Paying superannuation on Paid Parental Leave

The Albanese Labor Government is continuing to deliver on its commitment to provide greater support to Australian families by introducing legislation today which will pay superannuation on Government-funded Paid Parental Leave.

The introduction of the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 in the House of Representatives builds upon recent reforms which have made Paid Parental Leave more flexible, accessible, gender equitable, and which increase the length of the scheme.

Subject to the passage of legislation, eligible parents with babies born or adopted on or after 1 July 2025 will receive an additional payment, based on the Superannuation Guarantee (12 per cent of their Paid Parental Leave payment), as a contribution to their nominated superannuation fund.

Paying superannuation on Paid Parental Leave will improve the economic security in retirement of around 180,000 Australian families each year.

The Paid Parental Leave scheme provides financial support to eligible working parents to take time off work after a birth or adoption.

This legislation builds on recent reforms, including the expansion of the Paid Parental Leave scheme to 26 weeks by 2026. Since 1 July 2024, parents can receive 22 weeks of Paid Parental Leave, up from 20 weeks, resulting in more support as parents take time out of work to care for their newborn.

Pending the passage of legislation, a lump sum superannuation payment would be paid following the end of each financial year, including an interest component, where a recipient received Paid Parental Leave. The contribution will be automatically deposited into the superannuation accounts of eligible parents.

More information on the Paid Parental Leave scheme can be found on the Department of Social Services website.(link is external)

Quotes attributable to Prime Minister, Anthony Albanese

"This is a modern policy for modern families which delivers choice, offers security and rewards aspiration.

"My Government is boosting Paid Parental Leave by extending it to a full six months. This strengthens that further, by adding superannuation on it as well.

"It's another important step towards gender equality - which is good for families, good for business and good for our economy."

Quotes attributable to Treasurer, Jim Chalmers

"Paying super on Paid Parental Leave is part of our efforts to ensure women earn more, keep more of what they earn, and retire with more.

"This reform is good for families and for the economy, and we are really proud to be legislating it."

Quotes attributable to Minister for Women, Katy Gallagher

"We know that women continue to face difficult decisions and financial penalties when choosing to raise a family. These long-overdue changes will help ease those penalties and lessen the impact on women's retirement savings.

"Paying super on Paid Parental Leave will complement the other work our Government is doing, including expanding the Paid Parental Leave scheme to six months and making childcare cheaper and more accessible."

Quotes attributable to Minister for Social Services, Amanda Rishworth

"The introduction of superannuation with Paid Parental Leave signals that caring for babies is valued and helps to normalise parental leave as a workplace entitlement.

"Investing $1.1 billion over the forward estimates to pay superannuation on Paid Parental Leave is a key step in prioritising gender equality as most recipients are women who will have lower superannuation balances. The measure will directly reduce the impact of parental leave on retirement incomes.

"By investing in these reforms, we are ensuring families can get the most of Paid Parental Leave and exercise more choice and flexibility, especially now that we are adding superannuation for a more secure retirement."

Public link

Please use the above public link if you want to share this noodl on another website.