In a victory for families across Australia, parents accessing government-funded paid parental leave will start receiving superannuation contributions on their payments from July 2025, after the Labor Federal government's legislation successfully passed through parliament.
Under the new law, from July 1, 2025, parents on paid parental leave will receive an additional 12% as a contribution to their superannuation fund, ensuring that time spent caring for children doesn’t result in a financial penalty later in life. This change is a crucial step in addressing the superannuation gap that disproportionately impacts women.
The Labor government also passed legislation earlier this year that extends paid parental leave from 22 weeks to 26 weeks by 2026. Currently, it’s estimated that about 180,000 families benefit from the paid parental leave scheme each year.
The Union movement has been a vocal advocate for the inclusion of superannuation in paid parental leave for years, recognising it as a vital measure in closing the superannuation gap between men and women. On average, women retire with about 25% less superannuation than men, and this gap is partly driven by women taking more time away from work to care for children.
By paying super on paid parental leave, the Labor Federal government is not only helping to reduce the gender super gap but also sending a clear message that caregiving should not come at the cost of women’s long term economic security.
While this legislation marks a major step forward, there’s still more work to be done to achieve true gender equality. Unions will continue to push for further reforms to close the superannuation gender gap, and fight for equality in the workplace. Join the fight by becoming a Union member now.
