Parental Leave Changes and Childcare Subsidies

Parental Leave Changes 

In the biggest reform to the Paid Parental Leave Scheme since its’ introduction in 2011, the government will be investing over $530 million over a 4-year period, starting in 2022. The expansion to the scheme will see families be able to access up to 26 weeks of paid parental leave, which can be claimed on top of employer-funded parental leave. The government has looked to take a more flexible approach to these reforms, with a ‘use it or lose it’ system to encourage both parents to take leave. Leave can also be taken in blocks as small as one day, with periods of work in between.  

Weekly Rate  Before Change (20 Weeks)  After Change (26 Weeks) 
$812.45  $16,249  $21,123 


Childcare Subsidies 

Over a 4-year period, the government will be investing $4.7 billion into early childhood education and childcare. From July 2023, childcare subsidy rates will increase by up to 90% for families earning less than $530,000 collectively. These reforms are estimated to increase the hours worked by parents with young children, particularly women, who are estimated to increase hours worked by up to 1.4 million hours a week. 

Here is a breakdown of how the subsidy will affect families at different income levels.  The prior subsidy changes are on the left and the new on the right.

Family Income  Subsidy Before Changes  Subsidy After Changes  Family Income (slides 1% for every $5k after $80,000) 
$0 to $72,466  85%  90%  $0 to $80,000 
$72,467 to $177,466  Between 85% and 50%  70%  $180,000 
$177,467 to $256,756  50%  56%  $250,000 
$256,757 –  $346,756  Between 50% and 20%  36%  $350,000 
$346,757 to $356,756  20%  16%  $450,000 
$356,757 and above  0%  0%  $530,000