Paid parental leave has been expanded. So what's changed?

New laws boosting accessibility to paid parental leave and locking in an expansion of the scheme have passed parliament.

The government has expanded paid parental leave, but critics insist it isn't enough. Credit: Cavan Images RF

Key Points

• The first tranche of Labor's paid parental leave expansion has passed federal parliament.
• But critics say Labor's final target of 26 weeks does not go far enough.
• Parents will now be entitled to 20 weeks paid parental leave, a two-week boost.

New parents can now access more flexible and generous paid parental leave with fresh changes passing federal parliament.

The new laws combine two existing payments into a shared 20-week scheme, expand access and make it easier for new fathers to obtain paid leave.

Further tranches will seek to progressively increase the amount of leave until it reaches 26 weeks in 2026.

But critics say even Labor's final target does not go far enough, and will see Australia continuing to trail behind other OECD countries.

So what's just changed, and how does Australia compare to the rest of the world?

What's happened?

In the October budget, the government confirmed it will look to expand paid parental leave in Australia from 18 to 26 weeks.

Labor's first tranche of paid parental leave passed parliament on Monday, with its stated aim to increase that progressively until 2026.

It will come into effect for parents whose babies were born or adopted from July 2023.

The changes mean either parent can apply for paid parental leave first, while they will also be able to access entitlement in multiple blocks. That means they will be able to take as little as one day, while working either side.

Single parents will be able to access the full 20-week entitlement.

Labor says a new family income threshold - $350,000 per year - will also see 3,000 additional parents become eligible.

But the entitlements will not be added to superannuation, after both Labor and the Coalition rejected the suggestion.

The weekly paid parental leave rate in Australia is $812.45, the minimum wage, with employers encouraged to provide an additional top-up.

How does it compare to overseas?

Australia still lags behind much of the OECD, where the average paid leave is 61 weeks - 53 weeks for mothers and eight for fathers - according to the OECD Family Database.

That's more than double Labor's suggested benchmark for 2026.

The Nordic region offers particularly generous paid parental leave schemes.

Swedish parents are entitled to 34 weeks leave each. Source: AAP

In Sweden, parents are entitled to 34 weeks each, with 180 days transferable to the other partner. In Finland, it's 23 weeks each, with 69 days transferable.

Estonia offers mothers nearly five months of paid leave at full pay, but a month for fathers. No days are transferable.

There is no federally-guaranteed paid maternity leave in the United States, though parents are federally protected if they decide to take 12 weeks of unpaid leave per year. Just thirteen states have implemented their own paid family leave systems.

What's being said here?

Social Services Minister Amanda Rishworth said the development was the "next step" to ensuring paid leave worked for "modern families".

“Improving paid parental leave is a critical, nation-building reform. Paid parental leave is vital for the health and wellbeing of parents and their children,” she said.

But it's that comparison with the rest of the world that is driving claims that Labor's plan is insufficient.

Social Services Minister Amanda Rishworth has welcomed the changes. Source: AAP

Australia Institute senior economist Eliza Littleton said the implementation of 26 weeks would be "a welcome improvement" for parents, but warned there was a "long way to go" before Australia met international standards.

"Minimal leave entitlements place pressure on parents, in particular women, to drop out of the labour force or take on part-time work during the early years of a child’s life," she said.

"While the improvements are welcome, there’s more to do.”

Ms Littleton also criticised the government for not extending the so-called "use it or lose it" component of paid leave, which sees secondary carers - usually fathers - who do not use that time lose it entirely.

The Greens want 52 weeks, and for PhD students to be included. Source: AAP / RUSSELL FREEMAN

"Australia Institute research shows that countries with a bigger proportion of 'use it or lose it' leave dedicated to secondary caregivers tend to encourage a more even take up of leave between parents," she said.

The Greens are pushing for paid leave to be extended to 52 weeks, and to also include PhD students.

"It's unfair to expect every PhD student in Australia to have the opportunity to get paid work while they are studying full time," Greens senator Mehreen Faruqi said.

"They're struggling to make ends meet amidst the cost of living prices and rising rents."

The Coalition supported the push, with Liberal senator Anne Ruston saying it's important parents are allowed to make their own decisions based on their circumstances.

"Paid parental leave should make it easier for parents ... to spend important time with their new child unencumbered by the pressures of work," she said.

With AAP