I'm proud to be a part of a government that is delivering on its election commitments around gender equality, closing the gender pay gap and reforming Paid Parental Leave. The reforms in the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 are an investment in women's economic equality. They will also have significant benefits for families and the Australian economy. Parents will have more time to spend with newborns: six months in total. More paid leave will ease the cost-of-living pressures for young families and, importantly, create greater capacity for parents to share parenting, build a career and earn a pay packet.
Challenges facing young families across my electorate of Corangamite, and across the nation, clearly illustrate the importance of this bill. I'm referring to young working parents battling to establish a home, taking on a mortgage, beginning a family and striving for a good start in life for their children. With its rapid population growth, among the fastest in the nation, Corangamite has many such families. In the latest census the largest change in population in Greater Geelong was in the 30 to 39 years age grouping, with an almost 30 per cent population increase.
The urban growth area of Armstrong Creek, where my electorate office is located, is now the youngest locality in Greater Geelong, with a median age of 30 years. There are similar growth areas with young families in Bannockburn, Ocean Grove and Torquay. These young families in my community, and other communities across the nation, will benefit directly from this bill's reforms. By giving more families access to government parental leave payments and providing greater flexibility in how they take leave, we're encouraging parents to share the important role of caring for their children.
In the process, we're advancing gender equality. The changes set out in this bill have been widely welcomed by family and gender advocates, and employer and union groups, because they know that one of the best ways to boost productivity and workforce participation is to provide more choice and support for families and more opportunities for women. In my own electorate these reforms have also been enthusiastically welcomed by people who have been advocating for modernisation of paid parental leave for years, and I'd like to thank them for their advocacy. The Albanese government has listened and it is delivering.
This bill is about families, gender equity and strengthening our economy. It is the largest expansion of the Paid Parental Leave scheme since Labor established the scheme in 2011. In a nutshell, the bill proposes delivering six important changes from July this year: combining the two existing parental leave payments into a single 20-week scheme; reserving a portion of the scheme for each parent to take time off after a birth or adoption; making it easier for both parents to access the payment by removing the notion of primary and secondary carers; expanding access by introducing a $350,000 family income test under which people can qualify if they do not meet the individual income test; increasing flexibility for parents to choose how they take paid parental leave days and transition back to work; and allowing eligible fathers and partners to access the payment, irrespective of whether the mother or birth mother meets the income test or residency requirements.
This bill is just the first tranche of the government's Paid Parental Leave reforms announced in the budget. The government will bring forward further legislation to start in July 2024, progressively increasing the scheme until it reaches 26 weeks of leave in 2026, a full six months of leave. Around 180 families are receiving the payment each year, and they will benefit from this fairer, more flexible and more generous scheme.
The current scheme does not do enough to provide access for fathers and partners. Currently, dads take government-paid leave at roughly half the rate of mums. The scheme as it stands today is built on the gendered assumptions of primary and secondary carers, which limit parents' ability to share care. Our bill fixes that anomaly.
Nor does the current scheme treat families equally. The eligibility rules are unfair for families where the mother is the higher income earner. You could have two families with a household income of $200,000. One family is eligible because the father is the primary income earner; the other is ineligible because the mother is the primary income earner. That's just unfair. This bill fixes that anomaly. Under the current scheme, a father or partner who is a citizen or permanent resident can be ineligible purely because the birth mother doesn't meet the income test or residency requirements. Our bill fixes that anomaly too.
Currently, there are two payments from the government. Parental leave pay provides up to 18 weeks of payment and is primarily targeted at mothers, while dad and partner pay provides up to two weeks of payment to fathers and partners. Under this bill, parental leave pay and dad and partner pay will be combined to form a single 20-week payment that can be shared between both parents. This will give parents more choice and more flexibility in how they use and share care, better reflecting how Australian families want to parent. This flexible choice is especially popular among people I have spoken to within my electorate. An important feature of the current scheme is a period of leave for the exclusive use for fathers and partners in the form of dad and partner pay. The government's changes preserve this important feature by reserving two weeks of payment for each parent. By incorporating this reserved portion under a single scheme, rather than as a standalone payment, we are making sharing of parental leave between parents a central part of this reform.
