Good news for new parents! From 1 July 2025, if you’ve applied for and are eligible to receive government-funded Parental Leave Pay (PLP), you’ll also receive superannuation contributions on your payment. This important change aims to reduce the impact that taking time off to care for your children has on your super balance.
How will it work?
If your child is born or adopted on or after 1 July 2025, you’ll automatically receive the Paid Parental Leave Superannuation Contribution (PPLSC) when you qualify for PLP. You won’t need to make a separate claim for your super payment: the ATO will calculate your entitlement based on information from Services Australia about your PPL payments. The ATO will deposit the full amount directly into your nominated super fund after the end of each financial year, so if you receive a PLP during the 2025–2026 financial year, the ATO will start paying super contributions in the 2026–2027 financial year.
The PPLSC consists of two parts:
- core component: 12% of your total PPL payments (matching the superannuation guarantee rate from 1 July 2025); and
- interest component: an additional amount to make up for potential investment returns you might have missed while waiting for your annual payment.
If you share PLP with another person (eg a partner or co-parent), you will both be eligible for a super contribution on your portion of the PLP.
It’s important to remember that the super contributions will be taxed at 15% in the hands of your super fund, and will count towards your concessional contributions cap. The ATO will let you know if you exceed your concessional contributions.
Other changes to the paid parental leave scheme from 1 July 2025
The paid parental leave scheme is expanding gradually, allowing eligible parents more leave. If your child is born or adopted after 1 July 2025, the amount of PLP will increase to 120 days (24 weeks), and if your child is born or adopted after 1 July 2026 it will increase to 130 days (26 weeks). If you submit a pre-birth claim for a child before 1 July 2025, your PLP days balance will be 110 days, but once you give Services Australia proof of birth or adoption confirming your child was born or adopted from 1 July 2025, an additional 10 days will be added to bring you up to 120 days.
Additionally, from 1 July 2025, you and the child’s other parent can take up to 20 days PLP at the same time (currently limited to 10 days).
Looking ahead to 2026, the scheme will reserve four weeks of PLP for each parent on a “use it or lose it” basis. This change encourages both parents to share caring responsibilities and helps both maintain their connection to work.
What should you do now?
If you’re planning for a child any time after 1 July 2025:
- Check your eligibility for PLP on the Services Australia website – you can make a claim up to three months before the expected birth date or adoption of your child.
- Review your super fund details to ensure they’re up to date.
- Consider your parental leave plans, taking into account these new super benefits – and if you have a partner or co-parent, discuss how you’re going to share the leave.
- Speak with your employer about how the government-funded PPL will work alongside any employer-provided parental leave.
- Consider getting in touch with a financial adviser to discuss how to maximise your super while you’re on leave from the workforce.
