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Australia to pay super on paid parental leave in a move to enhance economic security and gender equality

Australia to pay super on paid parental leave in a move to enhance economic security and gender equality

Paying super on Government paid parental leave will also help normalise such leaves as a workplace benefit, similar to annual and sick leave, and mitigate its impact on retirement funds, it was shared in a joint ministerial release.

The Australian Government has announced plans to keep improving paid parental leave (PPL) by starting to pay superannuation (super) on the Government payment from 1 July 2025.

This will coincide with the launch of Australia's first national strategy aimed at achieving gender equality, Working for Women. 

Paying superannuation on PPL was also a key recommendation of the Women’s Economic Equality Taskforce and has long been campaigned for by unions and the women’s movement.

This reform is an investment in women’s economic security and in the broader economy, building on the Government’s work to modernise PPL and expand the payment to a full six months by 2026, it was shared in a joint ministerial release on 7 March 2024 (Thursday).

Paying super on Government PPL will also help normalise parental leave as a workplace benefit, similar to annual and sick leave, and mitigate its impact on retirement funds, it was added.

If approved, starting 1 July 2024, families will have access to an additional two weeks of leave (totalling 22 weeks), which will increase to 24 weeks from July 2025 and 26 weeks from July 2026.

This builds upon previous changes made last July to widen access to the payment and simplify parental leave sharing between parents.

This includes a more generous $350,000 family income test, and made it much easier for both parents to share care.

The proposal is currently under consideration in the Senate, and, according to the Australian Taxation Office, is not yet law. More specifics about paying retirement savings on PPL, including costs, will be outlined in the next Budget.

Senator Katy Gallagher, Minister for Women, noted: "“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."

Thus, she said, paying super on Government parental leave is an important investment to help close the super gap and make decisions about balancing care and work easier for women.

Minister for Social Services, Amanda Rishworth added that it is another key step to prioritise gender equality, better value care work, and improve women's workorce 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."


READ MORE: LSEG to offer 26 weeks of fully paid parental leave globally | Human Resources Online 

Lead image / 123RF

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