From 1 July 2026, eligible parents of children born or adopted on or after that date can access 130 days of government-funded Parental Leave Pay — equivalent to 26 weeks — marking the final stage of the Paid Parental Leave Amendment (More Support for Working Families) Act 2023. The partner reserved days have also increased from 15 to 20 days on a use-it-or-lose-it basis, and from July 2026 the ATO pays superannuation contributions on government-funded Parental Leave Pay for eligible recipients. For HR and payroll teams, the changes create a number of practical review points — from updating parental leave policies to confirming payroll system settings and understanding the employer's obligations under the scheme. This article covers what changed, how the scheme interacts with employer-funded parental leave, and what teams need to have in place.

What changed on 1 July 2026

The Paid Parental Leave (PPL) Amendment (More Support for Working Families) Act 2023 reached its final stage of expansion on 1 July 2026. Children born or adopted on or after that date attract 130 days of government-funded Parental Leave Pay — equivalent to 26 weeks based on a five-day work week. The previous entitlement was 120 days (24 weeks).

The following table summarises the key changes that took effect on 1 July 2026.

The partner reserved days — how they work

Of the 130 days available from 1 July 2026, 20 days are reserved for the partner and cannot be transferred to the primary carer. If the partner does not use their reserved days, those days are forfeited — they do not revert to the primary carer. This use-it-or-lose-it structure is designed to encourage both parents to take time away from work.

For single parents, all 130 days are available to the primary carer. The reserved days provision does not apply.

Superannuation contributions on Parental Leave Pay

From July 2026, the ATO will pay a superannuation contribution of 12 per cent on government-funded Parental Leave Pay for eligible recipients. This applies where the child was born or adopted on or after 1 July 2025. Recipients do not need to take any action — the contribution is paid automatically by the ATO to the recipient's nominated superannuation fund in the financial year following the commencement of payments.

What the rate is

Parental Leave Pay is paid at the national minimum wage. From 1 July 2026, the rate is $200.94 per Parental Leave Pay day, or $1,004.70 per five-day week. Parental Leave Pay is taxable income.

A note on pre-existing claims

For parents who submitted a pre-birth claim before 1 July 2026, Services Australia will automatically add the additional 10 days once proof of birth or adoption is provided, bringing the balance to 130 days. No new claim is required.

Government-funded PPL and employer-funded parental leave — understanding the relationship

The July 2026 statutory changes apply to the government-funded Parental Leave Pay scheme administered by Services Australia. They do not override employer-funded parental leave entitlements, which continue to be governed by employment contracts, enterprise agreements (EAs), and workplace policies.

Understanding the distinction between the two — and how they interact — is essential for HR and payroll teams managing parental leave requests.

Government-funded Parental Leave Pay

Government-funded PPL is paid at the national minimum wage and administered by Services Australia. Employees apply directly to Services Australia.

Where an employee meets all of the following conditions, the employer is required to deliver Parental Leave Pay to the employee on behalf of Services Australia — the employer is reimbursed by Services Australia and does not bear the cost:

• the employee expects to take at least 8 consecutive weeks of Parental Leave Pay in a single block

• the block falls within one year of the child's birth or adoption

• the employee has worked with the employer for at least 12 months

• the employee will remain employed by the employer until at least the last day of the payment block

Where an employee does not meet all of these conditions, Services Australia pays the employee directly. However, if both the employer and employee agree, the employer may still choose to deliver Parental Leave Pay even where the conditions are not met.

Employer-funded parental leave

Employer-funded parental leave is a separate entitlement that arises from the terms of an employment contract, an enterprise agreement, or a workplace policy. It is funded by the employer, not the government, and its terms — including duration, rate of pay, and eligibility — are determined by the relevant instrument.

The increase in government-funded PPL to 26 weeks does not automatically alter employer-funded entitlements. Where an employer's policy or agreement provides for a period of paid parental leave that is equivalent to, or partially offset against, government-funded PPL, the interaction between the two entitlements will depend on the specific terms of the instrument.

How the two interact in practice

Where both government-funded and employer-funded PPL apply, the sequencing and interaction depends on the terms of the employer's policy or agreement. HR and payroll teams should confirm:

• Whether the workplace policy or enterprise agreement sets out how government-funded PPL and employer-funded PPL are to be taken — concurrently, consecutively, or in some other arrangement

• Whether the policy or agreement needs to be updated to reflect the increase in government-funded PPL to 26 weeks, particularly where it references specific durations or amounts

• Whether any top-up payment arrangements need to be recalculated

Where the terms of an existing policy or agreement are unclear or potentially inconsistent with the current entitlements, advice from a workplace relations specialist is recommended before communicating updated arrangements to employees.

What HR and payroll teams should review and update

The expansion of government-funded Parental Leave Pay to 26 weeks creates a number of practical review points for HR and payroll teams. The following covers the areas most likely to require attention.

1. Review and update parental leave policies

Workplace parental leave policies should be reviewed to confirm they accurately reflect the current government-funded PPL entitlement of 130 days. Policies that reference specific durations — such as "up to 18 weeks of government-funded PPL" or similar — will need to be updated. Where the policy sets out how government-funded and employer-funded PPL interact, the sequencing and any top-up arrangements should also be reviewed for consistency with the current entitlement.

