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The passage of federal legislation to pay superannuation on paid parental leave serves as a timely reminder that Australian businesses must support flexible work arrangements that reduce travel and childcare costs, says one professional.
Earlier this month, the Adding Superannuation for a More Secure Retirement Bill 2024 was passed by the Senate.
Minister for Finance and Minister for Women Senator Katy Gallagher said in a statement that eligible parents with babies born or adopted on or after 1 July 2025 will receive an additional payment, based on the Superannuation Guarantee (12 per cent of their Paid Parental Leave payment), as a contribution to their nominated superannuation fund.
Once the scheme reaches 26 weeks, the maximum amount a family would receive in superannuation contributions for each birth or adoption will be more than $3,000. This would then be subject to compounding interest over the working lifetime of an individual’s superannuation account.
“This is an important statement about the value that we place on parents taking time out of the paid workforce to care for the next generations— because you shouldn’t have to sacrifice your future financial security to care for your babies,” the senator said following the bill’s passage.
Speaking about the new laws, HiBob customer success manager Sabrina Scherm (pictured) reflected that women traditionally take more time off to care for children, often at the cost of their superannuation.
This is why, Scherm said, they retire with 25 per cent less super than men.
“Introducing 12 per cent super contributions during parental leave is a crucial step in closing that gap, promoting financial security for parents without sacrificing their future — a game-changer for Australian families,” she said.
It is important to acknowledge that “childcare is a business issue”, and modern companies need to support flexible work arrangements that reduce travel and childcare costs, Scherm added.
“By offering hybrid work models and clear performance benchmarks, businesses can create an environment where parents – particularly women who are disproportionately affected – can manage school drop-offs and pick-ups while thriving both personally and professionally,” she said.
Businesses should also prioritise implementing inclusive parental leave policies “that encourage shared caregiving responsibilities and processes that ensure parents feel confident taking leave and transitioning back to work”, she continued.
“This will help to level the playing field by ensuring no parent is unfairly disadvantaged and support greater female participation in the workforce,” Scherm said.
Looking ahead, Scherm concluded that although the government’s move is a “strong step forward”, businesses need to take the reins in closing the gender pay gap by voluntarily contributing superannuation payments in addition to the government.
“HiBob’s research shows only 36 per cent of women believe organisations are doing enough to close the gap, highlighting the need for pay audits, leadership accountability, and initiatives that rebuild trust,” she pointed out.
“By taking these steps, businesses can show real commitment to gender equality and create a more inclusive workplace.”
RELATED TERMS
Parental leave is a benefit offered to employees that allows for job-protected time off from work to care for a kid once the child is born or adopted.
