Finder makes money from featured partners, but editorial opinions are our own.

Paid parental leave up to 6 months – but there’s a catch


Super won't be added to paid parental leave: What does it mean for you?

The Albanese government made an announcement last year that would seemingly benefit new parents in Australia: revealing plans to extend the paid parental leave (PPL) scheme by an additional 6 weeks, offering parents payments for a full 6 months.

Currently, the PPL scheme provides 18 weeks of paid parental leave and 2 weeks of secondary carer leave, with both paid at the national minimum wage rate. However, this expansion comes with a significant caveat: the government has declined to commit to including superannuation in the PPL.

No commitment to include superannuation

The government declined to commit to adding superannuation to paid parental leave, even after its own gender pay equity taskforce recommended this measure in a new 10-year plan.

The final report from the Women's Economic Equality Taskforce (WEET), released on Monday 23 October outlined various systemic changes aimed at reducing the gender pay gap, with the inclusion of superannuation in paid parental leave being a notable recommendation.

However, during her appearance before senate estimates, finance minister Katy Gallagher refrained from making a concrete commitment on the government's adoption of this recommendation.

Responding to inquiries from Greens senator Larissa Waters, senator Gallagher said:

"The treasurer and I are on the record a number of times saying this is something that we want to see happen when we can find the room."

"I've put the report before cabinet so they have that and then how we implement recommendations will be subjected to another process"

She emphasised that the government might not swiftly implement every recommendation, as it's part of a 10-year plan designed to gradually incorporate these suggestions. senator Gallagher also indicated that the timeline for this integration would be contingent on the government's "budget processes."

Calls for the inclusion of superannuation contributions in the PPL scheme have been growing, with stakeholders urging the government to consider this measure.

Despite increasing pressure from various quarters, no official commitment has been made by the government as of the current date.

What does this mean exactly?

The government's decision not to include superannuation in paid parental leave has significant implications for individuals, especially women, who primarily utilise this form of financial support during maternity or paternity leave.

Paid parental leave offered by the government is a crucial source of income for many new parents. However, it does not currently incorporate superannuation contributions.

The Women's Economic Equality Taskforce recognised that this omission disproportionately affects women, as 99% of those who take parental leave under this scheme are women. The absence of superannuation payments during this period can result in long-term financial repercussions, particularly for those taking extended leave.

This is because the absence of contributions for several years means that their superannuation balance misses out on the benefits of compound investment returns, while still incurring fees.

Superannuation shortfall and the consequences of missing payments

Over the past decade, a staggering 1.45 million women in Australia have collectively missed out on an estimated $1.6 billion in superannuation contributions. This significant financial shortfall is a direct consequence of the Commonwealth Parental Leave Pay scheme's lack of superannuation provisions.

Additionally, in a country where superannuation is designed to fund our post-work life, there's growing concern that for many, that financial security might remain elusive.

Recent Finder research highlights the extent of these concerns, with almost 1 in 4 Australians (23%) expressing doubts about having enough money in their superannuation to sustain them in retirement. This statistic translates to a staggering 4.6 million Australians potentially facing a financial crisis as they age.

This adds an extra layer of complexity to the issue, as millions of women have missed out on substantial superannuation contributions over the past decade.

Take charge of your super contributions

While this policy gap persists, you can take proactive steps to safeguard your superannuation and secure their financial future during and after parental leave.

Need help deciding on a fund? Finder's best super fund picks might be a good place to start.

Ask a Question

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms Of Service and Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site