New laws to increase Australia’s government-funded paid parental leave to 26 weeks were passed in the Senate this week, a significant win for working families.
Parents currently have access to 20 weeks of paid parental leave, but under the changes, that amount will increase by two weeks each year from July 2024 until the 26 week rate is reached in 2026.
The legislation builds on previous changes made by the federal government, which started on 1 July 2023, to make Australia’s paid parental leave scheme more accessible, flexible, and gender equitable.
Financial penalty of motherhood
Australian Council of Trade Unions (ACTU) President Michele O’Neil said one of the significant causes of the gender pay gap between men and women is the “motherhood effect”, causing women’s earnings to fall by 55 per cent on average in the first five years of parenthood.
“Increasing the length of time you get financial support and supporting the more equal sharing of caring responsibilities between men and women are long overdue improvements that show the Albanese government’s commitment to addressing the gender pay gap,” Michele said.
“Raising a child can make balancing already stretched budgets a challenge, so this increased financial support for working parents is welcome in a cost-of-living crisis,” she said.
Australia’s paid parental leave system is currently ranked as the second-least favourable country in the developed world, and over 180,000 Australian families access government-funded paid parental leave each year.
This system directly contributes to lower female workforce participation, unequal distribution of caregiving responsibilities, and perpetuating gender inequity.
Once the scheme is fully implemented in July 2026, both parents can share the 26 weeks, and the portion of leave reserved for each parent will increase to 4 weeks.
More to do
Michele said more work was still needed to further enhance and expand Australia’s paid parental leave scheme.
“To build on this already great work, we would like to see further improvements to the scheme, including extending it to 52 weeks and increasing the rate of pay from the National Minimum Wage to ensure we have a paid parental leave scheme that meets the needs of women, families and our economy,” she said.
