Paid Parental Leave

16 February 2017

Do you understand your practice’s role and obligations in terms of Paid Parental Leave?

The Paid Parental Leave scheme amount for 2017 is $672.60 per week before tax for a maximum of 18 weeks. (This is the weekly rate of the national minimum wage.)

The Paid Parental Leave scheme has two components – Parental Leave Pay, which began in 2011, and Dad and Partner Pay, which was introduced in January 2013.

Paid Parental Leave provides eligible working parents up to 18 weeks government-funded pay when they take time off work to care for a new child. This must be taken as a single block of time. The new Dad and Partner Pay means new fathers and partners now have access to two weeks of paid parental leave as well. Full-time, part-time, casual, seasonal, contract and self-employed workers may be eligible for this leave.

The Paid Parental Leave scheme is administered through Services Australia (formerly the Department of Human Services; includes Centrelink, Medicare and Child Support). Dad and Partner Pay is paid directly to the employee, without the involvement of the employer. In contrast, Parental Leave Pay is paid to the employee via the employer in their usual pay cycle. This means that the employer has to wait to receive the payment from the government before passing it on to the employee.

Paid Parental Leave applies to all employers, no matter the size of the business or the number of staff it employs. Employers should register through the Business Online website, and can do so at any time – you don’t need to wait until you have an eligible employee to register.

It is worth noting that Paid Parental Leave is a payment, not an entitlement to leave, and as such it does not count as salary in relation to the accumulation of entitlements. This means that it does not change employees’ existing leave entitlements or give them a new entitlement to leave.

ACA members should take the time to familiarise themselves with the Paid Parental Leave scheme, and their role and obligations as employers, even if it is not relevant to their practice at this moment in time. Ensuring that you have pregnancy and parental leave policies in place, and communicating these to your employees, means that you will all be ready when a staff member does have children.

Services Australia outlines eligibility for Paid Parental leave and the steps an employer needs to take as follows:

Eligibility is assessed by the department. To be eligible an employee must meet the following criteria:

  • Be the primary carer (usually the mother) of a newborn or recently adopted child;
  • Meet Australian residence requirements from the date the child enters their care until the end of their Paid Parental Leave period;
  • Have met the Paid Parental Leave work test before the birth or adoption occurs;
  • Have received an individual adjusted taxable income of $150,000 or less in the financial year before the date of birth or adoption or the date of claim, whichever is earlier; and
  • Be on leave or not working from the time they become the child’s primary carer until the end of their Paid Parental Leave period.
  • To meet the Paid Parental Leave work test, an employee must meet the following criteria:
  • Have worked at least 10 of the 13 months before the birth or adoption of their child; and
  • Have worked for at least 330 hours in that 10-month period (just over one day a week), with no more than an eight-week gap between any two consecutive working days.

The department outlines the following steps for employers to prepare for providing government-funded Parental Leave Pay to eligible employees:

  • Opt in to provide Parental Leave Pay to eligible employees.
  • Discuss your employee’s leave intentions and workplace entitlements with them.
  • Employee lodges a claim (this can be up to three months before the expected date of the birth or adoption).
  • Services Australia decides whether the employee is eligible.
  • Services Australia decides whether you are required to provide Parental Leave Pay, and we notify you of this decision.
  • You then need to either accept the decision to provide Parental Leave Pay to your employee or seek a review of the decision.
  • If you accept the decision, you then provide your pay cycle and bank account details to Services Australia.
  • You will receive the funds from the department before you provide Parental Leave Pay to your employee.

Resources elsewhere

There is a lot of other useful material available to employers as they navigate this new leave. The following are some of the most useful links:

This article was first published in ACA Communique, July 2013. It has been updated with relevant rates for 2017.