Government funded parental leave

A Government funded paid parental leave scheme will come into operation from 1 January 2011 for new births or adoptions.

Who can claim?
Workers who are the primary carer may make a claim. The primary carer will usually be the mother. To be eligible for the payments, the primary carer must:

• have worked continuously for at least 10 of the 13 months prior to the expected birth or adoption, with a break of no greater than eight weeks between any two consecutive work days; and
• have worked at least 330 hours during the 10 month period; and
• must be an Australian-based employee with an Australian employer.

Part time, casual and self employment (ie contractors) will be eligible, but workers earning more than $150,000 will not be eligible.

How much are the payments?
The primary carer of a child will be entitled to up 18 weeks at the national minimum wage which is currently $569.90, provided they can satisfy the work, income and residency tests.

Employees opting for the paid parental leave will not longer by eligible for the baby bonus.

When can employees take their leave?
It must be in one continuous period and cease within 12 months of birth or adoption.

A family can only receive one 18 week period of paid parental leave per birth or adoption.  Paid parental leave must be taken in one continuous 18 week period without any break, even if it is transferred, for example from the mother to her partner.

Who assess eligibility?
Individual employee will be required to apply directly to the Family Assistance Office will initially assess an employee’s eligibility.

Who pays the employee?
Although the scheme is government funded, in most situations businesses will need to distribute the money directly to their employees. Businesses will receive the money from the Family Assistance Office and then pass the benefit onto their employee during their normal pay cycles (weekly, fortnightly etc). They will in effect be the “pay masters”. Businesses will only be required to pay the employee when they have receive the money from the government.

Before payments begin businesses will initially need to provide bank details and pay cycle information to the Government. Businesses will be required to distribute the payment from 1 July 2011 for workers who have been employed by the business for over 12 months.

For the 1st 6 months of the scheme (until 1 July 2011) the FAO will directly administer payment to the employees.

There will be a few other instances when FAO will make the payment such as when an employee resigns before taking the leave. 

What other obligations will businesses have?
Businesses must deduct pay as you go tax (PAYG) from the benefit and issue pay slips to employees as usual.

They will be required to tell the FAO when the employee returns to work, or if they resign during the leave period.

Unpaid benefits must be returned to FAO.

Businesses will not have to make superannuation contributions in respect of the parental leave pay.

It should also be noted that paid parental leave will not result in the accrual of any additional leave entitlements. It will not give rise to any additional workers compensation premium liabilities.

Our company currently has a paid maternity leave policy? What does this mean?
If paid maternity is currently a condition of your employee’s contracts then the government scheme will need to be paid in addition to existing obligations.

Where can I get more information?
More information on the scheme can be found on the Family Assistance Office website: http://www.familyassist.gov.au/.

Otherwise, you can contact an HIA workplace adviser on 1300 650 620.

_{DISCLAIMER – the above is intended to provide general information in summary form. The contents do not constitute specific adive and should not be relied upon as such. Formal specific advice should be sought by members with respect to particular matters before taking action.}