Paid Parental Leave increase to help families - from 1 July 2024

Published 20 June 2024 | 2 min read

In recent years, the cost of living in New Zealand has presented significant challenges for many families. For new parents, balancing the financial demands of raising a child with everyday expenses has been particularly strenuous. These struggles have been exacerbated by rising costs in housing, groceries, and essential services, making it difficult for families to make ends meet during what should be a joyous and bonding time.

As these financial pressures have intensified, families have found themselves in even tighter spots. The increasing gap between wages and living costs has made it harder for parents to provide for their newborns while also maintaining financial stability. For employers, the resulting stress on employees can affect workplace morale and productivity, leading to a challenging environment for both managers and staff.

However, there is a glimmer of hope on the horizon.

What are the parental leave changes?

Starting from Monday, 1 July 2024, the New Zealand Government is implementing a 6% increase in parental leave payments to align with the rise in average weekly earnings. This adjustment is designed to offer much-needed relief to families, ensuring that parents have more financial support as they take time off to bond with their newborns.

Workplace Relations and Safety Minister, Hon Brooke van Velden, emphasises the importance of this increase, noting that it will put more money into the pockets of Kiwi parents during a critical time. The maximum parental leave payment rate for eligible employees and self-employed parents will rise from $712.17 to $754.87 gross per week. For self-employed parents, the minimum payment rate will also see an uplift from $227.00 to $231.50 gross per week, reflecting the recent minimum wage increase.

"This maximum rate reflects a six per cent increase, in line with increases to average weekly earnings," says Ms van Velden. "We know families are doing it hard right now. This Coalition-Government is committed to making sure that families and parents receive the support they need to give their new child the best start to life. Paid parental leave is one way that this is done."

Will the increase make a difference?

The benefits of this increase are substantial. Families will have enhanced financial security, enabling parents to focus on their newborns without the added stress of financial strain. This boost in support also underscores the Government's recognition of the crucial role parents play in the early stages of a child's life and their commitment to providing adequate resources for this responsibility.

For businesses, understanding and supporting this change is vital. Employers should ensure that their HR departments are well-informed about the updated rates and are prepared to assist employees in navigating these changes. Clear communication about eligibility, payments, and the process for returning to work will be essential in maintaining a supportive and informed workplace.

In conclusion, the upcoming increase in parental leave payments is a significant step towards easing the financial burden on new parents in New Zealand. By recognising the challenges and offering tangible support, the Government is helping to create a more balanced and supportive environment for families. Employers, by staying informed and empathetic, can play a crucial role in facilitating this positive change and ensuring that their workplaces remain conducive to the well-being of all employees.

For the most up-to-date information about parental leave, including eligibility, payments, and returning to work, please visit the Employment New Zealand website.