Coalition propose allowing parents to choose lump sum or extra time off instead of superannuation on paid parental leave

New parents would be able to choose to take extra weeks off work or a $2,900 lump sum payment instead of getting superannuation on their government paid parental leave, under a Coalition proposal to change Labor’s plan.

EXCLUSIVE

New parents would be able to choose to take extra weeks off work or a $2,900 lump sum payment instead of getting superannuation on their government paid parental leave, under a Coalition proposal to change Labor’s plan.

The opposition will move the amendments to Labor’s bill to add super to government paid parental leave on Tuesday arguing the cost of living crisis had fuelled the need to give parents flexibility over how they want to receive the additional money.

Under the Coalition’s plan, Australian parents eligible for government funded paid parental leave will be able to choose to receive a superannuation contribution, an additional two weeks of leave, or a one-off payment equal to the total value of the super.

From 2025 when the leave scheme will reach 24 weeks, the contribution is estimated to be around $2,900, and will increase to about $3,140 in 2026 when the scheme reaches 26 weeks.

Individuals would be entitled to the same level of financial support regardless of the option chosen.

Labor plans to add superannuation to paid parental leave but the Liberals want to make the extra funding more flexible.

Labor is opposed to the amendments, arguing its plan to add super to parental leave was designed to help Australians, particularly women, in their retirement.

Social Services Minister Amanda Rishworth said the Coalition were “crab walking away” from supporting the super plan.

Social Services Minister Amanda Rishworth says women are the biggest beneficiaries of the paid parental leave super proposal. Picture: Tracey Nearmy/Getty Images

“We know that the Coalition has spent decades trying to destroy the superannuation system and this is just another stunt where they demonstrate their opposition to it,” she said.

“Paying superannuation on paid parental leave is a really significant reform to ensure … (parents) not only get the support at the time of their newborn baby, but also don’t miss out on their retirement savings in the form of superannuation.”

Ms Rishworth said women are the “predominant beneficiaries” of the proposal.

But Liberal deputy leader Sussan Ley said parents who wished to direct their entitlements to super they will be able to do so, while those who needed immediate support with the costs of caring for their newborn they have that choice too.

Deputy Liberal leader Sussan Ley says new parents should get a choice in how they receive the additional support. Picture: NCA NewsWire / Martin Ollman

“Superannuation is not the government’s money, it is not the superannuation industry’s money, it is your money,” she said.

“The Coalition believes Australians should have the choice to use their superannuation entitlements to help them live their lives.”

Ms Ley said paid parental leave was an entitlement “both men and women should be taking up to spend time with their newborns”.

“Families are facing additional financial burdens due to this government’s cost-of-living crisis and the Coalition will better support them to spend time with their newborns,” she said.

ACTU President Michele O'Neil has criticised the Coalition’s attempt to change the super proposal. Picture: NCA NewsWire / Martin Ollman

Australian Council of Trade Unions president Michele O’Neil said adding super to paid parental leave was an “important step in ensuring women are free from poverty in their retirement”.

“This is yet another example of the Coalition’s failure to care about women’s economic security,” she said.

“This would cost women many thousands of dollars when they will need it most.

“No Australian should have to trade off supporting their babies now and feeding themselves in old age.”

Super Members Council chief Misha Schubert said while she welcomed Coalition support for super on paid parental leave, the “optional” proposal undermined the intent to close the “gender super pay gap”.

“It also sends a message to women that they are expected to sacrifice their own future financial security to meet the daily expenses of their family,:" she said.

Labor’s bill to add super to paid parental leave is expected to cost $1.1 billion over the forward estimates, and follows increased flexibility for sharing leave between parents and extending the scheme to 26 weeks by 2026.

Adding super to leave was a key recommendation from the government’s Women’s Economic Equality Taskforce, which argued it would boost the retirement incomes of women who often have less super due to taking time out of the workforce to have children.