Paid Parental Leave - greater expansions, with superannuation too

In December last year, we wrote about the historic modernisation of the Paid Parental Leave Act 2010 (Cth) (the Act) by the Federal Government through the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023 (Cth) (First Amendment).

To recap, the First Amendment:

• extended paid parental leave (PLP) from 18 weeks to 20 weeks;

• removed the idea of ‘primary’, ‘secondary’ or even ‘tertiary’ claimants;

• removed the requirement that the ‘primary’ claimant has to be the birth parent;

• allowed the access to and payment of PLP days to be more flexible;

• introduced a family income limit; and

• expanded eligibility to allow an eligible father or partner to receive pay.

The most significant of these changes was the amount of PLP - 20 weeks. Fathers or non-birth parents were also given access to it equally.

Further expansions from 2024

Now the Federal Government has passed further changes with the Paid Parental Leave Amendment (More Support for Working Families) Bill 2023 (Second Amendment). This Second Amendment passed in the Senate on 18 March 2024 and was assented on 20 March 2024.

The Second Amendment further increases the maximum period of flexible PLP available by an additional 2 weeks each year from 1 July 2024 until 1 July 2026.  

Effectively, this means that by 1 July 2026, PLP will be a total of 26 weeks. Parents will be able to pre-claim this amount starting from March 2026.

In addition, by 1 July 2026 the number of PLP days that parents can take together has been increased to four weeks. Four weeks instead of two will be reserved on a “use it or lose it” basis. This means that a parent must take at least four weeks of leave to be able to claim the full amount of PLP available to them.

Finally, the Government announced a plan to pay superannuation on all PPL effective from 1 July 2025. This was a key recommendation of the Government’s Women’s Economic Equality Taskforce previously considered too expensive to fund.

In statements following the passage of the Second Amendment, the federal Government said that the changes would be expected to assist more than 180,000 families per year, and would made PPL more accessible, flexible and equitable.

What should employers do now?

Employers have an important role in administering and delivering paid parental leave pay. If employers have not already done so since the passage of the First Amendment, they should consider their policies, procedures and systems and ensure:

·         their HR and management personnel are aware of the scheme, including both rafts of changes;

·         they provide for the accurate recording of employment details including leave entitlements;

·         they enable the delivery of PLP including providing for accurate record keeping;

·         they enable requests for information and records to be met as may be required; and

·         they provide for the making of required ongoing disclosures where circumstances change.

Contraventions of the Act (such as to make the correct instalment of pay, and at the specified time) may result in civil penalties. Thus legal advice should be sought in the event of any employee concerns or disputes.

These Amendments reflect the trends in parental leave policies in the private sector across Australia. Employers may wish to heed these changes and consider whether their policies still make them an employer of choice in the current labour market.

Authors: Sylvia Moses & Hannah Lawson