New Rule: Parental Leave Payments as Concessional Contributions
As of 1 July 2026, eligible individuals will receive super contributions paid by government on their parental leave payment, treated as concessional contributions to their super fund.(ato.gov.au) These contributions will carry the legislated super guarantee rate (currently 12%) and be taxed in the super fund at 15%, consistent with other employer SG contributions.(ato.gov.au)
Who Is Eligible
- Individuals receiving government-funded parental leave payments under approved schemes.
- You must have a nominated super fund, or if not, one will be determined via a legislated hierarchy.(ato.gov.au)
- The contribution itself will count toward your concessional contributions cap in the financial year in which it is received.(ato.gov.au)
Practical Impacts and Planning Tips
- For parents or carers planning parental leave in 2026-27: incorporate this into forecasts for your concessional contribution cap—other employer salary sacrifice or employer contributions may need adjusting.
- If you don’t yet have a chosen super fund, ensure you nominate one, or understand how the ATO’s hierarchy works in determining a fund for you.
- Because these contributions are taxed at 15% in-fund, the net benefit is similar to employer contributions, though total tax payable depends on your overall contributions.
Example
Emma takes 6 weeks of government-funded parental leave with payment of $8,000. The ATO adds a 12% SG-type super contribution to her fund: $8,000 × 12% = $960. This amount is taxed at 15% in-fund, so approximately $144 tax.
Emma’s concessional contributions cap for that year includes that $960. If other employer contributions or salary sacrifice also push her over the cap, she may need to manage other contributions to avoid excess cap penalties.
Things to Check Now
- Confirm whether your parental leave payment scheme qualifies for this measure.
- Verify if your employer or the government has your nominated super fund details.
- Keep records of your parental leave payment, the super contribution made, and how it’s reported — for your tax return and super fund statements.
- Where applicable, coordinate with HR or services Australia to ensure correct super and personal information flows.
Bottom line: This change ensures that super is not lost for parental leave recipients — a significant win for equity. But because it interacts with existing caps and tax treatments, it’s wise to plan ahead.