Parental leave payments rising 7.7%

New Zealanders with newborn children will receive increases to their parental leave payments as of 1 July 2023.

Parental leave payments for employees will increase by 7.7% from 1 July 2023 – or from $661.12 to $712.17 gross per week – to reflect the 7.7% rise in average weekly earnings. That will mean an extra $1327 for those taking the full 26 weeks of parental leave.

Under the Parental Leave and Employment Protection Act 1987, eligible parents are entitled to payments equal to their normal pay up to the current maximum rate. The maximum rate is adjusted annually to account for any increase in average weekly earnings.

In another change that will take effect on 1 July, the minimum rate for self-employed parents will increase from $212 to $227 gross per week, which is equal to 10 hours of the minimum wage for an adult worker. This reflects an increase in the minimum wage, to $22.70 per hour, on 1 April 2023.

“It’s tough for families right now,” Associate Minister for Workplace Relations Priyanca Radhakrishnan said. “The Chris Hipkins government is committed to supporting Kiwi families to have a bit more in the pocket and ease some of the pressures they are facing.”

According to government figures, 56,200 people received parental leave payments in 2022.

KiwiSaver changes starting in mid-2024

Meanwhile, starting in mid-2024, under a measure that was introduced in this year's budget, new parents will also receive a 3% government contribution to their KiwiSaver while on paid parental leave, provided they continue their own KiwiSaver contributions.

This aims to make sure workers' retirement savings don't get affected by taking parental leave.

“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,” Associate Minister Radhakrishnan said.

For more information about parental leave, consult the Employment New Zealand website.