On the 1st of January 2011 the Australian Government delivered the first national Paid Parental Leave scheme. The scheme will help working parents spend more time at home with a new baby during the vital early months. It is government-funded and will help employers retain valuable and skilled staff.
The scheme will provide up to 18 weeks Parental Leave Pay at the National Minimum Wage (currently $570 a week before tax) for eligible parents of children born or adopted on or after 1 January 2011.
The Paid Parental Leave scheme recognises that having a child and taking leave from work around the time of the birth is a common part of work and family life.
From 1 July 2011, Parental Leave Pay will generally be provided by the employer for long-term employees. The Family Assistance Office will provide Paid Parental Leave funds to employers in advance.
The scheme will help employers enhance the family friendly workplace conditions many already offer. Paid Parental Leave can be taken in addition to existing employer-funded schemes, at the same time or consecutively.
Parental Leave Pay is funded by the Australian Government and:
- is available to birth mothers and primary carers who meet the work, income and residency requirements
- can be transferred to the other parent, if eligible
- must be taken in a continuous period, within the first year after birth
- is also available to adoptive parents
- can be received before, after, or at the same time as employer-provided paid leave, such as recreation or annual leave and employer-provided paid and unpaid parental leave.
Families who are not eligible for Paid Parental Leave, or who choose not to take it, can still access the Baby Bonus and Family Tax Benefit (Part A and B) under the usual rules.
Key milestones
Important dates for the implementation of the Paid Parental Leave scheme are:
1 October 2010: The first claims can be lodged by parents (up to three months in advance of the expected birth or adoption). Employers can register to provide Parental Leave Pay to eligible employees.
1 January 2011: Payments will start for eligible parents of children born or adopted on or after 1 January 2011. Parental Leave Pay can be paid directly by employers or by the Family Assistance Office to eligible employees.
1 July 2011: Employers will be responsible for providing Parental Leave Pay to their long-term employees (i.e. those with 12 months service with their employer).
Why is this information important now?
The scheme will help employers enhance the family friendly workplace conditions many already offer. Paid Parental Leave can be taken in addition to existing employer-funded schemes, at the same time or consecutively.
While the scheme begins from 1 January 2011, decisions that prospective parents make now about work could affect their eligibility for Paid Parental Leave under the scheme’s work test.
Employers should be aware that Paid Parental Leave will be a legal entitlement to government-funded pay for eligible parents from 1 January 2011. The role of employers in the scheme is being phased in over the first six months. The Family Assistance Office will provide pay for children born or adopted from 1 January to 30 June 2011 unless the employer chooses to do so.
For children born or adopted from 1 July 2011, employers will be required to provide Parental Leave Pay to their eligible long-term employees, and may choose to provide the pay to other employees. The Family Assistance Office will advance the funds to the employer so that the employee can be paid. Payments to other parents will be made by the Family Assistance Office.
Who is eligible?
Primary carers of babies born on or after 1 January 2011 may be eligible for Paid Parental Leave. Mothers, or the initial primary carer of a recently adopted child, must usually apply for Paid Parental Leave.
Parents may be eligible if they:
- are the primary carer of a newborn or recently adopted child
- are an Australian resident
- have met the Paid Parental Leave work test before the birth or adoption occurs
- have an individual income of up to $150,000 in the previous financial year, and
- have been on leave or not working from the date they became the primary carer until the end of their period of Parental Leave Pay.
Paid Parental Leave can be transferred to another primary carer, if eligible.
What is the work test?
The Paid Parental Leave work test will be met if a parent:
- has been in paid work for at least 10 of the 13 months prior to the birth or adoption of their child, and
- worked at least 330 hours in that 10 month period (just over one day per week), with no more than an eight week gap between consecutive working days.
Seasonal, casual, contractor, self-employed, part-time, full-time workers and people who have had multiple employers may be eligible.
Additional sources of information
- www.familyassist.gov.au
- Parents and prospective parents: Phone 13 61 50
- Employers: Phone 13 11 58
- Brochures summarising the scheme are available for parents and employers to download at www.familyassist.gov.au
- Translated brochures and Indigenous brochures are also available.
- For a copy of the brochures please contact Horizon Communication on (02) 8572 5600.
For more information on other current financial support and leave entitlements for new parents:
- Baby Bonus: http://www.familyassist.gov.au/payments/family-assistance-payments/baby-bonus/
- Family Tax Benefit Part A & Part B: http://www.familyassist.gov.au/payments/family-assistance-payments/family-tax-benefit/family-tax-benefit-part-a/
- National Employment Standards (NES) are part of the Fair Work Act 2009: www.fairwork.gov.au
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