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Published 27 June 2023 | 2 min read
Enhanced financial support for families during the critical period of parental leave.
We understand the importance of family and the need for strong support systems during significant life events. That's why we are excited to share with you the latest update from the Ministry of Business, Innovation & Employment (MBIE). Starting from 1 July 2023, parental leave payments in New Zealand will be increased by 7.7%. This change aims to provide greater financial assistance to families during the critical period of parental leave.
Currently, New Zealand's paid parental leave entitlements stand at $661.12 per week before tax. However, the upcoming increase will raise this amount to $712.17 per week. For eligible parents who take the full 26 weeks of parental leave, this means an additional $51 per week or an extra $1,327 in total. These enhanced payments will go a long way in supporting families across the country.
Workplace Relations and Safety Associate Minister, Priyanca Radhakrishnan, emphasises the significance of this increase, stating, "The extra $51 per week will help support a large number of families with 56,200 people receiving a payment in 2022." It is evident that the government is committed to ensuring families receive the necessary support during this crucial time.
The adjustment in parental leave payments also takes into consideration the rise in the average wage, reflecting a fair and equitable approach. Self-employed parents will witness an increase in the maximum weekly rate of paid parental leave to $227 per week or the equivalent of 10 hours of the minimum wage for an adult worker. These adjustments aim to align the support provided with the changing economic landscape and the rising costs of living.
It is important to note that parental leave payments are government-funded and administered by Inland Revenue. This means eligible parents will receive financial assistance even if they do not qualify for parental leave from their employment. The government's commitment to supporting families extends beyond traditional employment scenarios, ensuring that all parents can access the assistance they need.
In addition to the increased parental leave payments, new parents will also receive a three percent government contribution to their KiwiSaver accounts while on paid parental leave, starting in mid-2024. To qualify for this contribution, parents must continue their own KiwiSaver contributions. This initiative further highlights the government's dedication to investing in families and enabling parents to focus on their newborns during the crucial early days.
As small-to-medium managers and decision-makers, this update presents an opportunity for you to support your employees and create a positive workplace culture. By proactively communicating this increase in parental leave payments, you can ensure that your employees are aware of the support available to them. Encouraging your employees to take the full 26 weeks of parental leave will enable them to fully embrace their roles as parents, leading to increased motivation and engagement upon their return to work.
By valuing work-life balance and promoting family-friendly policies, you can create an environment where employees feel supported and empowered. This, in turn, leads to higher productivity, enhanced employee satisfaction, and improved loyalty within your organisation.
Let us seize this opportunity together to make a positive impact on the lives of our employees and our organisations. By embracing the increased parental leave payments and fostering a supportive work environment, we can create a brighter future for all.
Sources:
Ministry of Business, Innovation & Employment (MBIE)
HRD article: Parental leave payments to go up 7.7% in July