Legislation has been passed to boost Paid Parental Leave (PPL) by an additional 2 weeks. This is the first tranche of changes with further amendments expected to be introduced before July next year.
Note – PPL is government funded.
What are the changes?
The Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill, extends PPL from 18 weeks to 20 weeks. The amendment alters the initial proposal in the March 2022-23 budget, by adding a ‘use it or lose it’ requirement where neither parent in a couple can take more than 18 weeks of PLP. To claim the full 20 weeks each parent must take at least 2 weeks of PLP.
While parents in a couple relationship cannot claim more than 18 weeks of PPL each, single parents will be able to claim the full 20 weeks.
The changes remove the requirement that the primary claimants of parental leave pay must be the birth parent, instead allowing the entitlement to be flexibly shared.
Previously, PPL was made up of two components, an initial 12 week PPL period that must be taken as a continuous block, and a 6 week flexible PPL. Now PPL will consist of only flexible PPL days, allowing claimants to take the payment in multiple blocks (as small as a day at a time). The leave must be taken within two years of birth or adoption, and the changes remove the requirement to remain off work to be eligible.
Under the current scheme, an individual cannot receive PPL if their adjusted taxable income was over $156,647 in the 2021–22 financial year, which was based on the individual’s own income. However, now if an individual fails the individual income test, they will be reassessed against a $350,000 family income limit. Even a single parent who fails the individual income test will be reassessed against the new family income limit.
When do the changes come into effect?
The changes will come into effect for parents whose children are born or adopted from 1 July 2023.
The Government plans to implement additional legislation before July next year, to increase PPL to 26 weeks by 2026.
Please note that these amendments do not change any rules around when an employee can take parental leave under the Fair Work Act (see here for information regarding unpaid parental leave).
Need assistance?
As an employer, it can be difficult to manage employees’ entitlements, including paid parental leave. ER Strategies specialises in assisting businesses manage their obligations in upholding employee entitlements, including paid parental leave. If that assistance sounds interesting to you, get in touch with us on 1300 55 66 37, or click the button below.
