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National on Economy
Economy · In depth

Paid parental leave: 26 weeks to 30

In depth — from National’s policy document

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.

Now
26 weeks
By 1 July 2029
30 weeks
In three steps: +1, +1, then +2
Longer-term aim
40 weeks
No date; stated as subject to fiscal conditions
Shared leave
Both parents at once
In any combination they choose
Holiday pay
Paid in full on return
Annual leave keeps accruing during parental leave
Cost
$327.4m over four years
From Budget operating allowances
What would change
  • Paid parental leave rises from 26 weeks to 30, in three steps
  • Parents could take their leave at the same time, in any combination and order
  • Annual leave continues to accrue during parental leave, and is paid in full on return
What would not
  • The maximum weekly payment rate, which the document says is unchanged
  • Eligibility settings, also stated as unchanged
  • The total entitlement per child — sharing divides the 30 weeks rather than adding to them

How it would work

The three steps, and when each applies

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.

  • Budget 2027 — from 1 July 2027 — 27 weeks
  • Budget 2028 — from 1 July 2028 — 28 weeks
  • Budget 2029 — from 1 July 2029 — 30 weeks
Why it is staged

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.

Taking leave at the same time

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.

The legislation it would change

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.

Holiday pay after parental leave

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.

Worked examples

These scenarios and figures are National’s own, from the document.

Two ways parents could use 30 weeks together
The situation
  • A couple has a combined entitlement of 30 weeks once the final increase applies
  • Under current rules they could split it, but only take it one after the other
What happens
  • Both could take paid leave together for 15 weeks
  • Or both take four weeks together, then one takes ten, then the other takes twelve
  • The combined total stays 30 weeks either way

What they expect it to cost

2027/28
$27.0m
2028/29
$56.6m
2029/30
$119.0m
2030/31
$124.9m

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.

In their own words

“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.”

Building the Future: Modernising Paid Parental Leave · Extending paid parental leave

“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.”

Building the Future: Modernising Paid Parental Leave · Fiscal impact

“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.”

Building the Future: Modernising Paid Parental Leave · Shared parental leave

What the document doesn’t settle

Points the document defers or leaves undefined. These are gaps in the document, not criticisms of the policy.

  • The 40-week aim carries no date and is stated as subject to fiscal conditions.
  • The schedule depends on Budget operating allowances, and the largest step is timed to a forecast surplus — the document does not say what happens to it if that forecast changes.
  • Sharing divides the entitlement rather than adding to it, and the document does not say how the weeks would be apportioned if parents could not agree.
  • It does not say whether the maximum weekly payment would move over the period, only that the rate policy is unchanged.
Summarised from Building the Future: Modernising Paid Parental Leave, published by New Zealand National Party. Authorised by J de Joux. Read 2026-08-14.
Link to the published document to come.
Back to National on Economy

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