This bill supports both parents to take leave beyond the two-week reserved period. Importantly, single parents will be eligible for the full 20 weeks. Another significant benefit of the move to a single 20-week scheme is that it will allow fathers and partners to receive the government payment at the same time as their employer-paid leave. While this is currently available to mothers under the Paid Parental Leave scheme, the legislation requires that those receiving dad and partner payments must be on unpaid leave in order to receive their dad or partner pay. Fixing this inequality removes a financial disincentive for fathers and partners to access the scheme and take time off work to care for a child. Allowing both parents to claim the government payment alongside employer-paid leave makes it easier for them to maintain their income while caring for their child. Hopefully, this will lead to more partners and dads taking leave.
We know that when both parents are not supported to take time off from paid leave to care for their babies mums usually work less or leave the workforce altogether to take on caring responsibility, while dads often remain in full-time work. This pattern lasts for years after the child's birth and is a key driver of the gender pay gap in workforce participation and earnings. When fathers take a greater caring role right from the start, this establishes patterns of care that continue throughout a child's life. In addition to benefits for women and their economic equality there are physical, mental and social benefits for men and women.
This bill improves gender equality and inclusion under the scheme by removing the notion of primary and secondary carers and allowing all eligible parents to claim the payment. Currently, mothers must make a successful claim for their parental leave pay and then transfer the payment to their partner if they want to share some of it. The process is complex and makes it difficult for fathers to take leave, even when it's in the best interests of their family. In 2021-22 less than one per cent of mothers transferred some of their payment to fathers or partners. The new, simpler claiming process will also allow eligible fathers and partners to qualify if the mother or birth parent does not meet the income test or the residency requirement. More than 2,000 additional fathers and partners will have access to the scheme each year because of this change. The shift to a gender-neutral claiming process is also important because it's more inclusive and recognises that Australian families are diverse.
To guard against any negative consequences for mothers resulting from the new process, the birth parent will have to approve the amount of the leave claimed by the other parent. The bill will also introduce a family income limit of $350,000, which will operate alongside the existing individual income limit, which is currently around $157,000 per annum. Parents, including single parents, will be eligible for the payment if they meet either the individual income or the family income test. With the introduction of the family income limit, families will no longer be denied access solely because of the income of the mother. This change is expected to particularly benefit families where the mother is the primary income earner—with nearly 3,000 additional parents becoming eligible each year. This change is long overdue. Between the 2010 and the 2017 financial years the number of women with taxable incomes of more than $150,000 has more than doubled. The introduction of a more generous family income test will help ensure the scheme keeps up with changing times.
The government is improving flexibility for families to balance work and family life in the way that best suits their needs. Currently, parental leave pay is split into a 12-week period that must be taken in a continuous block within 12 months of the birth or adoption followed by six weeks that can be taken flexibly within two years of the date of birth or adoption. And if a parent returns to work before the end of their continuous 12-week paid parental leave period they forfeit the remaining days of that period. This limits the choice for parents, particularly mothers, in how they transition back to work.
Under the bill's amendments, parents can take all of the payment in multiple blocks, as small as a day at a time, within two years of the birth or adoption of their child. This new flexibility will support mothers to return to work whenever they wish without the risk of losing their entitlements. This will particularly benefit the increasing number of parents who work part-time or who are self-employed to continue working after the birth or adoption. Some birth parents may wish to take most or all of the payment in continuous blocks. The legislation supports parents to do this if they wish. We know this is an important option to support physical and mental health, and it is important for mothers who do not have access to any employer-paid leave. Supporting maternal and child health and development is an important objective of the Albanese government and of the Paid Parental Leave scheme. In addition, both parents will have the option of taking the government-paid leave on the same day for up to 10 days of the payment. This will help parents share caring responsibilities right from the start and help dads and partners care for mothers to support their health and wellbeing. This scheme is flexible, it is fair and it will drive positive health, social and economic outcomes for both parents and their children.
In closing, I would like to recognise the former Labor minister for families, Jenny Macklin, who was an absolute champion and who was instrumental in developing Australia's first Paid Parental Leave scheme. This bill continues this great initiative and continues Labor's commitment to paid parental leave. It is good for parents, it is good for kids, it is good for employers and, importantly, it's good for our economy. It's the first step in the Albanese government's delivery of our central election commitment to parents and the Australian people. I commend the bill to the House.
