Announcement dates
25 October 2022
Link to announcements
Budget October 2022-23 - Boosting Parental Leave to Enhance Economic Security, Support and Flexibility for Australia’s Families (servicesaustralia.gov.au)
Link to announcement (19 October 2023)
Delivering a historic expansion of Paid Parental Leave | Department of Social Services Ministers (dss.gov.au)
Problem being addressed
29 March 2022 The previous government announced reforms to the Paid Parental Leave (PPL) scheme that were subject to a RIS process Enhanced Paid Parental Leave for Families | OBPR (pmc.gov.au), and which have not yet been implemented. Since that announcement, a new proposal was provided to encapsulate parental caregivers and address gender inequities.
The current PPL scheme provides 18 weeks of Parental Leave Pay (PLP) for the primary carer and two weeks of Dad and Partner Pay (DaPP) to fathers/partners. Under the current income testing rules, a family in which the mother earns more than $151,350 (even when the partner has no income) would not be entitled to PLP, while families in which a mother earns up to $151,350 can access PLP even if their partner earns a high income. Further, the DaPP payment cannot be taken in parallel with employer paid leave as is the case for PLP. The current policy settings have been criticised for reinforcing gender inequities in caregiving by making it hard for fathers/partners to take significant time from their jobs to bond with and care for their baby, and do not take into account how the composition of the workforce is changing by discriminating against families where the mother is the higher income earner.
Proposal
The additional changes, announced 25 October 2022 were:
- Introduce a more gender-neutral claim process, meaning either parent can claim PPL first.
- Reserve two weeks of PLP as a ‘use it or lose it’ entitlement for each parent.
- Allow parents to take one or more days of PLP concurrently.
- Extend PPL from 20 weeks to 26 weeks by 2026, through two week increments per financial year from FY2024 to FY2026.
Assessed RIS outcome
Adequate
Assessment comments
To be assessed as good practice as per the Guide, the analysis needed to be informed by genuine consultation on the specific policy parameters considered in this RIS, to better test the assumptions underpinning the costs and benefits of each option. The OBPR considers that the justification for the preferred option would have been stronger had more targeted consultation been conducted.
Regulatory burden
The Department of the Social Services estimates that this measure will result in annual regulatory costs of $7.48 million on average per year, over 10 years.
Addendum
Since the publication of the full RIS in October 2022, the Australian Government has explored different policy settings focused on the period of Parental Leave Pay reserved for each parent. The original reserved period was two weeks for each parent. An addendum was prepared by the Department of Social Services with additional analysis on increasing the reserved period from two weeks to either four, five or six weeks for each parent.
Reserving a portion of Parental Leave Pay for each parent encourages both parents, not just the birth parent, to take time off work after the birth or adoption of a child. The addendum provides additional information on the likely social and economic impacts, including providing fathers/partners more opportunities and encouragement to share caring responsibilities. This has positive flow-on economic and social impacts, notably supporting mothers/birth parents to return to work. Conversely, a longer reserved period for each parent results in a lower maximum entitlement for an individual partnered parent and disadvantages partnered parents who have no other parental leave options.
The analysis provides decision makers with supplementary information on each reserved period option, and did not present a ‘best’ or ‘preferred’ option. The OIA has not assessed this addendum.