The Government is set to increase paid parental leave by $16 per week from July 1.

From July the maximum payment for eligible employees and self-employed persons will increase from $488.17 per week to $504.10 gross per week.

Labour Minister and Tauranga MP Simon Bridges annouced the rise today.

Labour Minister Simon Bridges says the increase reflects a 3.3 per cent increase in the average weekly wage during the past year.

Under the Parental Leave and Employment Protection Act 1987, parents eligible for the scheme are entitled to up to 14 weeks paid leave at a rate calculated on the basis of their average weekly earnings.

The maximum rate is adjusted every year to account for any increase in average weekly earnings.

'In addition to this increase, the Government announced a significant overhaul of parental leave as part of Budget 2014, which will make it available to more people, for a longer period, and with increased flexibility,” says Simon.

In the Government's budget, released earlier this month, it was announced the current 14 weeks' paid parental leave will increase to 18 weeks in two stages — to 16 weeks from 1 April 2015 and 18 weeks from 1 April 2016.

The eligibility of paid parental leave will also be expanded to include caregivers other than parents – including permanent guardians – and to extend payments to people inless-regular work or who recently changed jobs.

'Some flexibility will also be introduced to parental leave to allow, for example, an employee to attend a course or work an occasional day.

'Supporting children and families is a priority for this Government, and the changes will ensure New Zealand's parental leave framework better reflects modern working arrangements and today's diverse family structures.”