Any updates to a policy that forms part of an employment contract or enterprise agreement should be handled in accordance with the relevant variation requirements.

2. Confirm payroll system settings

Where the employer acts as a payment conduit for government-funded PPL, payroll systems should be configured to process up to 130 days. Teams should confirm that:

• The system can accommodate the updated entitlement period

• Payment timing settings comply with the requirement to pay on the employee's ordinary pay day or the first ordinary pay day after funds are received from Services Australia

• The Paid Parental Leave Superannuation Contribution (PPLSC), which is directly remitted by the ATO, must be correctly mapped and excluded from the employer's Superannuation Guarantee (SG) payroll calculations to prevent compliance errors and double-counting.

3. Brief managers on the partner reserved days

The increase in partner reserved days from 15 to 20 days is a change that managers and HR teams may need to explain to employees. Key points to communicate include:

• The 20 reserved days are available to the partner and cannot be transferred to the primary carer

• If the partner does not use their reserved days, those days are forfeited

• The reserved days do not need to be taken consecutively and can be used flexibly — including as single days — provided they are taken before the child turns two

4. Update employee-facing materials and communications

Standard parental leave information provided to employees — including offer letters, HR guides, and induction materials — should be reviewed to reflect the updated entitlement. Employees who are currently pregnant or planning to take parental leave in the near term should be informed of the change directly, including the automatic top-up of 10 days for those who submitted pre-birth claims before 1 July 2026.

5. Confirm the position for single parents and same-sex couples

For single parents, all 130 days are available without the partner reserved days structure applying. For couples — including same-sex couples — the 20 reserved days apply in the same way as for any other couple, with one parent claiming as the primary carer and the other accessing the reserved days. The rules apply consistently regardless of the structure of the couple.

For more complex situations — including surrogacy arrangements and cases involving adoptive parents — Services Australia's published guidance covers eligibility and how the entitlement applies. HR teams should direct employees with questions about individual circumstances to Services Australia directly.

Specific situations — single parents, same-sex couples, and surrogacy

The expanded Parental Leave Pay entitlement applies consistently across different family structures. The following covers the situations most commonly raised by HR teams and employees.

Single parents

Single parents can access the full 130 days of Parental Leave Pay without the partner reserved days structure applying. Where there is no partner on the day the claim is submitted, all 130 days are available to the primary carer. If a single parent subsequently enters a relationship, the reserved days rules may apply depending on the circumstances — employees in this situation should confirm their position with Services Australia directly.

Same-sex couples

The Parental Leave Pay scheme applies to same-sex couples in the same way as any other couple. One parent claims as the primary carer and accesses the shared pool of 130 days. The other parent can access their 20 reserved days on a use-it-or-lose-it basis. Both parents must separately meet the eligibility criteria — including the work test and income test — to access their respective entitlements.

Surrogacy arrangements

In surrogacy arrangements, both the surrogate birth mother and the gaining parent may be eligible to claim Parental Leave Pay independently, provided each meets the relevant eligibility criteria.

Where the surrogate birth mother claims Parental Leave Pay, the payment is intended to support recovery from birth. The surrogate birth mother cannot share Parental Leave Pay days with another person. Claiming as a surrogate birth mother does not affect the gaining parent's eligibility to claim Parental Leave Pay for the same child.

The gaining parent — the person who will raise the child — applies for Parental Leave Pay as the primary carer. For specific eligibility requirements and claiming timeframes that apply in surrogacy arrangements, Services Australia's published guidance should be consulted directly.

Adoptive parents

The scheme applies to adoptive parents in the same way as birth parents. The primary carer of a child entering care applies for Parental Leave Pay, with the 130-day entitlement and 20 reserved days for the partner applying in the same manner. The eligibility criteria — including the work test and income test — apply equally.

A note for HR teams

Individual circumstances can vary significantly, particularly where family structures are complex or where eligibility criteria interact in unexpected ways. HR teams should direct employees with questions about their specific situation to Services Australia's website or contact centre rather than providing advice on individual entitlements. Services Australia's employer toolkit provides guidance on the employer's role in specific scenarios.

The expansion of government-funded Parental Leave Pay to 26 weeks represents the final stage of a multi-year reform. The core obligations for HR and payroll teams are straightforward: confirm that policies and payroll systems reflect the updated entitlement, ensure managers understand the partner reserved days and their use-it-or-lose-it nature, and direct employees with questions about individual eligibility to Services Australia.

For advice on how the changes interact with existing employer-funded parental leave arrangements, or where employment contracts or enterprise agreements require updating, consult a workplace relations specialist.

Official sources:

• Services Australia — Paid Parental Leave scheme changes

• Services Australia — How much Parental Leave Pay you can get

• Services Australia — Employers role in the Paid Parental Leave scheme

• Services Australia — Who can get Parental Leave Pay

• Fair Work Ombudsman — Parental leave

• Fair Work Ombudsman — Payment during parental leave

Last updated: August 2026