Government hiking paid parental leave entitlements

It's meant to reflect the rise in the average wage.
It's meant to reflect the rise in the average wage. Photo credit: Getty Images.

The Government is increasing paid parental leave entitlements by $51 per week from the start of July, an increase meant to reflect the rise in the average wage.

New parents off work looking after their babies are entitled to receive payments equal to their average weekly income up to a current maximum rate. This is adjusted annually to reflect any increase in average weekly earnings.

Currently, for employees, the maximum rate is $661.12 a week before tax.

But the Government is hiking this by 7.7 percent so the maximum rate will become $712.17. That's an additional $51 a week or $1327 for those taking the full 26 weeks off.

The changes come into effect on July 1.

Radhakrishnan acknowledged "it's tough for families right now".

"The minimum rate for self-employed parents will increase to $227 per week, which is equal to 10 hours of the minimum wage for an adult worker," said  Associate Minister for Workplace Relations and Safety Priyanca Radhakrishnan.

"The extra $51 per week will help support a large number of families with 56,200 people receiving a payment in 2022."

A Budget 2023 announcement also means that from mid-2024, new parents will receive a 3 percent government contribution to their KiwiSaver while they are on paid parental leave as long as they continue their own contributions. 

"The Government is committed to making sure that families receive the support they need with this important investment, enabling parents to focus on their new-borns in the early days," Radhakrishnan said.