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$4,250 superannuation payment to boost Aussies' retirement nest egg

Superannuation will be paid on parental leave payments from July 1, 2025.

Thousands of Aussie families will soon be paid superannuation on their parental leave payments. The budget measure, which is set to kick in from July 1 next year, is set to boost retirement balances by thousands.

Treasurer Jim Chalmers confirmed the government would provide $1.1 billion over four years to pay super on government-funded parental leave. The scheme will then cost a further $600 million each year after that.

“This will make the super system fairer, reduce the gender gap and benefit 180,000 families a year,” Chalmers said.

Find out how the 2024 Federal Budget will impact you by following Yahoo Finance’s coverage here.

Superannuation
Thousands of families will be paid super on their parental leave payments, costing taxpayers $1.1 billion over the next four years. (Source: Getty)

The superannuation payments will add an extra $4,250 into the retirement nest egg of a mother earning the median wage, the Treasury estimates.

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That’s a 1.15 per cent boost and is based on a 12 per cent super payment on 22 weeks of parental leave payments.

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The superannuation gap currently sees women retire with around 25 per cent less super in their nest egg than men.

Families can currently receive 20 weeks of paid parental leave, which is paid at the national minimum wage of $882.75 per week. Leave can be shared by both parents

From July 1, the amount of leave parents can access will increase to 22 weeks. It will continue to gradually increase each year until it reaches 26 weeks in July 2026.

The amount is shared between parents. Currently and for the 2024-25 financial year, two weeks of leave are set aside for the second parent who isn't using the majority of the leave on a "use it or lose it" basis. Single parents can get the full amount.

Under the plan, super would be paid at 12 per cent of the paid parental leave rate. That’s about $106 per week.

From July 2025, which the scheme is scheduled to kick in, the number of weeks parents can access will increase to 24 weeks.

You can get parental leave pay if you and your partner’s taxable income is less than $350,000.

If your combined income exceeds that, the majority of the leave can be provided to one parent if they earn less than $168,865 in the 2022-23 financial year.

You’ll also need to have worked for 10 of the 13 months before the birth or adoption of your child, and a minimum of 330 hours (around one day a week) in that period.

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