Refinements to Paid Parental Leave Scheme from 1 July 2023

Earlier in March, the Albanese Government successfully secured passage through Parliament of the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill, which will make small refinements to the Paid Parental Leave (PPL) Scheme from 1 July 2023, ahead of more significant amendments scheduled for 1 July 2024.

Note: The Government introduced a further Bill seeking to expand the PPL scheme and gradually increase payments (to 26 weeks by July 2026) to Parliament on 19 October 2023 – catch up with our related article.

The changes from 1 July 2023 will extend parental leave pay for partnered parents from 18 weeks to 20 weeks, with two weeks reserved on a ‘use it or lose it’ basis for each claimant, rolling the existing ‘Dad and Partner Pay’ payment (of 2 weeks) into the universal PPL benefit. Parents who are single at the time of making a claim for PPL will be able to access the full 20 weeks, the result of combining the existing maximum of 18 weeks of PPL with the historical 2 weeks of ‘Dad and Partner Pay’. The Explanatory Memorandum of the legislation explains, “Dad and Partner Pay will be abolished”.

In addition, the changes will remove the notion of ‘primary’, ‘secondary’ and ‘tertiary’ claimants and the requirement that the primary claimants of parental leave pay must be the birth parent, allowing families to decide who will claim first and how they will share the entitlement. Eligibility to claim PPL for eligible fathers and partners will also be expanded whilst the government-funded benefit will “consist only of flexible PPL days, allowing claimants to take the payment in multiple blocks, as small as a day at a time, within two years of the birth or adoption, and remove the requirement to not return to work in order to be eligible”.

In passing the legislation, Labor and the Coalition defeated amendments by the Greens that sought an immediate increase to PPL payments to 26 weeks, with Greens Senator Barbara Pocock pointing out that the OECD’s average period of paid parental leave is now around 52 weeks, and close to full-replacement wages in many countries. Senator Pocock agreed that the refinements to the scheme were a “modest” step in the right direction but labelled Australia’s PPL scheme “inadequate”, saying the most recent amendments were “too little and too slow to effectively support Australian parents”.

More significant upgrades to the PPL scheme are scheduled from 1 July 2024 – pending the expected passage of more legislation (see our related article) – which will see the gradual increase to 26 weeks paid leave, phased in at two extra weeks of PPL per year, through to 2026.