Background

The ACTU welcomes the opportunity to make a submission on the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 (the Bill) to the Senate Community Affairs Legislation Committee. The Bill implements the first stage of changes promised by the Federal Government to the Commonwealth Paid Parental Scheme (PPL) in the October 2022-23 Budget, which will ultimately see PPL increased to 26 weeks by 2026 (increasing by two weeks per year).

The ACTU fully supports the Bill, which implements important reforms to the Paid Parental Leave Act 2010 (Cth) (the Act) to make PPL more accessible, more flexible and gender-neutral, including: 

  • Combining the current maximum of 18 weeks of parental leave pay with the current 2 weeks of dad and partner pay into one 20 week entitlement which can be taken flexibly by claimants from 1 July 2023;
  • Two weeks reserved on a ‘use it or lose it’ basis for each claimant, with single parents being able to access the full 20 weeks;
  • Making the PPL scheme gender neutral and gender equitable by removing the notion of primary, secondary and tertiary claimants and the requirement that primary claimants of parental leave pay must the birth parent, allowing families to decide who will claim first and how they will share the entitlement;
  • Making PPL consist only of flexible PPL days, allowing claimants to take the payment in multiple blocks as small as a day at a time, within two years of the birth or adoption, and remove the requirement to not return to work in order to be eligible;
  • Introducing a $350,000 family income limit under which families can be assessed if they do not meet the individual income test;
  • Expanding eligibility to allow a father or partner to receive parental leave pay regardless of whether the birth parent meets the income test or residency requirements.

The Bill is the first step in delivering crucial reforms to PPL that have been advocated for by unions and others for many years. The ACTU also welcomes and commends the commitment to increase PPL to 26 weeks by 2026. 

However, there is a lot more to be done to improve and expand Australia’s PPL scheme. Extending the scheme to 52 weeks by 2030, increasing the rate of pay from its low level of the National Minimum Wage, providing incentives for shared parenting, and paying super on top are all changes that are necessary to increase women’s workforce participation, facilitate more equal sharing of caring responsibilities between men and women, and close the gender pay gap. Furthermore, more needs to be done to strengthen the rights of working parents and carers.  

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