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Paid Parental Leave - key details for employers

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HC Online | 13 May 2010, 12:00 AM Agree 0
On Tuesday 4 May 2010, the Federal Government released an Exposure Draft Bill for public consultation. Human Capital presents a guide to what employers should expect.
  • Denise Newcombe | 13 May 2010, 05:26 PM Agree 0
    I assume the paid parental leave is to be paid to those employees who elect to return to work following the birth of a child (or adoption). What would happen if the individual, after receiving paid parental leave decided not to return to work and resigned from his/her position during parental leave?
  • Lady Casual Position | 28 Jun 2010, 05:49 PM Agree 0
    What if your baby is due late December 2010. The remainder of the 18 weeks would not be paid? Its a bit unfair to miss out unless you planned the baby to be born a certain date.
  • Robin Pollock | 01 Jul 2010, 12:11 PM Agree 0
    Is there clarification yet on what employers must do with an employee who goes on Parental Leave (has the baby) in say the last quarter of 2010 but their P/L extends into 2011? Does this new legislation kick in only for people beginning their Parental Leave after 1/1/2011? Reading the above suggested that employers don't have to pay anthing until after 1 July 2011???
  • Iain Hopkins - editor, Human Capital | 05 Jul 2010, 05:25 PM Agree 0
    Hi all, thanks for your comments. Sarah-Anne Brittain of of Horizon Communications provides these responses to the questions posed above.

    "I assume the paid parental leave is to be paid to those employees who elect to return to work following the birth of a child (or adoption). What would happen if the individual, after receiving paid parental leave decided not to return to work and resigned from his/her position during parental leave?"
    - Anyone who passes the work test (outlined in the document reproduced below) may be eligible for PPL. So they don't have to commit to returning to the workplace. It is funded entirely by the Australian Government and not by the employer.

    "What if your baby is due late December 2010. The remainder of the 18 weeks would not be paid? Its a bit unfair to miss out unless you planned the baby to be born a certain date."

    - Only parents of babies born or adopted on or after the 1 Jan 2011 will be eligible for PPL. If their child is born on the 31 December 2010 they are able to claim the Baby Bonus and Family Tax Benefits if they meet current eligibility criteria.

    "Is there clarification yet on what employers must do with an employee who goes on Parental Leave (has the baby) in say the last quarter of 2010 but their P/L extends into 2011? Does this new legislation kick in only for people beginning their Parental Leave after 1/1/2011? Reading the above suggested that employers don't have to pay anthing until after 1 July 2011?"

    - The role of employers is being phased in. For babies born on or after the 1 January 2011 employers can opt in to process PPL payments. Where they choose not to, these will be paid directly by the Family Assistance Office. From the 1 July 2011 employers will be required to process PPL payments for their long-term employees.

    *********Additional material below - media release from the Australian Government

    Australia’s first Paid Parental Leave scheme at a glance

    The scheme will provide up to 18 weeks Parental Leave pay at the National Minimum Wage ($570 a week before tax from 1 July 2010) 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 funding 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.

    Paid Parental Leave is fully 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?

    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 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 Parental Leave 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 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 mother of a newborn child or are the initial primary carer of a recently adopted child
    • 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
    • are an Australian resident.
    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), and had no more then an eight week unpaid break between working days..

    Paid Parental Leave will be for eligible working parents, including full-time, part-time, seasonal and casual workers, contractors, the self employed, and people who have had multiple employers.
  • Melanie Tanner | 19 Jul 2010, 10:48 AM Agree 0
    I am due on the 17th of December with my first baby. I have worked full time with my current employer for years and I think its unjust that I fit all the critera for hours worked etc except my baby will be born before Jan 1st. How can they just ignore us like we dont count. We work just the same as everyone else, Arent our babies just as important??????
  • Narelle | 21 Aug 2010, 04:53 PM Agree 0
    Just to clarify. Is a person penalised if they take the ppl and decide whilst off work to NOT return to work? Do you have to pay the money back to the Government if you don't return to work?
  • F Carroll | 18 Sep 2010, 05:01 PM Agree 0
    Although I am due on 1st Jan,scans have suggested that my due date may be a week earlier. I have been working for three years after the birth of my first child so I more than qualify to receive the paid leave. As both myself and husband are currently working, we do not qualify for the baby bonus since it has been means tested. Together we do not earn any where near the $150,000 cut off. It''s very unfair that for a week or so we would not receive any government assistance. If payments must start on Jan 1st, parents should be paid most of the parental leave. Is it possible to receive 17 weeks paid leave if the baby arrives a week earlier?
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