National proposes lifting paid parental leave from 26 weeks to 30 in three annual steps between 2027 and 2029, and separately allowing both parents to take their leave at the same time rather than only one after the other. It would also keep in force the change letting annual leave accrue during parental leave so returning parents are paid in full. The stated longer-term aim is 40 weeks.
Each increase is funded from a specific Budget and takes effect the following July. An increase applies to parents whose entitlement commences on or after its effective date, so it is the start date of the leave that decides which entitlement applies rather than the date of birth alone.
The document says announcing the whole pathway up front gives families certainty and employers time to prepare, and that staging keeps each step affordable within tight operating allowances. It notes the largest increase, in 2029, is timed to coincide with the forecast return to surplus that year.
Parents can already split the entitlement, but not use it simultaneously. This would let them take all or part of it together, apart, then together again in whatever order suits — while the combined total stays the same.
Shared leave would come through amending the Parental Leave and Employment Protection Act 1987, along the lines of the Parental Leave and Employment Protection (Shared Leave) Amendment Bill currently before Parliament. The document says the change is not expected to cost the Crown significantly, with Inland Revenue absorbing administration within baselines.
Annual leave has been paid on average weekly earnings over the previous 12 months, so a parent taking a holiday soon after returning could be paid less because of time spent at home. Under the Employment Leave Act, which replaces the Holidays Act, leave keeps accruing during parental leave and is paid in full, from 1 July 2027. National would keep those provisions in force as legislated.
These scenarios and figures are National’s own, from the document.
Totalling $327.4 million. National’s own figures, based on the gross cost forecast in BEFU 2026 and net of the additional PAYE the Crown collects on parental leave payments. Each step is to be met from the operating allowance in Budgets 2027, 2028 and 2029.
“Each increase applies to parents whose entitlement commences on or after the effective date. Policy on maximum weekly rates and eligibility settings will be unchanged.”
“The largest extension of paid parental leave, scheduled for 1 July 2029, is timed to coincide with the forecast return to surplus that financial year.”
“This additional flexibility is not expected to generate any significant costs for the Crown, because by itself this policy does not increase paid parental leave entitlements for each child born.”
Points the document defers or leaves undefined. These are gaps in the document, not criticisms of the policy.
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