Paid Parental Leave: what has changed?

26 April 2023

The Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023 which was passed by both Houses of Parliament on 6 March 2023 introduces changes to the government’s Parental Leave Pay (‘PLP’) scheme effective from 1 July 2023. The changes aim to better support gender equality in the home and workplace by providing greater flexibility and eligibility to the scheme.

The Current Paid Parental Leave Scheme

Under the current PLP scheme, eligible individuals who are the primary carer for a child who is born or adopted get up to 18 weeks’ pay at the National Minimum Wage (‘NMW’).

The first 12 weeks of PLP instalments must be received in one continuous period within 12 months of the birth or adoption of a child. The remaining 30 payable days can be taken flexibly within 24 months of the birth or adoption of a child. This coincides with an employee’s rights under the Fair Work Act 2009 (Cth) (‘FW Act’) to return to work after parental leave and the ability to take a maximum of 30 days’ parental leave flexibly within 24 months of the child’s birth or adoption date.

Eligible fathers and other partners can get up to two weeks’ payment (one-off) at the NMW under the Dad and Partner Pay (DAPP) scheme.

Individuals must claim PLP or DAPP through Centrelink and eligibility for the schemes is assessed by Services Australia (formerly the Department of Human Services) in which relevant work, income and other eligibility tests under the Paid Parental Leave Act 2010 (Cth) (‘PPL Act’) must be met.

New changes to the Scheme from 1 July 2023

From 1 July 2023, PLP and DAPP will be combined into one scheme which will provide eligible parent couples or single parents up to 20 weeks of PLP at the NMW. DAPP will no longer exist as a separate scheme. Eligible parents must not be working during this time or must be on leave (paid or unpaid).

Additionally,

the whole 20 weeks of PLP instalments can be received flexibly in multiple blocks within 24 months of the child’s birth or adoption date (removing the requirement of the 12 weeks of PLP instalments being received in one continuous period and the 30 days’ cap previously mentioned);
parents will be able to access PLP even when on paid leave (e.g. employer-funded parental leave, annual leave or long service leave), and in between periods of paid work;
birth mothers or first adoptive parents will have to give approval to share any PLP days, and if shared with a partner, parents will be able to access PLP at the same time;
for PLP that is shared between a couple, at least two weeks will be reserved for each partner to use with any unused amount of PLP days lost if not used within 24 months of the child’s birth or adoption date;
if a person does not meet the individual income limit of $156,647 (i.e. earns more than this amount), there will be a combined family income limit of $350,000 which will be applied instead (this limit will be used whether a person is single or partnered); and
there will be special circumstance exceptions to the work test for individuals whose ability to work during the ‘work test period’ are impacted by family and domestic violence, a serious medical condition (for either you or an immediate family member you care for), or a natural disaster declared by the Commonwealth or a state or territory.

These changes apply to parents with a child born or adopted on or after 1 July 2023.

There are further proposed changes to PLP including increasing the total PLP to 26 weeks by 2026, however, this is subject to legislation passing.

Changes to the Fair Work Act

At this stage, there are no changes to the rules for when an employee can take parental leave under the FW Act which means the 30-day cap on an employee’s ability to take their 12-month unpaid parental leave flexibly (up to 24 months from the birth or adoption date of a child) still applies.

In summary, PLP and DAPP will be combined into one scheme which will provide eligible parent couples or single parents up to 20 weeks of PLP at the NMW. There are also other changes that aim to better support gender equality in the home and workplace by providing greater flexibility and eligibility to the updated scheme, however, there are no changes to the rules for when an employee can take parental leave under the FW Act.

Source: My Business