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HR in practice: Birth of new parental leave scheme imminent

Every Issue

Cite as: December 2010 84(12) LIJ, p.72

Many primary carers can look forward to 18 weeks of paid parental leave when a new federal scheme is introduced next month.

On 17 June 2010, federal Parliament passed the Paid Parental Leave Act 2010, paving the way for “primary carers” to be paid the federal minimum wage of $570 per week for 18 weeks.

The legislation applies to eligible primary carers on the birth or adoption of a child on or after 1 January 2011.

The paid parental leave (PPL) is wholly funded by the federal government, with the Family Assistance Office (FAO) being the regulatory and administrative body in charge of making payments.

PPL payment eligibility

To be deemed eligible for the PPL payments, the primary carer of the child must:

  • have worked for at least 10 out of the 13 months prior to the anticipated birth or adoption of a child;
  • have worked at least 330 hours in that 10-month period, with no more than an eight-week gap between two consecutive working days. The 330 hours equates to 7.6 hours per week of paid work;
  • have a personal taxable income of $150,000 or less in the previous financial year;
  • be an Australian resident or a holder of a special category visa; and
  • be on leave or not working from the time they become the child’s primary carer.

The person in question need not work full-time. The PPL is open to:

  • part-time, casual or seasonal workers;
  • contractors or those who are self-employed;
  • workers in family businesses;
  • those who work for multiple employers; and
  • those who have recently changed jobs.

PPL obligations for employers

Commencing on 1 January 2011, the FAO will make the payments directly to the eligible employee. At this point, there is no need for the employer to administer the payments.

However, from 1 July 2011 the FAO will make payments directly to the employer who will then have the responsibility of forwarding the payments onto the eligible employee (providing they have worked for the same company for at least 12 months prior to the birth of a baby/adoption of a child). If the eligible employee has not served 12 months of continuous service, the FAO will make the payments to the primary carer, therefore effectively bypassing the employer.

With any change to legislation comes the need to amend policy, procedures and contracts of employment. It is therefore of paramount importance that these employment instruments reflect the introduction of this new paid leave.

To make sure your firm is ready to provide PPL to any eligible employees, you can register for the PPL scheme through the Centrelink Business Online Services at http://bit.ly/bQ0K2D.

Working while receiving PPL payments

If an employee chooses to return to work within the 18 weeks paid leave, their payments will cease. Having said this, the disused portion can be transferred to the partner of the first primary carer (or separated father) providing they are eligible to receive the payments.

The employee has the right to “keep in touch” with their workplace without unduly affecting their payments. A return to the office, for the purpose of keeping in touch, should not be within 14 days of the child being born and cannot be more than 10 days in duration.

For instance, the employer may have scheduled a brief training course and, with dual consent, the employee could attend without reducing their entitlement to the paid leave. The employee is also entitled to be paid by the employer for this ad hoc work or training at their normal rate of pay.

PPL effects on existing leave and paternity leave payments

If eligible, the employee can access both the PPL and existing employer-provided paid or unpaid leave.

However, the PPL does not give the employee an entitlement to leave and it does not change any existing leave entitlements, such as unpaid parental leave as stated in the National Employment Standards (www.fairwork.gov.au).

Employers who currently have obligations under certain agreements or contracts will be required to continue meeting these obligations and make payments accordingly.

For more information on PPL, see www.fairwork.gov.au or call the Fair Work Information Line on ph 13 13 94



KIRSTEN VAN DE HOEF is a human resources consultant with the LIV.

This information has been provided by the LIV’s human resources department. It is of a general nature only and does not constitute legal advice. Every effort has been made to ensure the accuracy of the information provided, however the LIV assumes no responsibility for errors, omissions or subsequent variations, or in relation to anyone acting in reliance on the information provided. Please note that the information was correct at the time of writing, however it is strongly recommended that you obtain a copy of the Fair Work Act or refer to the Fair Work webpage for more information before using the above information.

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