Upcoming changes to paid parental leave

What you need to know

The Federal Government has recently announced major changes to the Paid Parental Leave Scheme (PPL).

The current scheme

  • enables parents to take time off work to care for a newborn or newly adopted child by providing income while they are away from work
  • this income is at the rate of the national minimum wage currently at $812.60 per week
  • incorporates two government-funded payments:
    • Parental Leave Pay (PLP): usually paid to mothers but may in some circumstances be paid to other eligible primary carers, providing eligible working parents with up to 18 weeks of payments
    • Dad and Partner Pay (DAPP): provides eligible working fathers or partners with up to two weeks of payments
  • both the PLP and DAPP are subject to an income threshold where those earning greater than $151,350 are ineligible for this scheme.

Changes to the current scheme

As a result of, among other issues, criticism for reinforcing outdated gender roles, changes and enhancements to the current scheme, as outlined below, shall take effect from 1 July 2023.

  • the PLP and DAPP payments will be combined and extended into a single 20-week payment at the national minimum wage which enables both parents to claim an equal amount of parental leave entitlements
  • under the new arrangements, the threshold limit will increase to $156,647 for each parent and there shall be a new $350,000 family income limit
  • fathers and partners will be allowed to receive payments under the scheme at the same time as they receive employer-funded leave, previously not possible
  • one parent could take the full entitlement or it could be shared between a couple, with the option for both parents to take parental leave at the same time
  • the 20-week limit will be expanded by two weeks starting from 1 July 2024 with parental leave pay increasing by two weeks each year until 1 July 2026 for a total of 26 weeks (or half a year)
  • parents will be able to take parental leave pay in blocks (such as one day at a time) with periods of work in between
  • PLP must be taken within two years of the child’s date of the birth
  • a “use it or lose it” approach is taken with this type of leave

What you need to do moving forward

Your organisation will need to understand the impact of the planned increases to the combined PLP and DAPP entitlement. Appropriate steps should be taken to ensure that your employee handbook and internal structures, systems and procedures reflect the changes and applicable timeframes.

Information sessions should be provided on a regular basis to:

  • the HR team to ensure proper compliance with these requirements
  • managers who are involved in approving leave

Background information

To find out more about these changes:

Do you need advice?

Wurth HR provides advice to businesses to implement processes to manage HR changes such as this one. If you require assistance or have a question on this latest development, please contact David Wurth, Director at Wurth HR.

Email   :  david@wurthhr.com.au
Phone  : 1300 900 741