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Article | Global News Briefs

Australia: Changes to parental leave/benefits and domestic violence leave

November 23, 2022

Australia proposes to expand government-paid parental leave to add time and flexibility for both parents, and separately introduces employer-paid domestic violence leave.
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Employer Action Code: Monitor

Australia’s recently announced 2022 – 2023 federal budget includes a proposal to combine Parental Leave Pay (PLP) for new mothers and primary caregivers with Dad and Partner Pay for new fathers/domestic partners as a single, sharable benefit that would gradually increase in duration from 20 weeks to 26 weeks by July 1, 2026. The changes are intended to support and incentivize both parents to take parental leave during the first two years after the birth or adoption of their child. Parliament still needs to approve enabling legislation in order for the changes to take effect. Separately, employees will be entitled to 10 days of employer-paid family and domestic violence leave from February 2023 as a result of recent amendments to the National Employment Standards (NES).

Key details

The proposed changes to parental benefits are:

  • From July 1, 2023, the existing government-paid maternity and paternity leave entitlements (18 weeks and two weeks, respectively) would be combined as a single 20-week, gender-neutral, sharable entitlement for parents. Single parents would receive payments for the full 20-week period.
  • Payments would be more flexible, as new fathers would be able to receive PLP benefits while receiving employer-paid paternity leave benefits and both parents would be able to take leave in a single block or in smaller increments (such as one day) within 24 months of the birth or adoption of a child. Currently, the main care provider has the option to take up to 30 days of PLP benefits on a flexible basis while the secondary carer may take leave on a flexible basis only after the primary carer’s PLP period is over; additionally, employees must not be receiving employer-paid paternity leave benefits in order to be eligible for Dad and Partner Pay.
  • Claimants who exceed the individual annual income limit (156,647 Australian dollars as from July 1, 2022) and thus are now ineligible for PLP benefits would be eligible to claim PLP benefits provided annual household income did not exceed 350,000 Australian dollars.
  • The duration of PLP benefits would increase from 20 weeks to 22 weeks from July 1, 2024; to 24 weeks by July 1, 2025; and finally to 26 weeks on July 1, 2026.

Separately, effective February 1, 2023, the current entitlement to five days of unpaid family and domestic violence leave, under the NES of the Fair Work Act, will increase to 10 days and will be employer-paid. For small businesses (i.e., companies with fewer than 15 employees), the new entitlement will apply as from August 1, 2023.

Employer implications

Although PLP benefits are provided for up to 20 weeks in total, the benefit is modest (812.45 Australian dollars per week effective July 1, 2022; roughly equal to the weekly national minimum wage) and is subject to income tax. It is not payable to individuals earning more than the income limit. Accordingly, half of companies surveyed provide supplemental paid parental benefits, offering 12 weeks of leave at full pay (in addition to PLP benefits) for the primary caregiver at the median. The median benefit for secondary caregivers is two weeks at full pay. Such distinctions between the primary and secondary caregivers would disappear under the proposed consolidated leave approach. Employers should monitor development of the legislation while reviewing the potential impact of the amendments on their policies and practices.

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