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SKY UPDATE | Enhancements to Australia’s Paid Parental Leave Scheme

On the 18th of March, the Senate passed the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023, marking a significant stride towards the 2022/23 Federal Budget commitment to provide greater support for new parents across the country.

The cornerstone of the Bill is the expansion of the Paid Parental Leave scheme to provide an entitlement to 26 weeks of parental leave pay.

The legislative amendments introduced by the Bill include several key provisions:

  • Incremental Extension: Starting from 1 July 2024, the scheme will be progressively extended by two weeks each year, culminating in a 26-week entitlement from 1 July 2026.
  • Reserved Period Extension: For claimants who are partnered at the time of their first effective claim, the reserved period will be extended by one week annually from 1 July 2025 reaching a maximum of four weeks from 1 July 2026.
  • Concurrent Days Increase: The Bill raises the limit on the number of days that can be taken concurrently by multiple claimants to four weeks by 1 July 2025.
  • Minor and Technical Amendments: The Bill also includes minor and technical amendments to the Paid Parental Leave Act 2010, addressing eligibility criteria for parental leave pay in exceptional circumstances, including instances of premature birth.

For further commentary on the changes and the policy intent that sit behind them, refer to the Services Australia website and the Joint Press Release from Prime Minister Anthony Albanese and Minister for Social Services Amanda Rushworth.

In addition to these legislative changes, a Joint Press Release from Treasurer Jim Chalmers, Minister for Finance Katy Gallagher and Minister for Social Services Amanda Rushworth was issued on the 7th of March announcing an intention to pay superannuation on parental leave payments from 1 July 2025.

By integrating superannuation payments into the Paid Parental Leave scheme, the government aims to normalize parental leave as a workplace entitlement, mitigate the impact of parental leave on retirement incomes, and promote greater economic security for women.

It is understood that further details on this measure will be included in the upcoming Federal Budget.

Would be parents will naturally be very interested in the changes to the Paid Parental Scheme.  However, it should be noted that employers play an important role in administering the scheme and should also take note of the changes and update their policies and procedures accordingly.

If you have questions about the changes to the Paid Parental Leave scheme and how they impact you and/or your business, please get in touch.

Sky Accountants Ballarat

Phone: 03 5332 8855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

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Sky Accountants Gisborne & Macedon Ranges

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Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437