Paid Parental Leave has been a hot area for reform in recent years. With the recent passing of the Paid Parental Leave Amendment (More Support for Working Families) Act 2024, it is an opportune time to ensure you are up to date in respect of prior amendments, aware of the new reforms, and prepared for future change. 

Prior Amendments 

In 2011, Paid Parental Leave was introduced as Australia’s first publicly funded scheme to financially support parents to take time off work to raise children.  

While the general scheme is quite familiar to many, 2023 saw amendments to the scheme enacted which: 

• created a single, parental leave payment scheme by abolishing separate payments for “dads and partners”; 
• increased available paid leave to 20 weeks with each parent required to use at least two weeks on a ‘use it or lose it’ basis; 
• made all paid parental leave weeks flexible and available within two years of the child’s birth or adoption; 
• abolished more ‘gendered’ categories of primary, secondary and tertiary claimants to encourage fathers to participate in raising children while still prioritising economic support for the birth mother; and 
• introduced an additional, more comprehensive $350,000 total family income limit in cases where the birth mother’s earnings exceed the individual income threshold test (which is currently an adjusted taxable income of $168,865 or less as of the 2022-23 financial year). 

These changes are now in force.  

Recent Reforms and Upcoming Change 

The most recent 2024 amendments provided two extra weeks of federally funded parental leave, increasing the entitlement to 22 weeks effective as of 1 July 2024. This is set to increase again to 24 weeks from July 2025 and then 26 weeks from 2026. 

Alongside the increase in total paid leave, ‘use it or lose it’ reserved leave will also increase by 1 week in July 2025 and again in July 2026, so that each claimant parent will need to use at least 4 weeks to take full advantage of the scheme. Notably, single parents are currently entitled to the total period of leave including the future increases over the next few years. 

Moreover, the amount of leave permitted to be taken concurrently will be increased from 2 weeks up to 4 on 1 July 2025 with the Government noting its options to possible further changes here. 

What Paid Parental Leave Means for Employers Now: 

Paid Parental Leave is relevant to all employers. Whilst funding for paid parental leave is managed by Services Australia and funded by the taxpayer, employers are required to process this pay to eligible employees through their respective payroll systems. 

In addition, it is important to note that employers have other obligations to support parents, including through: 

• providing their employees up to 12 months (or longer if agreed) unpaid parental leave;
• protecting the employee’s right to return to work in their pre-parental leave position (or providing an available equivalent position where the pre-parental leave position no longer exists);
• ensuring that before a person is engaged to replace the employee while on parental leave, the person is informed that: 

• • their engagement to perform the role is temporary; 
  • the employee has a right to return to the role on the conclusion of their parental leave; and 
  • the employee may return to work earlier than currently planned, and the consequence of that on the replacement person’s employment; 

• consulting with the employee while on parental leave in respect of any decision which could have an impact on their pre-parental leave role; 
• facilitating opportunities for parents to keep in touch and stay connected with the workplace during leave; 
• accommodating a reasonable flexibility when they transition back to work; and 
• understanding that discriminating based on sex, pregnancy, family or carer responsibilities and against those exercising their right to parental leave is unlawful. 

Keeping up to date with and navigating the changing Paid Parental Leave landscape can be understandably difficult for many employers, especially those operating small businesses. PCS is happy to provide guidance and advice on how best to support your employees through the joys of parenthood while managing the inevitable challenges for the business to ensure it remains an effective and high performing workplace.