Having a baby or welcoming an adopted child is a major life event. But taking time away from work can also mean taking a break from your usual superannuation contributions.
A new government initiative is designed to help reduce that gap.
From 1 July 2026, the Australian Taxation Office (ATO) has started paying the Paid Parental Leave Superannuation Contribution (PPLSC) for eligible parents who received government-funded Parental Leave Pay for a child born or adopted from 1 July 2025.
What is the Paid Parental Leave Superannuation Contribution?
The PPLSC is a government-funded superannuation contribution paid on eligible Parental Leave Pay.
The aim is to help parents maintain their superannuation savings while taking time out of the workforce to care for a new child.
Previously, receiving Parental Leave Pay did not generally result in an employer superannuation contribution. Under the new arrangement, eligible parents can receive a super contribution based on the amount of government-funded Parental Leave Pay they received.
How much super will you receive?
The PPLSC is calculated using the 12% Superannuation Guarantee rate applied to your eligible Parental Leave Pay.
An additional interest component is also included to account for the time between receiving the Parental Leave Pay and the later payment of the super contribution.
For example, if you received $20,000 in eligible Parental Leave Pay, the super contribution would be approximately $2,400, before taking the additional interest component into account.
The actual amount will depend on your circumstances and the amount of Parental Leave Pay you received.
When will the money be paid?
The ATO calculates and pays the contribution after the end of the financial year in which you received your Parental Leave Pay.
Payments began from July 2026.
For example, if you received eligible Parental Leave Pay during the 2025–26 financial year, your PPLSC will generally be paid during the 2026–27 financial year.
You don’t need to make a separate application for the super contribution. Your Parental Leave Pay claim is used to determine your entitlement.
Where will the contribution be paid?
In most cases, the contribution will be paid into an eligible superannuation account identified by the ATO.
It’s a good idea to make sure your details are up to date with Services Australia, the ATO and your super fund.
Check that:
- Your name and personal details are correct.
- Your address is up to date.
- Your super fund details are current.
- Your records with Services Australia, the ATO and your super fund are consistent.
Keeping these details up to date can help avoid unnecessary delays or problems with your payment.
What happens if Parental Leave Pay is shared?
Parental Leave Pay can be shared between parents.
If it is shared, each person can receive a PPLSC based on the amount of Parental Leave Pay they received.
For example, if one parent receives 70% of the family’s Parental Leave Pay and the other receives 30%, their respective super contributions will be calculated based on their individual shares.
Don’t forget about your super contribution cap
There is an important tax consideration to keep in mind.
The PPLSC is treated as a concessional (before-tax) superannuation contribution and is generally taxed at 15% within the super fund. It also counts towards your concessional contributions cap for the financial year in which the contribution is made.
This is particularly important if you also make additional super contributions, such as:
- Salary sacrifice contributions
- Personal deductible contributions
- Other concessional contributions
Depending on your circumstances, the PPLSC could affect how much additional concessional contributions you can make without exceeding your cap.
A positive step for your long-term financial future
Taking time away from work to care for a child can have a long-term impact on retirement savings. The new PPLSC is designed to help reduce some of that impact by continuing to build superannuation while eligible parents receive government-funded Parental Leave Pay.
While the contribution may not seem significant in isolation, money added to super earlier in your working life can have many years to potentially benefit from investment returns and compounding.
If you’re receiving Parental Leave Pay, it’s worth checking that your personal and superannuation details are up to date and considering how the new contribution fits into your broader superannuation and financial strategy.
Need help understanding your superannuation position?
The team at Dymond Foulds & Vaughan can help you understand how changes to your income, superannuation contributions and family circumstances may affect your overall tax and financial position.