In a landmark move to support working families, the Albanese Labor Government rolled out major enhancements to Australia’s Paid Parental Leave (PPL) scheme starting 1 July 2025. The reforms aim to provide greater financial stability for new parents and promote gender equity in caregiving and retirement outcomes.
As of 1 July 2025, eligible parents of children born or adopted on or after this date are entitled to 120 days (24 weeks) of government-funded Parental Leave Pay, up from the previous 110 days. This enhancement is now active and should be reflected in payroll and leave planning systems for all impacted employees.
Additionally, the simultaneous leave allowance for couples has doubled from 2 weeks to 4 weeks, allowing both parents to take paid leave concurrently for a longer period.
To access the extended leave, parents must meet the following criteria:
Child’s Birth or Adoption Date: Must be on or after 1 July 2025
Work and Income Test: Applicants must satisfy employment and income requirements
Non-Working Days: PPL is not payable on days when the parent is working
Claims can be submitted up to three months before the expected date of birth or adoption. If a claim is lodged before 1 July 2025, the entitlement will remain at 110 days, with an additional 10 days added once proof of birth or adoption after the cutoff date is provided.
In a significant policy shift, the government will begin paying superannuation contributions on PPL from 1 July 2025. Contributions will be calculated at the new 12% Superannuation Guarantee rate and paid as a lump sum to the parent’s nominated super fund after the end of the financial year. The initiative, administered by the Australian Taxation Office (ATO), is designed to help close the gender gap in retirement savings.
Parents will also benefit from a rise in the weekly PPL rate, which will increase from $915.80 to $948.10, in line with the National Minimum Wage adjustment. Over the 24-week entitlement, this amounts to an additional $775.20 in total support.
The government has committed to further expanding the scheme. From 1 July 2026, the total duration of PPL will increase to 26 weeks, with 4 weeks reserved for each parent on a “use it or lose it” basis. This measure is intended to encourage shared caregiving and promote workplace equality.
For further detailed guidance on payroll, employment law, and compliance in Malaysia, visit our Australia Global Insight on the activpayroll website. You can also explore broader regional updates and expertise in the APAC Global Expertise web section.
If you have any questions or need tailored advice, we encourage customers and potential clients to get in touch. Please complete our Contact Us form, and a member of our team will be happy to assist with your queries.