What’s Changing?
From 1 July 2025, the Australian Government will begin making superannuation contributions on government-funded Paid Parental Leave (PPL). This long-anticipated move is designed to improve retirement outcomes, especially for women who often experience super gaps due to time taken off work for caregiving.
The contributions, known as Paid Parental Leave Superannuation Contributions (PPLSC), will:
- Be equivalent to 12% of the Paid Parental Leave payments
- Be paid as a lump sum after the end of the financial year in which the PPL was received
- Go directly into your superannuation fund, including SMSFs
The first round of contributions will be made in the 2026–27 financial year.
Who’s Eligible?
To receive the PPLSC:
- You must have received Paid Parental Leave for a child born or adopted on or after 1 July 2025
- You’ll apply for Paid Parental Leave through Services Australia as usual, who will then notify the ATO of payments made
If the leave is shared between parents, each will receive a super contribution based on the share of PPL they received.
What You Need to Do
To ensure you receive your contribution without delays:
- Update your details
Make sure your name and address are up to date with Services Australia, the ATO, and your super fund. - Confirm your super fund info
Check that your fund has your correct member details to avoid contribution issues. - Keep an eye out for ATO communications
The ATO will be in touch to confirm your PPLSC payment, so make sure your contact details are current.
Why It Matters
This policy is more than a change in payment, it’s a step toward equity. It recognises the financial impact of parenting and seeks to reduce the long-term superannuation imbalance between men and women.
It’s an especially big win for women, who statistically retire with far less in super than men. With this change, parents taking time out for caregiving won’t fall as far behind in building long-term wealth.
Information For Employers
Payment of government funded Parental Leave Pay has not changed. However, the ATO will pay PPLSC directly to your employee’s superannuation fund after the relevant financial year has ended. Contributions will start in the 2026–27 financial year.
Employers are still able to make other super contributions. For more information about providing Parental Leave Pay see Services Australia Providing Parental Leave Pay.
Support from Cotchy
Not sure what this means for your super fund or financial plan? That’s where we come in. At Cotchy, we make staying compliant and informed easy. If you’ve got questions about superannuation on government-funded Paid Parental Leave or need help ensuring your super details are correct, our team is here to help.
Let’s make sure your future is just as financially strong as your present. Reach out to our team if you have any queries about superannuation on government-funded Paid Parental Leave.
Source: ATO