Starting 1 July 2025, new parents will receive superannuation payments on top of their paid parental leave (PPL).
The Change
Eligible parents with babies born or adopted from 1 July 2025 will receive an extra 12% of their government-funded PPL as a superannuation contribution to their nominated superannuation fund.
The lump sum superannuation payment will be paid annually by the ATO after the end of each financial year. The contribution will also include an additional interest component to account for the delay.
Eligible parents can continue to apply for PPL through Services Australia, which is responsible for assessing eligibility for both the payment and the superannuation contribution.
Who is Eligible?
Currently, parents can receive up to 22 weeks of government-funded PPL at the minimum wage. This will increase to:
- 24 weeks from 1 July 2025, and
- 26 weeks by 1 July 2026.
To be eligible, parents must meet the following requirements:
- Have a newborn or recently adopted child
- Meet an income test
- Not be working during their PPL period (except for allowable reasons)
- Meet the work test
- Meet the residency rules
- Register or apply to register their child’s birth with their state or territory birth registry (for newborns).
For further information about the government-funded PPL scheme, visit the Services Australia website.
What About Employer-Funded PPL?
PPL falls into two categories: government-funded PPL or employer-funded PPL. If eligible, employees may receive both types.
Although it is not compulsory for employers to provide PPL, many choose to support their employees with this benefit. Typically, employers set a minimum service period that employees need to meet before being eligible for employer-funded PPL. The amount received (usually measured in weeks) varies between employers.
Employers have their own policies regarding parental leave, and the benefits available depend on the employee’s agreement or contract. While some employers already pay superannuation on top of their PPL, the new laws ensure that parents using government-funded PPL will also receive this benefit.
Impact on Families
As superannuation is not currently paid on government-funded PPL, this change will allow parents to receive super contributions during their parental leave period.
This reform aims to close the gap in superannuation savings, especially for women, by ensuring parents receive superannuation while on parental leave, ultimately improving financial security in retirement.
