Millions of Australians set to benefit from major superannuation change - here’s what you need to know

Thousands of Australian mums and dads could have their superannuation topped up by the Federal Government, even while on paid parental leave, as early as mid-next year.

The Albanese Government introduced its amendment to paid parental leave legislation on Thursday, to allow for up to 26 weeks of parental leave for new parents.

If passed, the laws will allow parents to get 12 per cent superannuation while on paid parental leave.

The scheme, which would come into effect from July 2025, is expected to help 180,000 Aussie families who use government-funded leave to care for their newborn children.

While the payments will boost retirement security for mothers and fathers, Social Services Minister Amanda Rishworth said it would be particularly beneficial to women — who generally retire with 25 per cent less super than men.

“Women make up the majority of primary caregivers in this country, leading to what has been referred to as the motherhood penalty, where they face greater economic insecurity because of time out of the workforce to care for children,” Ms Rishworth said on Thursday.

“Paying super on paid parental leave is a positive investment in the future of working women and in our broader economy.”

She said despite the positive sign that employers paying parental leave had increased from 48 per cent to 60 per cent over the “last decade or so”, there was more work to be done to bridge that gap.

The new laws would ensure parents using government-funded parental leave have the same benefits.

“It is not the silver bullet,” Ms Rishworth said. “But it is about closing that pay gap, and supporting shared care.”

“‘We know paid parental leave is vital to the health and wellbeing of families, parents and children. Not only is it good for family, but it’s also good for our economy.”

Improving paid parental leave is a critical reform.

Since the start of July 2024, parents have been able to access 22 weeks of paid parental leave. The government’s amendment aims to increase this to 26 weeks by 2026.

The changes could see families retire with $30,000 more in retirement savings per child, according to Georgie Dent, chief executive of national advocacy group The Parenthood.

Ms Dent said the boost would address one of the “many financial hurdles to having a family”.

“The inclusion of superannuation payments would reinforce that paid parental leave is not a welfare payment, but a workplace entitlement just like annual leave or sick leave,” she said.