From 1 July 2025, the payment of superannuation to a parent receiving paid parental leave will be mandatory. This reform was introduced by the Australian Government to address the gender imbalances in retirement incomes, given thar women generally hold 25% less superannuation than men at retirement.
How it will work:
- Eligible working parents seeking parental leave will make a claim through Services Australia.
- The Government will make the parental leave payments including superannuation to the employer.
- The employer will then pay the leave and superannuation to their employee through payroll.
The Paid Parent Leave Scheme provides parental leave pay to support eligible working parents to take time off work after the birth or adoption of a child.
Currently, parents are not entitled to superannuation while on paid parent leave, which results in a loss of annual income and future retirement savings.
The number of available weeks of paid leave increase from 22 to 24 weeks from July 2025, which can be taken in multiple blocks up until the child turns 2.
If you have any questions about your entitlements or how these changes will affect your business contact us at [email protected] or call our office on 4861 2345.
Please note this blog is general in nature and for information purposes only and should not be relied on for legal advice. Should you require advice regarding the information in this email please contact us so we may provide advice specific to your needs and circumstances.
