On 1 January 2011 the Commonwealth Government’s paid parental leave scheme commenced operation. The scheme is funded by the Commonwealth Government and will provide eligible working parents with parental leave pay at the national minimum wage – currently $570 a week before tax – for up to 18 weeks.
The Government scheme provides eligible employees with an entitlement to pay while enjoying an entitlement to parental leave. The leave entitlement itself comes from elsewhere – usually the Fair Work Act. The scheme is intended to apply in addition to any existing entitlements to paid or unpaid leave under an employer provided parental leave scheme or industrial instrument.
In order to receive Government parental leave payments, an employee must first submit a claim to the Family Assistance Office. To be eligible for payments under the Government scheme, an employee must:
- be the primary carer of a newborn or recently adopted child;
- be an Australian resident;
- meet the work test by working at least 330 hours in 10 of the 13 months prior to the birth or adoption of the child with no more than an eight week gap between two consecutive working days;
- have received an individual adjusted taxable income of $150,000 or less in the previous financial year; and
- be on leave or not working from the time he or she becomes the child’s primary carer.
Where an employee is eligible, the Family Assistance Office will either notify the employer that it will be required to administer parental leave payments (through the employer’s normal payroll processes), or the Family Assistance Office will itself provide the payments to the employee.
Employers can elect to provide eligible employees with parental leave pay from 1 January 2011, but they will not be required to do so until 1 July 2011.
Employers should take steps to prepare administrative and payroll systems and processes to accommodate administration of parental leave pay, and consider whether any new measures are required. Existing arrangements conferring parental leave benefits, such as industrial instruments, employment contracts and policies, should be reviewed to assess how they fit with the Government scheme.
We are on hand to answer any questions or concerns you may have about your particular circumstance or any other business queries you may have, so please contact us.
OBT thanks Michael Tamvakologos, Partner, and Quyen Le, Lawyer, at Blake Dawson. © Blake Dawson 2010. This article reproduced with permission and was first published in Blake Dawson’s Employment Alert on the Blake Dawson website at www.blakedawson.com.