From July 1, 2025, the Albanese Government will begin paying superannuation on Commonwealth Paid Parental Leave, investing $1.1 billion over four years to improve retirement outcomes for parents. Under the reform, eligible parents will receive a 12 per cent superannuation contribution on their Paid Parental Leave payments, delivered as an annual lump sum payment including an interest component.

The reform recognises that taking time out of the workforce to care for children significantly impacts retirement savings, with women currently retiring with 25 per cent less superannuation than men. When the scheme reaches its full 26 weeks in 2026, families could receive more than $3,000 in superannuation contributions for each birth or adoption, benefiting around 180,000 families annually.

This historic change comes alongside the expansion of Paid Parental Leave to 26 weeks by 2026, with built-in flexibility to encourage greater sharing of care responsibilities between parents. Together, these reforms acknowledge the value of caring work while ensuring parents don't sacrifice their future financial security to care for their children.

[1] https://www.abc.net.au/news/2024-05-14/federal-budget-pledges-superannuation-into-paid-parental-leave/103846312

[2] https://ministers.pmc.gov.au/gallagher/2024/super-boost-new-parents#:~:text=The%20Albanese%20Labor%20Government%20has,2024%20in%20the%20Senate%20today.

[3] https://www.dss.gov.au/paid-parental-leave/super-paid-parental-leave-and-expansion-scheme#:~:text=Eligible%20parents%20with%20babies%20born,to%20their%20nominated%20superannuation%20fund.