The Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 passed on 6 March 2023.
Key changes to the Paid Parental Leave scheme include:
- Extending parental leave pay from 18 weeks to 20 weeks from 1 July 2023, with two weeks reserved on a ‘use it or lose it’ basis for each claimant. Parents who are single at the time of their claim will be able to access the full 20 weeks. This extension is a result of combining the current maximum of 18 weeks of parental leave pay with the current 2 weeks of dad and partner pay. Dad and partner pay will be abolished. Parents will be able to access the entitlement in multiple blocks with periods of work in between to grant them further flexibility on how they take the leave.
- Introducing a $350,000 family income limit, under which families can be assessed if they do not meet the individual income test.
- Removal of 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.
- Making paid parental leave consist only of flexible Paid Parental Leave 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.
- Expanding eligibility to allow an eligible father or partner to receive parental leave pay regardless of whether the birth parent meets the income test, residency requirements or is serving a newly arrived resident’s waiting period.
These changes form part of the government’s plan to expand the Federal Paid Parental Leave scheme to 26 weeks by 2026.
It is important to highlight that the Unpaid Parental Leave provisions contained in the Fair Work Act 2009 (Cth) remain principally unchanged at this time.
The approved Bill only amends the Federal Paid Parental Leave scheme under the Paid Parental Leave Act 2010 and the only change to the Fair Work Act is the removal of the note in subsection 79A(4) which refers to now repealed provisions of the Paid Parental Leave Act relating to not returning to work.
The Government has foreshadowed making amendments to the Fair Work Act to align the rules around taking unpaid parental leave with the more flexible approach adopted under the paid leave scheme – however it is unknown if and when these changes might be proposed.
If you have concerns about these changes in regards to your employees please get in touch with our team.