Parents to have super paid on parental leave in move set to benefit 180,000 families a year

Parental leave payments will have superannuation added after the government moved to implement an election promise.

People receiving paid parental leave from the government are set to gain 12 per cent superannuation payments on top. Source: Getty / Charles Gullung

Key Points

• Government parental leave payments will have superannuation added from mid-2025.
• The extra 12 per cent will be paid to a superannuation fund.
• There'll be more information about the move in the May budget.

People who receive government-funded paid parental leave will be paid superannuation on top of the payment under a new government policy.

Around 180,000 families a year receive government-funded paid parental leave payments, which from 1 July 2025 will include an extra 12 per cent paid to a superannuation fund.

The government has not provided costing for the payments but said more information will be contained in the May budget.

How has parental leave changed recently?

The move follows changes made last year that combined two existing payments into a shared 20-week scheme, expanded access and made it easier for new fathers to obtain paid leave.

Progressive increases to the amount of leave will be added until it reaches 26 weeks in 2026.

The government proposed adding superannuation to parental leave payments ahead of the 2022 federal election but dropped the policy platform just days out from polling day.

Its own Women’s Economic Equality Taskforce recommended it introduce the superannuation payments to parental leave before the May 2023 budget, however the government cited budget constraints at the time.

In October, Greens senator Larissa Waters pushed for the payments, saying the party wants better outcomes for the women in Australia who were retiring with less superannuation than men.

Unions have been pushing for the change for years, but argue that paid parental leave should be paid as a full replacement wage.

What have people said about the policy?

Minister for Women Katy Gallagher said paying super on government parental leave is an important investment to help close the super gap between men and women.

"The data is clear — that 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," Gallagher said.

Minister for Social Services Amanda Rishworth said the payments are a key step to prioritise "gender equality, better value care work and improve women’s workforce participation".

"It helps normalise taking time off work for caring responsibilities and reinforces Paid Parental Leave is not a welfare payment – it is a workplace entitlement just like annual and sick leave".

Opposition frontbencher James Paterson said paid parental leave was originally envisaged as a welfare scheme, not wage replacement, and hasn't historically been paid superannuation.

He said this was a "new approach" from Labor which the coalition would scrutinise.

"We will look very carefully at the details and particularly the costings and make sure the government has done their homework here and that the full cost is being transparent and clear," Paterson told Sky News on Thursday.

How much is paid parental leave?

The weekly paid parental leave rate in Australia is $812.45, the minimum wage, with employers encouraged to provide a top-up.

Around six out of 10 employers offer paid maternity leave in addition to the government scheme, however the rate of pay and length can vary greatly.

Australia still lags behind much of the OECD, a grouping of 38 countries with market economies, where the average paid leave is 61 weeks — 53 weeks for mothers and eight for fathers — according to the OECD Family Database.

Who is eligible for paid parental leave?

The government payments are available for families earning under $350,000 a year or individuals earning under $169,000 a year.

If a family is earning more than $350,000 but one person within it is earning below $169,000 they will be eligible.

If a single person is earning over $169,000 they are still eligible if under the $350,000 family limit.

The leave has to be taken after the child is born or adopted and the 100 days of leave are shared if there are two parents.

Gallagher said while some employers already pay super on top of any paid parental leave, the changes would ensure all people using the leave would be able to access it.

It's estimated women end up have one-third less in their super balance than men by retirement age.

- With the Australian Associated Press.