The Federal Government has introduced legislation to add superannuation to Paid Parental Leave (PPL).
Under the bill, eligible parents will be paid 12% super on top of their total PPL.
The Government announced the initiative in March. If the legislation passes, super will be paid on PPL from July 2025.
Here’s what you need to know.
Paid Parental Leave
Paid Parental Leave is a national scheme for parents after a birth or adoption.
PPL is capped at 22 weeks of federally-funded minimum wage support.
Parents need to have worked consistent hours and complete an income test to prove their eligibility for the payment.
The entitlement will increase to 26 weeks by 2026. This planned increase is separate from the proposed PPL superannuation legislation.
Superannuation
Superannuation is money set aside for retirement from your pay. In most instances, you can’t access it until you turn 60.
Every employer in Australia is legally required to make super contributions on behalf of their staff.
Parents currently receiving PPL are paid just over $915.80 a week. This payment does not include any super contributions.
The legislation
The Government introduced its PPL Amendment Bill in the Lower House on Thursday.
According to the 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% of their Paid Parental Leave payment.
It means an additional $110 a week would be paid into PPL recipients’ nominated superannuation fund (if the amendment is passed).
The super gap
According to analysis of ATO data by the Super Members Council (SMC), the ‘gender super gap’ significantly widens after women reach their 30s.
Figures from 2021-2022 showed a $300 gap between 18 to 24-year-old men and women.
The gap widened to almost $16,000 between men and women in their mid to late 30s, “when many women take time out of the paid workforce to raise children,” the SMC said.
Industry response
The SMC called for bi-partisan support to pass the bill.
SMC CEO Misha Schubert called it “the next big milestone on the road to retirement gender equity”.
The Australian Council of Trade Unions (ACTU) said it welcomes the proposed laws.
ACTU President, Michele O’Neil said the legislation is a step towards “improving women’s economic security.”
“Women make up the majority of primary caregivers in this country… they face greater economic insecurity because of time out of the workforce to care for children,” O’Neil said.
Earlier this year, the Coalition said it would work with the Government on the proposal, and that it backs the idea of paid super for PPL in “principle”.
TDA reached out to the Opposition for an updated comment on the legislation but did not receive a response at the time of posting.
