For the first time in Australia's history, parents receiving Government-funded Paid Parental Leave will also receive superannuation contributions on those payments. The first round of payments will be made by the ATO from July 2026, covering leave taken during the 2025–26 financial year. This is a genuinely significant reform, particularly for women, who have historically missed out on retirement savings during career breaks.

The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Act 2024 introduced a new government-funded superannuation contribution on Paid Parental Leave (PPL) payments. The contribution, known as the Paid Parental Leave Superannuation Contribution (PPLSC), is equal to 12% of the Parental Leave Pay received, matching the current Superannuation Guarantee rate.

The change applies to parents of children born or adopted from 1 July 2025. The ATO will calculate each parent's entitlement and pay it as a lump sum directly into their superannuation fund after the end of the relevant financial year. The first payments will be made from July 2026.

What has changed?

The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Act 2024 introduced a new government-funded superannuation contribution on Paid Parental Leave (PPL) payments. The contribution, known as the Paid Parental Leave Superannuation Contribution (PPLSC), is equal to 12% of the Parental Leave Pay received — matching the current Superannuation Guarantee rate.

The change applies to parents of children born or adopted from 1 July 2025. The ATO will calculate each parent's entitlement and pay it as a lump sum directly into their superannuation fund after the end of the relevant financial year. The first payments will be made from July 2026.

How much super will eligible parents receive?

The current Parental Leave Pay rate is $948.10 per week before tax — based on the National Minimum Wage for 2025–26. For a parent taking 24 weeks of Paid Parental Leave (the maximum available for children born between 1 July 2025 and 30 June 2026), the total PPL payment is approximately $22,754. At a 12% contribution rate, the PPLSC would be approximately $2,730 — paid as a lump sum plus an interest component after the financial year ends.

From 1 July 2026, the PPL entitlement also increases to 26 weeks (130 days) for children born or adopted from that date, which will increase the super contribution amount proportionally.

What does this mean for women's retirement savings?

The gender superannuation gap has been a persistent feature of Australia's retirement system. Women retire with significantly less super than men on average, largely because career breaks taken for caring responsibilities result in years of missed contributions. This reform begins to address that gap. For a 30-year-old parent, the compounding impact of receiving even $2,730 in super contributions at that age, invested in a growth option over 35 years, could add approximately $7,000 to their retirement balance.

While this alone will not close the gender super gap, it represents an important acknowledgement that parental leave should not come at the permanent cost of retirement savings.

What do employers need to do?

Importantly, employers are not required to calculate or pay the PPLSC. The ATO handles the calculation and payment directly from government funds to the employee's super fund. 

However, there are a few things employers should be aware of:

• Employers can still voluntarily pay superannuation on top of the government contribution if their enterprise agreement, employment contract, or policy provides for it. The government contribution does not replace employer obligations under existing agreements.
• Employees' super fund details need to be current and accurate. The ATO will pay into the fund on record, so it is worth confirming these details with any employee about to take parental leave.
• Record-keeping requirements for Parental Leave Pay remain unchanged. Employers must continue to issue payslips that clearly identify PPL payments.

What do employees need to do?

Very little. The system is largely automated. However, eligible parents should:

• Ensure their personal details are consistent between Services Australia (Centrelink) and the ATO — including name and address — as discrepancies can delay or redirect payments.
• Confirm that their super fund holds current and accurate member details.
• Be aware that the PPLSC will count toward their concessional contributions cap ($30,000 for 2025-26). For most parents the amounts involved will be modest, but anyone already making significant salary sacrifice contributions should monitor their total.

Note for SMSF members

If you receive Paid Parental Leave and you hold your superannuation in a self-managed super fund, ensure your SMSF's bank account details are up to date with both Services Australia and the ATO. SMSF trustees should also check that the fund is in a position to receive contributions and that compliance obligations remain current.

Please contact us if you have any questions - email us or phone our team on 02 9899 3044.