Superannuation payments will now be added to the Federal Government’s paid parental leave, thanks to new legislation.
The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 was introduced into Parliament and passed both houses on 19th September 2024.
This means parents of children born after 1 July 2025 who receive government Paid Parental Leave will also get an additional 12% of their payment as a contribution to their super fund. The payments will be calculated and administered by the Australian Taxation Office.
When announcing this strategy in March 2024, Minister for Women, Senator Katy Gallagher pointed to this being a significant move towards supporting parents balancing caring and working responsibilities.
When parents (predominantly women) take time out of the workforce to raise children, it significantly impacts their retirement income. In fact, women retire, on average, with about 25 per cent less super than men. The new superannuation measure seems a step in the right direction so that parents are not disadvantaged for taking leave for parental care.
Taking time out of paid work to care for children is a normal part of working life for both parents in today’s society. Paying super on top of Government Paid Parental Leave will further help normalise parental leave as a workplace entitlement, like annual and sick leave.