Changes to parental leave pay to benefit Australian families from July 2023

Beginning 1 July 2023, Australian families are set to benefit from a major revamp of the paid parental leave scheme. The existing 18 weeks' paid parental leave will merge with the Dad and Partner Pay entitlement of 2 weeks’ pay, making a combined total of 20 weeks of paid parental leave available to partnered couples. Single parents at the time of their claim will have access to the full 20 weeks.

These changes apply to employees who welcome a newborn or have a child placed in their care from 1 July 2023 onwards.

The amendments to the scheme are comprehensive and include the following:

• Partnered employees will be allowed to claim up to 20 weeks' pay between them, with each partner taking a minimum of 2 weeks (exceptions apply in certain circumstances).
• A new family income limit of $350,000 will be introduced, indexed annually from 1 July 2024, for claiming paid parental leave pay.
• Eligibility rules for fathers or partners to claim paid parental leave pay will be expanded.
• The payment structure will be made flexible, allowing eligible employees to claim it in multiple blocks until the child's second birthday.
• The requirement for employees to return to work to be eligible for the entitlement will be removed.

Services Australia, the government body managing the paid parental leave scheme, will provide additional information regarding these changes. Those seeking further clarity are advised to seek consultancy with your HR team or partner.

These changes underline Australia’s commitment to supporting working families and ensuring more equitable access to parental leave. As we approach 1 July 2023, both employers and employees are encouraged to familiarise themselves with these modifications to smoothly accommodate the new parental leave scheme in their payroll processes.