As the Albanese government works to pass its planned expansion of the taxpayer funded scheme, which will bring the entitlement to 26 weeks from 2026, senators Lambie and Pocock have called for reforms to enable small businesses to either pay the entitlement directly or via Services Australia.

While welcoming the extension of the scheme, the pair are co-sponsoring a range of proposed amendments to establish an opt-in or opt-out model for small businesses.

A form of compensation to small business owners for their time in administering the government scheme has also been proposed.

Currently, more than one third of leave entitlements were already paid by Services Australia.

ACT independent David Pocock said the government needed to ensure it did not make running a small business more difficult.

“The burden of administering this important government payment is felt disproportionately by small business people, many of whom are women,” he said.

“I can’t see any downside for small businesses being free to choose whether or not to administer a scheme the government can administer itself, and already does in over a third of cases currently.”

Senator Lambie said the crossbench’s proposed reforms granted small businesses a “choice” when they were already faced with a significant compliance burden.

“They can either choose an opt-in or opt-out model or seek compensation for their time in administering the government scheme,” the Tasmanian senator said.

While the pair remain in negotiations with the government over the issue, the pair has also won $10m over the four year forward estimates period to help small businesses streamline their administration of the payments.

An evaluation of Commonwealth Paid Parental Leave found small businesses with up to 19 staff members spent upwards of 15 hours on average administering the entitlement for at least one employee.