Super on Paid Parental Leave

Paid Parental Leave and Superannuation

Under the current Paid Parental Leave Scheme, eligible working families can be paid for up to 20 weeks of flexible paid parental leave. This is set to increase to 22 weeks from 1 July this year and to 24 weeks from July 2025, following the recent passage of the Government’s Paid Parental Leave Amendment (More Support for Working Families) Bill 2023.

Superannuation has historically not been paid on top of Paid Parental Leave. However, the Government has committed to providing a 12% superannuation payment commencing 1 July 2025.

Why the change?

The gender superannuation gap is reported at between 22% and 32%. It is also reported that on average, women who have children experience a 55% decline in earnings over the first five years of having children and this time out from the workforces results in an average of 25% less super than men at retirement.

The proposed changes aim to better reflect the needs of modern Australian families and reduce gender inequality by supporting women to normalise and balance work and care responsibilities.

Are the Government’s Paid Parental Leave and employer paid parental leave the same thing?

The Government’s Paid Parental Leave is a social security scheme. It is not a workplace entitlement, and, whilst there is overlap for many employees (and employers), it operates separately from workplace entitlements to paid and unpaid parental leave under employment laws. There are different eligibility requirements, among other things, between the Government’s scheme and employment entitlements. Employer funded paid parental leave is not a legislative entitlement but rather a discretionary policy undertaking increasingly offered by many employers.

Please contact our Employment, Discrimination and Equality team for more information.