3. HESTA            

4. MS Australia 

5. Cost Of Caring Petition (21,130 signatures signed as of 5/2/26) 

Broad Support 

1. KPMG (Asked the government to consider this amendment)

This list reflects publicly stated positions and should not necessarily be taken as endorsement of this specific brief.

News Coverage:

• ABC - “Calls for better financial support for people caring for loved ones at home”. This article highlighted the impact of caring commitments on carers’ financial stability as well as their physical and mental health. By: Fiona Blackwood | 16 Nov 2024 - Read the article here.

• SBS - “Lyn is a full-time carer for her husband. She says being paid super would offer some relief”. This article detailed the experience of a woman who became a full-time carer for her husband after his stroke and highlighted that caring commitments contribute to the gendered superannuation gap. By: Catriona Stirrat and Svetlana Printcev | 14 Feb 2024 - Read the article here.

• ABC - “Looming crisis for older Australian women who will retire into poverty if no urgent action taken, new report finds”. This article highlighted how women’s superannuation balances are disproportionately impacted by events later in life, including caregiving. By: Yiying Li | 30 Sep 2025 - Read the article here.

• Women's Weekly - “The Cost of Caring: supporting those who support us”. This article supported a campaign for superannuation payments for carers. By: Delicia Smith | 24 Jun 2024 - Read the article here.

• The Conversation - “Being carers costs women more than $500,000 over a lifetime, leaving them with less in retirement than men”. This article highlighted how caring commitments contribute to the gendered superannuation gap. By: Myra Hamilton | 16 Dec 2025 - Read the article here.

• The Conversation - “‘Who looks after me?’ More than 40% of disability carers have disability themselves – and they need more support”. This article highlighted the needs of informal carers with disabilities and how they could be better supported. By: Susan Collings, Elisabeth Duursma, Gabrielle Weidemann, and Michelle O’Shea | 24 Sep 2024 - Read the article here.

Where to go to learn more: 

1. (2022) Caring costs us | Evaluate Inc. - This report, commissioned by Carers Australia, highlighted the impact on retirement savings of informal caring and recommended several policy solutions, including the government paying superannuation contributions on the Carer Payment. Read the report here. 

2. (2023) Towards gender equity in retirement | KPMG  - This report outlined the gendered gap in retirement savings, caused by women disproportionately assuming positions as carers, and highlighted how adding superannuation contributions to the Carer Payment could help address this. Read the report here.

3. (2024) Cost of Caring Petition | Are Media Pty Ltd - This petition and associated resources highlighted key statistics and stories of Australian carers and showed public support for paying superannuation to carers. Find the link here.  

4. (2025) Economic security in retirement | Impact Economics and Policy - This report, commissioned by the Super Members Council, illustrated how various life events and caring commitments can intersect and contribute to reduced financial security for women at retirement age. Read the report here.

5. (2020) The value of informal care in 2020 | Deloitte - This report examined the demographic trends for informal care and estimated the cost of replacing this care with a formal sector equivalent, demonstrating that informal carers save the government billions of dollars. Read the report here.

6. Social Security Act 1991 (Cth) - Read the full Act here.

Human Perspective: 

Jessica is 45 years old and caring for her elderly mother. 3 years ago, she was a Project Director, but then her mother’s fall and increasing frailty forced her to leave behind a career that she loved. Without employer contributions, her super balance stalled. On paper she is unemployed, yet in reality, she works gruelling 18 hour days as a nurse, chef, driver, bookkeeper, and patient advocate all in one. The Carer Payment barely covers her basic necessities, let alone leaving anything to save towards her retirement. Her own chronic illness is worsening under the physical and emotional strain, yet carers don’t get time off. While her peers continue to climb the career ladder, she is losing traction, and with it, her hope of ever being able to catch up on the years of lost super. Jessica does not begrudge the work, but it feels deeply unfair that the system doesn’t recognise it as such. She knows she is caught in a cruel cycle: painfully aware that the sacrifices she makes now to care for her mum, only increase the likelihood that she too will become impoverished in her older years.

To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.

Conflict of interest/acknowledgment statement: 

N/A

Support 

If your organisation would like to add your support to this paper or suggest amendments, please email Info@foreaustralia.com. 

Disclaimers

Please review all FORE disclaimers here.

Reference list: 

Australian Institute of Health and Welfare. (2019, September 11). Informal carers. https://www.aihw.gov.au/reports/australias-welfare/informal-carers

Australian Taxation Office. (2024). Superannuation on Parental Leave Pay. https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/superannuation-on-parental-leave-pay

Carers Australia. (2022, March). Summary of Findings - Caring Costs Us: The economic impact on lifetime income and retirement savings of informal carers. https://www.carersnsw.org.au/uploads/main/Files/5.About-us/Our-research/Caring-Costs-Us_Summary-of-Findings_FINAL_120422.pdf

Collings, S., Weidemann, G., O’Shea, M., & Duursma, E. (2024, September 24). “Who looks after me?” More than 40% of disability carers have disability themselves – and they need more support. The Conversation. https://doi.org/10.64628/aa.sc4h3yfsu

Department of Finance. (2025). Glossary - Superannuation. https://www.finance.gov.au/about-us/glossary/superannuation

Furnival, A., & Cullen, D. (2022, March). Caring Costs Us: The economic impact on lifetime income and retirement savings of informal carers. A report for Carers Australia. https://www.carersaustralia.com.au/wp-content/uploads/2022/04/Final-Economic-impact-income-and-retirement-Evaluate-Report-March-2022.pdf

GOV.UK. (2026). Carer’s Credit. https://www.gov.uk/carers-credit

HESTA. (2025, January). 2025-26 Pre-Budget submission. https://www.hesta.com.au/content/dam/hesta/submissions/HESTA-Pre-Budget-25-26-submission.pdf

Jankowski, J. (2011). Caregiver credits in France, Germany, and Sweden: lessons for the United States. Social Security Bulletin, 71(4), 61–76. https://www.ssa.gov/policy/docs/ssb/v71n4/v71n4p61.html

KPMG. (2023). Towards gender equity in retirement. https://assets.kpmg.com/content/dam/kpmgsites/au/pdf/2023/towards-gender-equity-in-retirement-report.pdf

MS Australia. (2023, August). Inquiry into the recognition of unpaid carers, House of Representatives Standing Committee on Social Policy and Legal Affairs. https://www.msaustralia.org.au/wp-content/uploads/ms-australia-unpaid-carers-inquiry-august-2023-1.pdf

Ruting, B., & Blane, N. (2025) Economic security in retirement How life events affect older Australian women. [Prepared for the Super Members Council by Impact Economics and Policy.] https://smcaustralia.com/app/uploads/2025/09/Final-SUMMARY-report-Older-womens-economic-security-in-retirement.pdf

Services Australia. (2025). Carer Payment. https://www.servicesaustralia.gov.au/carer-payment

Thistleton, R. (2024, March). Are we closing the stubborn superannuation gap? The McKell Institute. https://mckellinstitute.org.au/are-we-closing-the-stubborn-superannuation-gap/

Women with Disabilities Australia. (2025, March 26). WWDA responds to the 2025-26 Federal Budget. https://wwda.org.au/2025/03/26/wwda-responds-to-the-2025-26-federal-budget/

Women’s Electoral Lobby Australia. (2020, February). WEL Submission to Retirement Income Review. https://treasury.gov.au/sites/default/files/2020-02/womenselectorallobby040220.pdf