Q&A for employers
The proposed Paid Parental Leave scheme is subject to the passage of legislation.
When will Paid Parental Leave start?
A. Paid parental leave will be available for eligible parents of children born or adopted on, or after, 1 January 2011.
What do I have to do?
A. You do not have to do anything right now.
Information for employers, employees and the community about how the scheme will work will be available in 2010, in the lead up to commencement of the scheme.
Which of my employees will be eligible for Government Paid Parental Leave?
A. Generally the payment will be for mothers of a newborn child or the parent of an adopted child. To get the payment, this person must be the primary carer of the child and:
- have been engaged in work continuously for at least 10 of the 13 months prior to the expected birth/adoption
- have worked at least 330 hours in that 10 month period (an average of 7.6 hours per week)
- have an adjusted taxable income of $150,000 or less in the previous financial year; and
- meet the scheme’s residence requirements.
The scheme will cover employees, including casual employees, the self-employed and contractors.
Will I have to work out if my employee is eligible?
A. No. The Family Assistance Office will be responsible for determining eligibility.
Which employees will I have to make PPL payments to?
A. Employers will make payments only to employees who have completed 12 months or more continuous service immediately prior to the expected date of birth or adoption of the child.
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How will I receive the Government funds to make the Paid Parental Leave payments?
A. The Family Assistance Office (Centrelink and Medicare) will administer the scheme and ensure that you receive the funds in advance of making Paid Parental Leave payments to your employees in their usual payroll cycle.
How will I make the payments to my employee?
A. Employers will pass on payments in the same way as they do with wages.
Will I have to make superannuation payments for employees on Paid Parental Leave?
A. Employers will not be required to make superannuation payments for Government Paid Parental Leave from the commencement of the scheme in 2011. This issue will be revisited as part of the overall review of the scheme in 2013.
What implications will Paid Parental Leave have on other employer obligations?
A. Employees will not accrue additional leave while they are on Government Paid Parental Leave.
The Productivity Commission has recommended that legislation and guidelines relating to the employer paymaster function explicitly rule out any impacts on payroll tax or work cover obligations.
How will I know whether my employees are applying for Paid Parental Leave?
A. As is the case now, parents will notify and agree leave arrangements with their employer in the weeks prior to the birth or adoption of their new child.
The Family Assistance Office (Centrelink and Medicare) will ensure employers and employees both know when payments to parents are to be made.
Has the Government consulted with business?
A. Yes. The Australian Government has consulted with business organisations and employers to help make the new Paid Parental Leave arrangements as simple as possible.
The Government will continue to consult with payroll specialists and software developers to ensure the smooth implementation of the scheme for employers.
More information about how the scheme will operate will be available in 2010.