Q&A for employers
The proposed scheme is subject to the passage of legislation.
When will Paid Parental Leave start?
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?
You do not have to do anything right now.
Information for employers, employees and the community about how the Paid Parental Leave scheme will work will be available in mid 2010, in the lead up to commencement of the scheme.
Which of my employees will be eligible for the Paid Parental Leave scheme?
Generally, Paid Parental Leave will be for mothers of a newborn child or the parent of an adopted child. To get Paid Parental Leave, 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?
No. The Family Assistance Office will be responsible for determining eligibility.
To which employees will I have to pay Paid Parental Leave?
Employers will only pay Paid Parental Leave 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 Australian Government funds to pay Paid Parental Leave?
The Family Assistance Office will administer the scheme and ensure that you receive the funds in advance of paying Paid Parental Leave to your employees in their usual payroll cycle.
How will I pay Paid Parental Leave to my employee?
Employers will pay Paid Parental Leave in accordance with their usual pay practices.
Will I have to make superannuation payments for employees on Paid Parental Leave?
Employers will not be required to make superannuation payments on pay provided under the Government’s Paid Parental Leave scheme.
What implications will Paid Parental Leave have on other employer obligations?
Employees will not accrue additional leave while they are on Paid Parental Leave.
The Productivity Commission has recommended that legislation and guidelines relating to the employer function of paying Paid Parental Leave 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?
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 will ensure employers and parents both know when Paid Parental Leave is to be paid to a parent by their employer.
Has the Government consulted with business?
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 Australian Government will continue to consult with payroll specialists and software developers to ensure the smooth implementation of the scheme for employers.
How much will parents get and for how long?
An eligible person can get taxable Paid Parental Leave payments at the level of the National Minimum Wage (currently $543.78 a week) for a maximum period of 18 weeks. Paid Parental Leave pay must be used within one year of the child’s birth or adoption.
Will parents be able to get both Paid Parental Leave and employer-provided maternity leave?
Yes, parents will be able to get both employer-provided and Paid Parental Leave.
Parents can take Paid Parental Leave before or after employer-provided paid leave, such as recreation leave and employer-provided maternity leave. They can also take Paid Parental Leave at the same time as employer-provided leave.
More information about how the scheme will operate will be available in mid 2010.