Australia has taken a significant step towards supporting new families and addressing gender inequality. The government’s paid parental leave scheme has been officially expanded to 26 weeks. This change is expected to benefit about 180,000 Australian families.

The Changes

The current 20 weeks of paid leave that parents can access will be gradually increased by two weeks each year from July 2024 until the 26-week rate is reached in 2026. The rate of pay, equivalent to the national minimum wage (about $882.75 per week), remains the same.

Starting July 1, new parents who either had or adopted a child after July 2023 can access the expanded maternity leave scheme. The full 20 weeks, which will first increase to 22 weeks this year, is provided to both parents if their combined income is less than $350,000. If a couple’s combined income exceeds that amount, the majority of the leave can be provided to one parent who earns less than $168,865. A single parent must be earning less than $350,000 to access maternity leave payments.

The Impact

Social Services Minister Amanda Rishworth lauded the “historic” changes and said it would pave the way for increased support for Australian households, particularly mothers. “The government has made great strides to ensure the scheme is more accessible, flexible and gender-equitable for Australian families,” she said.

The Future

The changes come after Labor announced it will pay superannuation on government-funded parental leave from July next year in a bid to close the nation’s stubborn gender gap in retirement savings. Under the proposal, parents of babies born on or after July 1, 2025, will receive 12 per cent superannuation on top of their government-funded parental leave. Currently, women retire with about 30 per cent less in retirement savings than men – which adds up to about $67,000.

Prime Minister Anthony Albanese said the new reforms were the biggest boost to paid parental leave since 2011. “Our policy will give families more leave and more flexibility, to ensure the system works in a way that’s best for them,” Mr Albanese said in a statement. “A parental leave system that empowers the full and equal participation of women will be good for business, good for families and good for our economy.”

How Australia Compares to Other Countries

All but one of the 38 member countries in the Organisation for Economic Co-operation and Development (OECD) provide some kind of paid leave for new parents—whether maternity leave, paternity leave, parental leave, or some combination. The notable exception is the United States, which only provides up to 12 weeks of unpaid parental leave, meaning federal law allows new parents to take time off from work without pay, though many private employers offer their own version of paid parental leave as a benefit to employees.

While Greece offers the most paid maternity leave in the OECD, at 43 weeks, according to a 2022 report, Sweden—the first country to do away with gender-specific leave for new parents in 1974—offers the most total paid parental leave, with each parent entitled to up to 240 days of paid leave (and a single parent entitled to 480 days). The OECD average, according to the 2022 report, is 2.3 weeks of paid paternity leave, 18.5 weeks of paid maternity leave, and 39 weeks of paid parental leave.

Conclusion

The extension of Australia’s paid parental leave is a significant step towards supporting new families and addressing gender inequality. It not only provides financial support to families but also promotes gender equality by encouraging both parents to take time off for childcare. However, there is still room for improvement, such as further extending the leave period and increasing the rate of pay. As the changes take effect, it will be interesting to see the impact on Australian families and the progress towards gender equality. Comparatively, Australia’s new policy aligns it more closely with other developed nations, although it still falls short of the most generous policies. As the world continues to evolve its understanding and support of parental roles, it is likely that we will continue to see changes in these policies.