Big changes coming to paid parental leave in Australia
by Verve
The government is rolling out significant changes to its paid parental leave, with some improvements kicking in on 1 July this year and even more scheduled for the next two years. It’s about time!
What changes on 1 July 2024
Currently, if you’ve welcomed a baby, you’re eligible for 20 weeks of paid parental leave which can be split between both parents under the federal government’s scheme. From 1 July, that increases to 22 weeks. And in July next year it goes up to 24 weeks, before finally hitting the government’s target of 26 weeks in 2026. (That looks like six months of government paid leave, but not so fast…)
This year, 2 weeks of the 22 weeks are only available to the “second parent”. To encourage both parents to take parental leave, the government has introduced a “use it or lose it” scheme. If the second parent doesn’t take their two weeks of paid leave they forfeit it, and it can not be tacked on to the primary parent’s leave. When the policy comes to its full fruition in 2026, 4 of the 26 weeks will exclusively be for the second parent.
What defines a second parent? Well, parental leave is available for all parents and all kinds of families, as it should be, and for this reason the government doesn’t use any gendered language in regards to the policy. There’s good reason for doing away with the gendered language, but it can result in the slightly awkward requirement for families to explicitly identify a primary and secondary parent. Most parents probably wouldn’t like to think of themselves as doing a secondary job raising their children, and most of us prefer partners to be equal!!
Genderless language with gendered hurdles
On a society wide level, the problem the government is trying to solve actually is a gendered one. The gender pay gap is tied to women taking time out of their careers to have children. Women in heterosexual relationships are overwhelmingly the primary carer for children with only 4% of Australian families reporting a man usually or always looks after the children. So equality in caring for children, AKA dads stepping up, could see the gender pay gap lessen. But for that to happen, families need employers and the government to step up too.
“We know that good women’s policy is also good economic policy, and this investment will promote parenting as an equal partnership while boosting the economy,” Minister for Women Katy Gallagher said.
“This is all about making sure that every family has more choice and better support.”
Super on parental leave? Not so fast.
The fact that superannuation has not been mandated to be paid on parental leave, either under the government scheme or when companies offer paid parental leave, contributes to the gender gap in super savings.
Women are retiring with 25% less super than men on average. And women facing poverty in retirement is a huge issue, with homelessness among older women becoming a growing problem.
But we have positive news. From 1 July 2025, the government will pay the superannuation guarantee on government funded paid parental leave. At Verve, we advocate for government and corporate policies that improve equitable outcomes for women and gender diverse people. We’ll just have to wait another year to see this huge change to parental leave come into effect.
How Verve supports employees and members
Future Group, Verve Super’s parent company, has an open source parental leave policy – that means you’re very welcome to take the policy to your workplace and implement it.
Our policy pays the full super guarantee for a year after the commencement of each parental leave, regardless of whether the leave is paid or unpaid. We also continue to pay super at the full time rate if a parent returns to work part time because of caring duties after parental leave. And, for your first three months after returning from parental leave, you can choose to work four days per week, but be paid for a full five-day week.
All Verve members are invited to apply for our Baby Bump program, which rebates your annual fixed admin fees for 12 months to give your super a little bump after you’ve become a parent, whether by birth or adoption. Simply contact us if you’ve recently welcomed a baby. We can also support you in asking your employer to pay super on parental leave.
If you’ve never checked out the Pay Gap Pledge, now’s the time. We provide tools for you to reach out to your company regarding pay gap policies and will help you advocate for change.
Learn more about how being paid Less Now Means Even Less Later, and be sure to sign up to Verve so you don’t miss a thing!
