The Labor government’s legislation providing a 12 percent superannuation payment for new parents has successfully passed the Senate without incorporating the amendments proposed by the Opposition.
As per the new Bill, from July 2025, eligible parents with babies born or adopted on or after July 1, 2025, will receive an additional payment, based on the Superannuation Guarantee (12 percent of their Paid Parental Leave payment), which will be contributed to their nominated superannuation fund.
“Once the scheme reaches 26 weeks, the maximum superannuation contribution a family will receive per birth or adoption will exceed $3,000. This amount will then accumulate with interest over the working lifetime of an individual’s superannuation account,” a government statement said.
The payment will be made as a lump sum, including an interest component, at the end of each financial year during which Paid Parental Leave is received. The contribution will be automatically deposited into the superannuation accounts of eligible parents.
Starting in 2026, Australian parents will benefit from a full six months of government-funded Paid Parental Leave, often supplemented by employer-funded schemes.
Minister for Social Services, Amanda Rishworth, stated that the inclusion of superannuation with Paid Parental Leave will enhance the retirement economic security for approximately 180,000 Australian families annually.
“We know women retire with 25 percent less superannuation than men—an estimated $51,700 less on average. By investing in these reforms, we are ensuring families can maximise their Paid Parental Leave benefits, enjoy greater choice and flexibility, and secure a more stable retirement,” Rishworth said.
“This reform underscores the value of caring for babies and helps to establish parental leave as a standard workplace entitlement.”
Minister for Women Katy Gallagher added that the reform will bolster fairness and financial security for Australian women.
“We understand that women who take time off work to have children face a reduction in their super balances, retiring with 25 percent less super than men,” Gallagher commented.
On Sept. 18, during a lengthy debate, Liberal Senator Anne Ruston, Manager of Opposition Business in the Senate, proposed amendments to provide families with greater flexibility in using their superannuation, suggesting two options.
The first option suggested an extra two weeks of government-funded leave, raising the total from 26 to 28 weeks when the scheme is fully in place. The second option allowed families to receive the superannuation payment as a one-off lump sum.
“This flexibility acknowledges the financial pressures of having a child,” Ruston said.
Labor Senator Tim Ayres, Assistant Minister for Trade, strongly opposed the amendments, calling them an “assault on the superannuation system from the opposition,” and asserting that they undermined the intended impact of the proposed changes.
The Bill, first introduced in August, aimed to add superannuation on top of paid parental leave to address the differences in retirement savings between genders.
