The cut-off for the parenting payment will be raised from when the child turns eight to when they turn 14.
Parents will be able to receive $922.10 a fortnight until their youngest turns 14.
Changes in the budget will also allow for parents to no longer have to transfer to JobSeeker when their youngest turns eight.
The changes will come into effect from September 20, with eligible single parents on JobSeeker set to get a $176.90 increase in pay per fortnight.
The raise in the age cut-off will cost $1.9 billion to the federal budget through to the 2026/27 financial year.
Prime Minister Anthony Albanese said the changes to single parent payments would bring more stability.
"What that will do is to make sure that women, in particular, but also fathers in situations of raising children by themselves, can have that sense of security, that children as well can be looked after," he told reporters in Perth.
"We want to look after single parents because we know that the role that they play in raising their children is such a priority for them and they're deserving of more support."
15°C