On 6 March 2023, the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 (Cth) was passed by both Houses of Parliament which will make changes to paid parental leave entitlements from 1 July 2023.

It is important to note that these changes only relate to paid parental leave entitlements that some employees receive from the Government. There is still no right for employees to receive any form of paid parental leave from their employer, although many employers choose to offer this as a discretionary benefit.


How does paid parental leave currently operate?

The Paid Parental Leave Act 2010 (Cth) currently provides for a total of 18 weeks’ government-funded paid parental leave for eligible employees (who must earn less than $156,647 per annum). Parental leave pay is paid at the national minimum wage rate.

Currently the payments may be received either:

  • in one continuous 18-week block; or
  • in one continuous 12-week block with the remaining 30 payable days to be taken flexibly (which coincides with employees’ rights to return to work after
  • parental leave and to take up to 30 days’ parental leave flexibly up to their child’s second birthday, or two years from the date the child was adopted).

Eligible fathers and partners are also entitled to a one-off payment that relates to a period of up to two weeks leave.


What is changing?

Several changes are being made to the paid parental leave scheme to provide for greater flexibility and eligibility to the scheme, which had been criticised for not catering for the various ways in which parents take leave to care for newly born / adopted children (i.e. it is not just birth-mothers who will have caring responsibilities). 

The main changes are as follows:

  • The existing maximum 18 weeks’ parental leave pay will be combined with the two weeks’ father and partner pay to provide a single 20-week scheme, to be shared between each parent.
  • Parents will be able to receive a maximum of 18 weeks’ parental leave pay each, and a maximum of 20 weeks’ parental leave pay between them.
  • For example one parent could receive 18 weeks pay, and one parent 2 weeks pay, or both parents could receive 10 weeks pay each, etc.
  • Employees who are single at the time they claim will be able to receive the full 20 weeks’ parental leave pay. 
  • The fixed 12-week parental leave pay period (and the requirement to not return to work in order to be eligible) will be abolished, meaning that claimants can receive parental leave pay in multiple blocks, of at least a day at a time, up to two years from the the birth or adoption of their child.
  • The means test for eligibility will be amended by introducing a $350,000 per annum family income test under which claimants can qualify for parental leave pay if they do not meet the individual income test. 
  • Eligible fathers and partners will be able to access parental leave pay regardless of whether the birth-parent meets the income test or residency requirements.


What steps do employers need to take?

Many employers refer to the Government-funded paid parental leave scheme in workplace policies referring to parental leave, these will need to be updated.

If you require any assistance in doing so, or developing a company-funded paid parental leave policy, please contact us.