Minding The Gap: Paid Parental Leave & Superannuation

Another significant announcement arising from the 2024-25 Budget involves integrating superannuation with government-funded parental leave.

To bolster Australia’s government-funded Paid Parental Leave (PPL) scheme and enhance women’s retirement prospects, the Government over five years has allocated $1.1 billion starting from 2023–24, with an ongoing annual commitment of $0.6 billion each year.

Under this initiative, eligible parents will receive an additional payment equivalent to 12% of their PPL payments based on the Superannuation Guarantee. This contribution will be directed to their superannuation fund for births or adoptions occurring after 1 July 2025.

Moreover, small business employees will receive supplementary assistance in managing paid parental leave as part of this measure.

The primary objective of this measure is twofold: to normalise parental leave as a fundamental workplace entitlement akin to annual and sick leave and to mitigate the impact of parental leave on retirement incomes. This initiative represents a proactive step towards fostering gender equality in the workforce and promoting financial security for families.

IMPORTANT NOTICE

This blog post contains general information only and has been prepared by Allworths without reference to your objectives, financial situation or needs. Allworths cannot guarantee the accuracy, completeness or timeliness of the information contained here. By making this information available to you, we are not providing professional advice or recommendations. Before acting on any of the information contained here, you should seek professional advice.