Federal government announces changes to Paid Parental Leave

Federal government announces changes to Paid Parental Leave

The Albanese federal government has announced a raft of potential changes to existing entitlements for paid parental leave, with the introduction of the Paid Parental Leave (Improvements for Families and Gender Equity) Bill 2022 (the Bill).

The Bill, which the Senate passed on 6 March 2023, seeks to amend the Paid Parental Leave Act 2010 (the Act).

The key elements contained within the Bill are:

  • Creating a single parental leave payment by combining the existing Parental Leave Pay (comprising 18 weeks) and Partner Pay (2 weeks), with two reserved on a ‘use it or lose it’ basis for either claimant;

  • Removing the existing claimant categories of ‘primary’, ‘secondary’ and ‘tertiary’ as well as the requirement that the Parental Leave Pay can only be claimed by the birth parent;

  • Allowing claimants flexibility within two years of birth or adoption;

  • Introducing a family income limit of $350,000 under which families can be assessed if they do not meet the individual income tests;

  • Expanding the eligibility criteria to allow an eligible father or partner to receive payments regardless of meeting the income test, residency requirements, or within the waiting period for newly arrived residents.

The changes arising from the Bill will come into effect for parents whose children are born or adopted from 1 July 2023.

When the Bill was introduced to Parliament, Amanda Rushworth, Minister for Social Services, stated that if the Bill was passed by Parliament by March 2023, parents are expecting a child or commencing adoption on or after 1 July 2023 can pre-claim payments as soon as they are assessed as eligible.

The government estimates that the new family income test of $350,000 per annum will result in almost 3000 additional parents receiving entitlements.

The government has indicated that they will introduce further legislation to Parliament prior to July 2024 with the intention of increasing the entitlements under the scheme to a maximum of 26 weeks by 2026.

Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 – Parliament of Australia (aph.gov.au)

For queries about parental leave, leave entitlements, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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