Superannuation contributions to apply to Paid Parental Leave
Superannuation contributions to apply to Paid Parental Leave
As expected, the Government has announced that Paid Parental Leave (PPL) payments will be subject to superannuation guarantee contributions at the rate of 12%, under the proposed measure. Super contributions will apply to PPL for births and adoptions on or after 1 July 2025.
The Commonwealth Government funds a PPL scheme that is currently not subject to super contributions. This proposed measure will change that position.
Measures were announced in the October 2022-23 Budget regarding enhancements to the PPL scheme. The proposed measure to apply super contributions to the PPL scheme builds on these previously announced measures.
BDO comment
The announcement of this Budget measure was previously released by the Government on 7 March 2024. It was announced alongside the release of the Working for Women strategy, which focuses on achieving gender equality. BDO is pleased to see the announcement of this measure, which will reduce the impact on retirement incomes for women who take time out of paid work to care for children.