Our modernisation of paid parental leave will support families by giving them more financial breathing space when they take on caregiving responsibilities. “This is part of National’s longer-term vision to eventually extend paid parental leave to 40 weeks, equivalent to around nine months. National will modernise paid parental leave by giving parents flexibility to divide their paid leave in the way that best suits them and their family. Annual leave is currently paid based on average weekly earnings over the previous 12 months, meaning a parent who takes a holiday soon after returning to work from paid parental leave can receive reduced holiday pay. The contribution will be made at the default rate, applied to the paid parental leave a person receives, from 1 July 2027.