The Treasurer has announced that the Federal Government will pay superannuation on paid parental leave from 1 July 2025. The intention is that the superannuation will be administered by the ATO, meaning that employers will not have to process these payments on the government’s behalf. Further details of this measure, including cost, will be released in the Federal Budget due to be handed down in May 2024.

The Treasurer has said that this reform build on the government’s work to ‘modernise’ paid parental leave and expand the payment to cover a full 6 months by 2026. The expansion to Australia’s Paid Parental Leave Scheme will give families and additional six weeks of paid parental leave in total: an extra two weeks of level (for 22 weeks total) from 1 July 2024, increasing to 24 weeks from July 2025 and 26 weeks from July 2026.

Employers will continue to be involved in the administration of payments if an employee elects to take eight or more weeks of their entitlement consecutively. For an shorter periods, Services Australia will pay the individual directly.