From 1 July 2026, Australia’s government-funded Paid Parental Leave (PPL) scheme will reach its final planned expansion, increasing from 24 weeks to 26 weeks of paid leave for eligible families. The changes form part of the Federal Government’s ongoing reforms aimed at improving workforce participation, supporting families and promoting greater gender equality in caring responsibilities.
For employers, the changes may affect workforce planning, leave management and employee communications. For employees and prospective parents, the reforms provide additional financial support and greater flexibility in how parental leave can be shared between carers.
What is changing?
The most significant change is the increase in government-funded Paid Parental Leave from 120 days (24 weeks) to 130 days (26 weeks) for children born or adopted on or after 1 July 2026. The entitlement is paid at the National Minimum Wage and administered through Services Australia.
The Government estimates that, once fully implemented, eligible families will have access to approximately six months of government-funded parental leave.
Importantly, the scheme is no longer structured around a traditional “primary” and “secondary” carer model. Instead, parents can allocate much of the entitlement between themselves, subject to certain reserved periods.
Leave for the Other Parent
From 1 July 2026, where there are two eligible parents, 20 days of Paid Parental Leave will be reserved for the other parent on a “use it or lose it” basis. If those days are not used by that parent, they cannot generally be transferred to the other parent.
The purpose of this reform is to encourage greater participation by both parents in the care of a newborn or newly adopted child and to support workforce equality outcomes.
Concurrent Leave Arrangements
One of the more practical features of the modern scheme is that eligible parents may be able to take part of their Paid Parental Leave entitlement concurrently.
This allows both parents to spend time at home together during the early stages following a birth or adoption, providing additional support during a period that is often both physically and emotionally demanding.
Who is eligible?
Although the entitlement is increasing, individuals must still satisfy the applicable eligibility criteria, including:
- The work test;
- The income test;
- Residency requirements; and
- Care requirements relating to the child.
How does this interact with Employer-Funded Parental Leave?
Many employers offer paid parental leave benefits in addition to the Government scheme.
The Government-funded entitlement does not generally prevent employees from accessing employer-funded parental leave where available. Employees may be entitled to receive employer-funded parental leave benefits as well as Government Paid Parental Leave, subject to the terms of their employment contract, enterprise agreement, workplace policy or applicable industrial instrument.
Employers should therefore review their existing parental leave policies to ensure they accurately reflect the expanded Government entitlement from 1 July 2026.
As workplace expectations continue to evolve, employers who proactively support employees through parental leave transitions are likely to see benefits in recruitment, retention and employee engagement.
At FC Lawyers, our experienced business and corporate team can assist with advising on, employment law, drafting contracts, termination and other related matters. Contact our team to discuss your legal options.
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