Paid Parental Leave Will Now Include Superannuation

The change will begin next year.
Paid parental leave will now include superGetty

The government-funded paid parental leave (PPL) scheme will now include superannuation payments.

Considering that women retire with a quarter less in superannuation than men, its a change that has been long overdue.

Under the current program, couples with a newborn or newly adopted child can access up to 20 weeks of paid parental leave at the national minimum wage.

The new scheme, which will be introduced from July 2025, is a small step to better the financial position of women and other primary carers—who’s caring responsibilities see them left behind financially.

Finance Minister Katy Gallagher explained the impact in a statement.

“The data is clear, when women take time out of the workforce to raise children it impacts their retirement incomes with women retiring, on average, with about 25 per cent less super than men,” she said.

“Paying super on government parental leave is an important investment to help close the super gap and to make decisions about balancing care and work easier for women.”

While the change provides women with significantly better financial outcomes, it also sends an important message to society about the value of parental leave.

Super will be included in parental payments.

Under the Albanese Government’s plan, super will be paid at 12 per cent of the PPL rate.

The rate is currently based on the national minimum wage of $882.75 per week. While parents can currently access 20 weeks of paid parental leave, the figure will rise until it reaches 26 weeks in July 2026. The new additional weeks are not designed to be used by just one parent, and are offered to the second parent under a use-it-or-lose-it scheme.

This is to encourage dads and non-primary parents to take more parental leave.

Based on an estimate of around $180,000 families accessing the scheme, the new super payments will cost around $200 million annually.

While Senator Gallagher didn’t reveal the estimated cost, she did acknowledge the large cost.

“I’m not pretending it [isn’t] a significant investment that we’re making today, but we think it’s worth it,” she said.

“We’ve found room to pay for it. And we think it sends a strong message about the value that we place on women.”

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