Your guide to superannuation payments on parental leave in 2026
Taking parental leave can mean taking a break from growing your super. Learn how superannuation is paid on Government-funded Paid Parental Leave, who is eligible and what these contributions could mean for your retirement savings over the long term.
2 min read
Summary
Taking parental leave can have a lasting impact on retirement savings, particularly for parents who spend time away from paid work. To help address this, eligible parents who receive Government-funded Paid Parental Leave can also receive a superannuation contribution from the Australian Taxation Office (ATO). The measure aims to support retirement outcomes for parents and help reduce the long-term impact that caring responsibilities can have on super balances.
What this means for new parents
Under the new legislation, any eligible parents with babies born or adopted on or after 1 July 2025 will see an additional contribution to their superannuation fund. This contribution is equivalent to the superannuation guarantee, which is 12% on-top of the Parental Leave Payment.
Previously, parents accessing Government-funded Parental Leave Pay would not receive super on these payments. While some employers with paid parental leave schemes pay super on top, these new laws ensure that parents using Government-funded leave receive the same benefit.
Addressing the gender pay gap
While this legislative change applies to both men and women, it is a significant victory in the effort to close the gender super gap. Women frequently serve as primary caregivers, which often results in them facing the "motherhood penalty" – disparities in super savings due to career breaks taken for caregiving compared to their partner.
When they take parental leave, their super payments stop, causing a significant hole in their savings for retirement. According to a 2023 report by AMP’s Deputy Chief Economist Diana Mousina on the financial literacy gap, Women in Australia retire on smaller superannuation balances than men, with their average superannuation balance at age 60-64 being 21% less than men at the same age – a balance of $406,000 for men compared with $321,000 for women1. By ensuring super is paid on parental leave, this policy helps to mitigate the long-term financial impact of these breaks, promoting greater financial security for them in retirement.
How the superannuation payments will be made
Unlike the standard superannuation guarantee contributions, which are made at least quarterly, these super payments will be made as a lump sum, including an interest component. The payment will be administered by the Australian Taxation Office (ATO) into your super funds and will occur after the end of each financial year in which parental leave was taken. If you received Parental Leave Pay during the 2025–26 financial year, the ATO will begin paying the first superannuation contributions from July 2026.
How much will parents benefit from this payment?
From 1 July 2026, Australian Paid Parental Leave increases to 130 days (26 weeks). Paid Parental Leave is paid at the National Minimum Wage, which from 1 July 2026 is $1,004.90 per five-day week. Based on 26 weeks of Parental Leave Pay and a 12% superannuation contribution, eligible parents could receive more than $3,100 in additional super, plus interest, based on current payment rates2. For younger parents, the long-term impact could be significantly higher as these contributions continue to grow through investment earnings until retirement.
How else can I top up my super during parental leave?
In addition to the Government's new super contributions on Parental Leave Pay, there are several proactive steps you can take to bolster your super during your time away from work.
You might consider making voluntary after-tax contributions to your super fund, which can be done regularly or as a one-off payment. These contributions can potentially benefit from the government's co-contribution scheme, where eligible individuals on a low income receive extra contributions from the government, enhancing their super balance.
Another approach is for your spouse to make contributions into your super while you are on leave. By contributing to your super, not only can they help your retirement savings grow, but your spouse may also benefit from the spouse contributions tax offset.
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1 Addressing Australians’ financial literacy and the gender literacy gap; July 2023; AMP
2 Based on 26 weeks of Paid Parental Leave (130 days) at the National Minimum Wage of $1,004.90 per week from 1 July 2026 and a 12% superannuation contribution under the Paid Parental Leave Superannuation Contribution (PPLSC) scheme. Estimated contribution is $3,135.29, excluding any interest component applied by the ATO.