Paid parental leave entitlements are set to rise today, up to an extra $40 a week.
It will see the maximum rate increase from $621.76 per week, to $661.12 per week. It totals an extra $1040 across the full 26 weeks.
It is estimated to impact about 20,000 families.
The maximum rate for paid parental leave entitlements is adjusted every year to account for increases in average weekly earnings. The 2021 increase was only 2.5%.
It comes as families continue to struggle with the rising costs of living and food. Inflation leapt to 6.9% in the year to the March 2022 quarter.
The minimum rate for someone who is self-employed would also increase to $212 per week, equal to 10 hours at minimum wage.
Workplace Relations and Safety Michael Wood said the increase "helps to keep paid parental leave up with the cost of living that people are facing".
"It's going to really important in terms of giving a little bit of extra support to young families adjusting to a big change in their lives."
In the year to the March 2022 quarter, average weekly earnings were up 5.7% to $1406.12 for full-time employees, including overtime.