Changes Announced to the Paid Parental Leave Scheme
On 15 October 22, the Albanese Government announced the “biggest boost to Australia’s Paid Parental Leave Scheme” since its introduction in 2011.
The Government’s proposed reforms are not law yet. If passed, they will add an additional six weeks of Paid Parental Leave, increasing the total amount of leave payable under the scheme to 26 weeks/6 months.
The Government announced that the under the reforms, Paid Parental Leave will:
- able to be taken in blocks between periods of paid work;
- be fully available to single parents so that the children do not miss out (meaning that single parents will be able to maximise the full 26 weeks); and
- maintain the current “use it or lost it” policy, so that more dads and partners are encouraged to take leave, (which means that in a two-parent family, both parents must take some leave to access the full amount accessible under the scheme.)
Overview of the current Paid Parental Leave Scheme
Currently, the Federal scheme provides working parents with paid parental leave at the national minimum wage (currently $812.60 per week) for a maximum period of 20 weeks, paid for by the Federal Government not the employer.
Employees can split their period of paid parental leave over two periods (a set period and a flexible period). The set period is a minimum period of 60 days that must be taken within a continuous block, and within 12 months of the adoption or birth of a child. It can be paid before, after, or at the same time as other entitlements, such as annual leave, and any employer-funded paid parental leave. The set period ends once the employee returns to work (except for ‘keeping in touch’ days).
The flexible period is a period of up to 30 days that can be used as individual days or in one or more blocks as negotiated between the employer and the employee. It must be used within 24 months of a child’s birth or adoption. It usually starts after the set period has ended and after the employee has returned to work.
When will the changes be incorporated
From July 2023, the Government will introduce the reforms, assuming that both Federal Houses of Parliament pass the legislation for the charges.
From 1 July 2024, the Government will start expanding the scheme with two additional weeks a year until the scheme reaches its full 26 weeks from 1 July 2026.
The Government’s new Women’s Economic Equality Taskforce will also be examining the optimal model for 26 weeks and what mix of flexible weeks and use it or lose it components for each parent deliver the best outcome for families and shared parenting.
There will be further details released in the Government’s budget.
Important Disclaimer: The content of this article is general in nature and for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.