Oct 17th, 2022
The federal government announced on Saturday that parental leave pay (PLP) will be extended to 26 weeks in a staged plan leading up to July 2026. This would be equivalent to 6 months of paid leave.
The current entitlement provides for 18 weeks of PLP for primary carers, and 2 weeks for secondary carers, both paid at the national minimum wage.
The new scheme will allow for two-parent households to determine how they will split the leave – with the hope that it will incentivise secondary carers, including fathers, to divide responsibility for childcare more evenly. Single parents will be able to access the full 6 months of leave.
Prime Minister Anthony Albanese said that increasing PLP was ‘one of the clearest calls for action from our Jobs and Skills Summit.” The government hopes that the changes will increase women’s workforce participation by providing more support and flexibility for families, and increasing overall productivity across the economy.
The president of the Australian Council of Trade Unions (ACTU), Michele O’Neil, acknowledged that this was a significant improvement on the current PLP scheme, but also noted that the ACTU would continue advocating for the leave to be paid at the employee’s full wages plus superannuation, rather than at the national minimum wage.
The changes may also be a positive step towards addressing gender inequality and the gender pay gap in Australia, which was announced as 14.1 per cent in August (an increase of 0.3 per cent over the last 6 months). The scheme will hopefully encourage fathers to take extended leave, and promote parenting as a joint responsibility, rather than being primarily the mother’s role.
It has been 11 years since PLP was first introduced in Australia, and 9 years since Dad and Partner Pay came into effect, so this update has been long-awaited by parents and advocacy groups. While the change has been welcomed, it has also brought attention to the fact that Australia has one of the weakest parental leave schemes in the world. Of the total 38 OECD countries, there are 31 nations that offer more generous maternity leave entitlements than Australia. Australia does fare better in providing paid leave for non-primary carers (often the father) in comparison, with 20 nations offering equivalent or less than Australia. However, Australia’s scheme is funded purely from taxation revenue, whereas other countries may use contribution measures or insurance-like schemes to generate these funds.
The government plans to outline the changes officially and provide further details in the upcoming budget set to be unveiled in a few weeks’ time. Additional PLP will not come into effect until almost 2 years from now, in July 2024.
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