Changes to Australia’s Paid Parental Leave (PPL)

Landmark changes to paid parental leave policies are in the works. Here’s what that means for HR.

Written by Harshini Elliott, Essential HR

In yesterday’s budget meeting, the Albanese Government announced plans to extend paid parental leave from 20 weeks to 26 weeks by the year 2026. Extra leave will be staggered, with an extra fortnight of paid leave added each year from July 2024 until 2026. Therefore, an additional six weeks will be added to Australia’s PPL scheme, giving parents a total f 6 months of total leave payable.

The new policy won’t restrict which parent can use the leave or the duration they can take within the 26 weeks. As part of the new scheme, single parents will also be able to access the full 26 weeks.

The leave can also be taken flexibly (i.e. one day at a time with periods of work in between) to allow for a slow transition back to work for parents or to give secondary parents the opportunity to work reduced hours during those crucial first months of a child’s life. This is the biggest boost to Australia’s paid parental leave scheme since it was first introduced by the Labor government in 2011.

Prime Minister Anthony Albanese said the policy change would support 'modern' families and provide them with greater choice. "We know that investing in parental leave benefits our economy," he said. "It is good for productivity and participation, it's good for families and it's good for our country as a whole."

Before this announcement, Australian parents could only access 20 weeks of Commonwealth-funded parental leave. Eighteen of them were allocated to the ‘primary carer’ and the remaining two were allocated to the ‘secondary carer’.

The current system has many implications, especially when it comes to entrenching traditional gender roles, says Dr Leonora Risse, Senior Lecturer in Economics at RMIT University who specialises in gender equality.

“In offering a more generous amount of leave allocation for fathers or partners, it will make caregiving less one-sided, meaning we’re fostering more gender equity at home.

“This matters because we know that if more fathers are involved in parental leave, that is a boost for women’s full-time labour force participation. That’s going to help support women’s economic security over the longer term.”

The proposed new scheme will now go to the Women’s Economic Equality Taskforce, chaired by Sam Mostyn AO, for further assessment. The taskforce will examine how a ‘use it or lose it’ structure would work and the amount of leave both parents can access at the same time.

You can read the official fact sheet here: Budget October 2022-23 - Expanding Paid Parental Leave

If you would like support in updating your parental leave policy to align with the new Government changes, please reach out to the team at Essential HR.

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