Aims/hypothesis <p>The aim of this study was to quantify the impact of childhood-onset type 1 diabetes on parental incomes in a Nordic welfare state.</p> Methods <p>In this register-based quasi-experimental study, we included the parents of 13,358 children diagnosed with type 1 diabetes in Sweden from 1993 to 2014 together with 506,516 population-based matched control parents. A difference-in-differences approach was used to compare income trajectories between exposed parents and control parents. Work-related and pension-qualifying incomes (including parental benefits) were assessed during the first 7 years after diagnosis. The long-term incomes of parents of children diagnosed with type 1 diabetes in 1993–2004 were also investigated.</p> Results <p>A sharp decline in work-related income was observed in both mothers and fathers of children diagnosed with type 1 diabetes. In the year after diagnosis, the mean yearly income difference (expressed in €100) was –15.4 for mothers (95% CI –17.2, –13.6) and –6.0 for fathers (95% CI –8.9, –3.2), representing a relative decrease of 6.6% and 1.6%, respectively. The effects on income were similar across sociodemographic groups and calendar periods. The pension-qualifying income of mothers increased in the first year after diagnosis by 28.7 (95% CI 27.1, 30.3), attributable to the parental care allowance, but gradually decreased during long-term follow-up (–10.9, 95% CI –16.6, –5.1, after 17 years).</p> Conclusions/interpretation <p>This study highlights the enduring financial consequences for parents caring for a child with type 1 diabetes in Sweden. While parental benefits in Sweden mitigated the short-term loss of maternal income, the current welfare system does not adequately address long-term consequences.</p> Graphical Abstract <p></p>