Significant changes to the paid parental leave scheme
The Paid Parental Leave Amendment (Improvement for Families and Gender Equality) Act 2023 introduces significant changes to the Government’s paid parental leave scheme to financially support new parents in caring for infant children while being absent from work.
How the scheme previously worked
The Paid Parental Leave Scheme helps parents take time off work to care for a newborn or a newly adopted child by providing them with an income while away from work. The scheme previously included two payments – Parental Leave Pay and Dad and Partner Pay which are both government-funded and paid at the National Minimum Wage.
What are the changes to the new scheme?
The new scheme will be extended from 18 weeks to 20 weeks from 1 July 2023, with a minimum two-week period to be taken by both parents on a ‘use it or lose it’ basis.
Families will be able to decide who will claim first and how they will share the entitlement.
The requirement that the primary claimant of parental leave pay must be the birth parent will be removed. This means, for example, a mother could receive payments for the full 20 weeks entitlement period, or a couple could divide the 20 weeks of payments between them.
The previous income test will continue however there is a new family income limit of $350,000 per applicable financial year. This means a person who earns more than the individual income limit may be eligible based on the family’s income being less than $350,000 per year.
Single parents will be able to access the full 20 weeks.
The new paid parental leave scheme will allow claimants to take the payment in single days, or multiple blocks, within two years of birth or adoption.
What are the benefits?
The changes are aimed to increase gender equality, to boost workforce participations for women and recognise that fathers also value time for infant bonding and care.
When does the new scheme start?
The new scheme commenced on 1 July 2023. Parents giving birth or adopting after 1 July 2023 are eligible to participate in the scheme.