The Australian Government introduced a comprehensive Paid Parental Leave (PPL) Scheme for working parents who are the primary carers of a child born or adopted from 1 January 2011.
The Government’s PPL scheme provides eligible parents with up to 18 weeks of pay to the child’s primary carer at the national minimum wage. The scheme also includes an entitlement to ‘Dad and Partner Pay’ for partners of employees who care for a child born or adopted.
When is an employee eligible to receive PPL?
Employees will be entitled to receive PPL if they satisfy the following conditions:
What is the PPL work test?
- Must be the primary carer of a newborn or recently adopted child (the primary carer is the person who is most meeting the child’s physical needs),
- Meet the PPL work test before the birth or adoption occurs;
- Have received an individual adjusted taxable income of $150,000 or less in the financial year either before the date of birth or adoption, or the date the employee applies for PPL (whichever is earlier) and
- Be on leave or not working, from when the employee become the child’s primary carer until the end of their PPL period,
- Satisfy government residency requirements from the date the child enters the employee’s care until the end of their PPL period. Employers will not be required to work out whether an employee is eligible for PPL. This will be done by the government in conjunction with the employee.
In summary, the PPL work test provides that an employee will be eligible under the scheme if they have engaged in work continuously for at least 10 of the 13 months prior to the birth or adoption of the child, and worked for at least 330 hours in that 10 month period, which works out to be around one day per week and does not include more than an eight week gap between two working days.
Employees may meet the work test even if they:
- Are a part-time, casual, or a seasonal worker
- Are a contractor or self-employed
- Work in a family business
- Have multiple employers
- Have recently changed jobs
- Have worked overseas
Employees are encouraged to contact the PPL provider as there may be exceptions where they still qualify for PPL pay.
Who provides the PPL payment?
In most cases, the government sends the employer the PPL pay for “eligible” employees who:
- Have a newborn or recently adopted child
- Have been employed for at least 12 months before the expected date of birth or adoption
- Will remain employed until at least the end of their PPL period
- Is Australian-based and,
- Is expected to receive at least eight weeks of Parental Leave Pay.
Employers can pre-register for the PPL scheme through Centrelink Business Online Services
or register when the government contacts them. Employers can also opt in to provide PPL pay to eligible employees before their employee lodges their claim for PPL.
Dad and Partner Pay
Dad and Partner Pay will provide eligible ‘working’ dads or partners (including adopting parents and same-sex couples) with two weeks of government-funded Dad and Partner Pay at the rate of the National Minimum Wage.
The purpose of Dad and Partner Pay
will help increase the time dads or partners take off work around the birth or adoption and create further opportunities for dads or partners to bond with their child and enable them to support their partner and be involved in caring for their baby right from the start.
Full-time, part-time, casual, contract, seasonal and self-employed workers may be eligible for Dad and Partner Pay.
Is superannuation paid on PPL payments?
Employers will NOT
be required to make superannuation contributions on PPL pay, although they may make voluntary contributions.
How does an employee claim PPL pay?
Claims for PPL can be lodged up to three months prior to the birth or adoption of the child. Parents are able to lodge claims
for PPL online via the government’s website or at the Family Assistance Office located in Medicare offices and Centrelink Customer Service Centres.
Can an employee continue to work and receive PPL payment?
An employee can keep in touch with their workplace while on PPL, without losing the government PPL payment. An employee and their employer must agree to take part in a maximum of 10 ‘Keeping in Touch’
A Keeping in Touch day is recognised as one hour or more on a day and counts towards the 10 day limit. Keeping in Touch days are not available within the first two weeks after the birth or adoption of the child. Employers cannot ask employees to attend a Keeping in Touch day within the first six weeks after the birth or adoption without their agreement. Keeping in Touch days will not extend the period of parental leave of the employee.
The employer is obliged to pay the employee their usual pay rate while attending Keeping in Touch days. Resuming work other than Keeping in Touch days will constitute a return to work which may also bring about an end to the parental leave entitlement.
There is an obligation on both the employee and the employer to inform the government when the employee returns to work during the PPL period.
Does PPL attract accrual of leave entitlements?
Employees may receive PPL pay before, after or at the same time as the employer provides paid leave such as annual leave and long service leave.
Leave entitlements will not accrue during periods of unpaid parental leave even if the employee is receiving PPL pay during this time, however leave entitlements will accrue during periods of paid leave in the usual way e.g. where the employee receives paid annual leave or long service leave while they are on parental leave. Taking paid leave during a period of parental leave does not extend the period of parental leave.
Periods of paid leave and work performed during periods of paid Keeping in Touch days will count as service and therefore attract leave accrual during such periods.
Can a partner claim PPL payment?
Only one parent can be regarded as the primary care giver at any point in time. In situations where the primary care giver returns to work during the first year and has not used the full 18 weeks of PPL pay, the payment may be transferred to their partner as long as they are also eligible.
Please be aware that the government is proposing changes in 2016 where they will facilitate the PPL payment instead of the employer. Employers are encouraged to contact their PPL provider for further information.
PPL pay may affect an individual’s existing family assistance entitlements, child support arrangements and tax obligations.
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This document does not constitute human resource or legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should contact the HR Help Desk or seek professional advice before acting or relying on any of the content. © Wentworth Advantage Pty Ltd 2017