The Paid Parental Leave (PPL) system will be expanded from 18 weeks to 26 weeks over the next four years to address the gender pay gap, boost women’s workforce participation, and offer families greater flexibility during their children’s early years.
Under the current Paid Parental Leave Scheme, there are two types of payments:
- Parental Leave Pay: For primary caregivers, eligible employees receive up to 18 weeks of Parental Leave Payment at the National Minimum Wage ($812.45 per week as of July 1, 2022).
- Dad and Partner Pay: Eligible working dads or partners (including adopting parents and same-sex couples) can receive up to two weeks of government-funded pay based on the National Minimum Wage ($812.45 per week as of July 1, 2022).
From July 1, 2023, Parental Leave Pay and Dad and Partner Pay will merge into a single 20-week payment. Additional changes include:
- Gender-neutral claiming to allow either parent to apply.
- Simultaneous weeks of Parental Leave Pay for parents
- A family income limit of $350,000 adjusted taxable income, in addition to the current individual income limit of $156,647
- Parental Leave Pay can be taken in blocks as small as one day, with work periods in between, within two years of a child’s birth or adoption.
- Any unused Parental Leave Pay will be lost if not used before the child turns two.
- Single parents can access the full 20 weeks at the time of their claim.
More proposed changes to Parental Leave Pay are subject to legislative approval. Starting from July 1, 2024, Parental Leave Pay will increase by two weeks annually until it reaches 26 weeks on July 1, 2026.
Preparing for Changes in Paid Parental Leave: Employer Obligations
Although there are no changes to the regulatory burden when administering payments to staff, employers must review and update their payroll and HR systems to accommodate new rules and entitlements. Employers must inform employees of upcoming changes, including updated policies, procedures, and entitlements.
Registering for Paid Parental Leave
Employers must register their business with Services Australia to participate in the Paid Parental Leave scheme. An essential step is to register for a PRODA account at servicesaustralia.gov.au/proda and then register for the Business Hub. Employers do not determine employee eligibility for Parental Leave Pay; Services Australia will assess eligibility based on the information provided by the employee.
How is Paid Parental Leave Paid?
Services Australia will evaluate an employee’s eligibility for Parental Leave Payment (PLP) upon application and notify the employer if they are responsible for providing the payment. Suppose the employer is responsible for the payment. In that case, Services Australia will provide funds to the employer, who must pay the employee according to their regular pay cycle. In some cases, Services Australia may pay the employee directly, which will not impact the employer’s payroll or accounting.
The Paid Parental Leave Employer Toolkit can help employers prepare for their role in the Paid Parental Leave scheme.
