Super on Paid Parental Leave will help thousands of parents reach a fairer retirement: Rest

Rest, one of Australia’s largest profit-to-member superannuation funds, says today’s passage of legislation to provide super on the Parental Leave Pay scheme will help many thousands of Australian women each year achieve a fairer retirement.

With the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 now passed by Federal Parliament, from 1 July 2025, eligible parents will receive super contributions as part of their Commonwealth Parental Leave Pay payments.

Rest Chief Executive Officer Vicki Doyle says the new laws will help close the gender super gap and contribute to improved and fairer retirement outcomes for Rest members and Australians.

“Paid Parental Leave was the only common form of paid leave without compulsory super contributions, and this is one of the reasons so many female Rest members retire with less super than our male members,” said Ms Doyle.

“Now this law has passed, our members on the Parental Leave Pay scheme can start benefitting from the compounding returns on their entitlements from next July.

“We represent 2 million members, of whom more than 1 million are women. On their behalf, we congratulate the Government and the Federal Parliament for passing this hugely important legislation.

“Rest supports the payment of super on every dollar earned, including on all forms of parental leave. Now that we have certainty that super will be paid on Commonwealth Parental Leave Pay, we encourage further discussion on the payment of super on employer-funded parental leave. We recognise many employers already choose to pay this important benefit.”

Ms Doyle said the policy design of the proposed ‘Payday Super’ reforms, announced by the Government this week, also represented welcome progress towards a fairer super system.

“We believe our members should receive all super payments at the same time they receive their take home pay,” said Ms Doyle.

“A significant proportion of our members, particularly those in part-time and casual jobs, are paid their super monthly or less frequently, which is often out of sync with their take home pay.

“Some of the employers Rest works with already pay super as part of their regular payroll cycle, but these reforms would level the playing field for all our members. Payday super will financially benefit many of our members through the compounding interest returns on more frequent super contributions.

“It will also make it easier for members to track the contributions received into their superannuation account and check that payments have come through as expected. This is especially important for casual workers, whose hours can vary significantly from week to week.

“We commend the Government for providing this new detail and urge continued progress on these critical reforms. We also urge employers to begin preparing for the changes.”

The inclusion of super contributions on Parental Leave Pay was the priority recommendation in Rest’s Pre-Budget Submission earlier this year. Rest is also recommending the Government update the Low Income Super Tax Offset (LISTO) and extend the Superannuation Guarantee to all under-18 workers, regardless of the number of hours worked, among other recommendations.