Extra paid parental leave for new families has been locked in, with the number of weeks a parent can take set to increase to 26.

The 20 weeks of paid leave families can access at the moment will be gradually bumped up by two weeks each year from July 2024 until the 26-week rate is reached in July 2026.

The legislation passed parliament on Monday and is expected to benefit more than 180,000 families each year.

The scheme is set to cost about $4.4 billion a year from 2026/27.

To encourage more two-parent families to share caring duties, four weeks will be reserved for each parent on a “use it or lose it” basis.

Parents will also get greater flexibility and be able to take four weeks of leave at the same time.

Employers also have a role to play and the payment should be seen as a workplace entitlement instead of welfare, Labor senator Malarndirri McCarthy said.

Nearly two-thirds of employers were offering their own entitlements, up from less than 50 per cent a decade ago, showed a positive trend, she said.

“This normalises paid parental leave as a workplace entitlement which is good for workplace retention and fosters gender-equitable workplaces,” McCarthy told the chamber ahead of the bill passing.

Independent senators David Pocock and Jacqui Lambie, who support the expanded scheme in principle, pushed for an easier ride for small businesses when processing the payments.

They raised concerns that it placed a heavy administrative burden on small businesses and argued the task should instead fall to Services Australia unless firms choose to take it on.

“That is so unfair,” Senator Lambie told the chamber.

“Small businesses do not have human resource departments, they don’t have armies of accountants on their payroll.”

“There is going to be some young mums spending hours and hours administering PPL that Services Australia could be paying directly,” Pocock said.

Only four per cent of businesses each year would need to administer paid parental leave and costs were minimal in terms of time and money despite some employers experiencing a few difficulties, Senator McCarthy said.

“Administering the payment is a reasonable contribution from employers who significantly benefit from the government providing PPL to their employees,” she said.

The government was also helping employers streamline the administrative process, she added.

The government had “come to the party” with $10 million to go towards better system integration aimed at streamlining payment processes, Senator Pocock said.

The Greens pushed for the government to bring forward its pledge to pay superannuation on the government payment from July 2025 but failed.

“There is still no justification for why women are being asked to wait for 16 months,” Senator Larissa Waters said.

– AAP