Families will soon be able to access more paid parental leave under an expansion of the scheme.
Laws introduced to parliament on Thursday will allow for parents to access six months of paid parental leave by 2026.
Families already have access to 20 weeks of paid leave, but under the changes that will increase by two weeks each year from July 2024, until the 26-week rate is reached in 2026.
While the 26 weeks will be able to be shared by both parents, the changes will result in each parent receiving four weeks of reserved leave as part of the scheme.
Both parents could also use the four weeks of reserved leave at the same time, with it being on a use it or lose it basis.
Social Services Minister Amanda Rishworth told parliament the new laws would provide greater flexibility for families.
"Paid parental leave is critical for families, is critical for women and it is critical for the economy," she said on Thursday.
"We know paid parental leave is vital for the health and wellbeing of parents and their children."
The government will spend about $4.4 billion a year on paid parental leave by 2026/27.
It is estimated 180,000 families will benefit from the expansion of the scheme each year.
Ms Rishworth said the scheme was designed to allow both parents to take paid time off for caregiving.
"Research shows that periods of leave set aside for partners and that are not transferable to both parents encourage secondary caregivers to take that leave," she said.
"It helps to normalise fathers' use of parental leave and signals that parenting is a shared and equal partnership."
Of the almost 179,000 people on paid parental leave in the 2021/22 financial year, 99 per cent were women.
The expansion to paid parental leave to six months was first flagged last year.
Chief executive of parent advocacy group The Parenthood, Jessica Rudd, welcomed the scheme's expansion, but said it should be extended further.
"A new baby is life-changing and paid parental leave allows parents to bond with their new arrival and adjust in that first year, while providing critical financial support," she said.
"The federal government should ramp up its ambition with an expansion of the paid parental leave scheme to 52 weeks, to be equally shared between parents where there are two carers."
Business Council of Australia chief executive Bran Black said the six months of leave would bring flexibility to caregiving roles.
"Inflexibility in paid parental leave is a barrier to women participating fully in the economy," he said.
"Removing all barriers in Australia could see an extra 461,000 full-time people enter the workforce and an extra $128 billion a year added to the economy."
Minderoo Foundation's Thrive By Five initiative, which advocates for greater support for early childcare, also backed the changes.
However, director Jay Weatherill said more needed to be done to support families.
"Even with the legislated increases, Australia's paid parental leave entitlements remain far too low amongst comparable nations," he said.
"Our paid parental leave rates are not sufficient to adequately support the financial needs of families."
