In a move aimed at improving support for families, the Australian government will expand the Parental Leave Pay scheme starting from July 1, 2025.
The change will see the number of paid leave days increase from 110 to 120 for parents of children born or adopted on or after that date. The increase, along with other accompanying changes, reflects an ongoing commitment to bolstering support for working parents across the country.
This expansion is part of a broader effort to ensure that both biological and adoptive parents have the necessary time and financial support to care for their newborns or newly adopted children. As parents face increasingly demanding work-life pressures, the new provisions are a welcome step in providing some relief for Australian families.
Expanded Parental Leave: Key Changes
Under the new rules, parents can now claim up to 120 days of paid parental leave, an increase from the previous 110 days. This entitlement applies to children born or adopted on or after July 1, 2025.
Parents can also begin their claims up to three months before the expected birth or adoption of their child, offering more flexibility in how and when they can take time off work. This is especially beneficial for families planning their leave in advance.
The parental leave payments are set at a rate of $183.16 per day before tax, amounting to $915.80 per five-day week. This rate is based on the national minimum wage, providing a significant amount of support for parents taking time off from employment.
However, it is important to note that to qualify for the scheme, parents must meet specific eligibility criteria, including passing a work and income test. Furthermore, parents must refrain from working during the period they receive Parental Leave Pay, which ensures that the leave is used for caregiving purposes.
Superannuation Contributions to Boost Financial Support
In another important change, starting in July 2025, the Australian Taxation Office (ATO) will pay a 12% superannuation contribution on Parental Leave Pay. This means that parents will have additional financial support for their retirement savings while they are on parental leave.
Superannuation contributions will be paid directly into the parent’s superannuation fund after the financial year in which they received Parental Leave Pay. The superannuation contribution is a notable development, as it acknowledges the importance of safeguarding a parent’s long-term financial security while they take time off to care for a child.
Furthermore, if the parental leave is shared between two parents, each individual will receive a superannuation contribution based on the share of the leave they take.