A new plan would see families gain greater flexibility with how they use paid parental leave entitlements.

Minister for Women Kelly O'Dwyer says the Federal Government will allow parents to tailor the payments to suit their needs by changing when parents can access entitlements.

“We know there are thousands of parents who don't access all of their parental leave payment, which means that they are missing out,” she said.

“It's a pretty rigid system right now. You've got your 18 weeks, and you use it or you lose it.”

Parental leave is currently paid at the national minimum wage of $719.35 a week before tax in a single 18-week chunk.

The partner of a parent that receives this payment is eligible for up to two weeks of paid leave. taking couples to a combined 20 weeks of paid leave.

If the proposed changes were to pass Parliament, parental leave will be able to be taken in blocks.

Ms O'Dwyer said it could see more fathers spend time as a child's primary carer.

“We know that families actually want more choices about their family arrangements,” she said.

“And it doesn't take into account that there are many women who are self-employed, who are running their own small businesses, and who can't spend 18 weeks away from their business.

“So we want to give them the flexibility to choose, to take their parental leave payment in blocks, in the way that suits them. And we also recognise that there are many fathers who also want to spend time as the primary care giver with their families as well.”