Superannuation on Parental Leave Pay
More good news for families! In our previous article, we highlighted the expansion of Paid Parental Leave (PPL), which will increase to 26 weeks by 2026. Starting from 1 July 2025, the government will also begin paying superannuation on government-funded Parental Leave Pay (PLP). As part of the Working for Women strategy, this new measure will help address the gender gap in retirement savings by ensuring that eligible parents continue to build their super while on parental leave.
How it works
From 1 July 2025, parents with babies born or adopted on or after that date will receive a superannuation contribution equal to 12% of their PPL. The Australian Taxation Office (ATO) will administer these payments as a lump sum after the end of each financial year, starting in July 2026.
Why it matters
Currently, PPL doesn’t include super contributions, leading to lower retirement savings for many women. This new law helps address that by allowing parents to continue growing their super while on leave, helping close the gender gap in retirement savings.
What you need to know
- Eligible parents will continue applying for PPL through Services Australia
- The ATO will manage super contributions, paid to the parent’s nominated super fund
- Employers are not impacted as these contributions are government-funded
For more details on the expansion of Paid Parental Leave (PPL), check out our previous article: Expanding Paid Parental Leave.
If you have any questions about how the government-funded Parental Leave Pay might affect you, our team are available to assist, please contact Simmons Livingstone at 1800 618 800 or via email at admin@simmonslivingstone.com.au.