Paid Parental Leave

On January 1, the government-funded Paid Parental Leave Scheme (PPL) came into effect, providing 18 weeks’ pay for the primary carer of a newly born or adopted child.  

An employee must satisfy a range of criteria to be eligible for the weekly payment of $569.90 (less PAYG).

• The employee must be the child’s primary carer; that is, the person who most meets the child’s physical needs.
• The employee must have taken leave from his/her workplace or must not be engaged in paid work for the period from the birth (or adoption) of the child until the end of the PPL period. Note that this does not mean that the primary carer is entitled to additional leave over and above any parental leave to which the employee is entitled under the National Employment Standards (NES) contained in the Fair Work Act. This may lead to anomalies in which employees are entitled to the PPL payment, but not eligible to take the leave and have their return to work guaranteed under the NES to be applicable. There are provisions for a primary carer who is not the mother, but the mother must consent to the transfer of the PPL payment.
• The employee must have had a genuine attachment to the labour force for 392 days (about 13 months) prior to the birth or adoption. Further, they must have worked for 330 hours in that period and have worked continuously for a period spanning 295 days (about 10 months) prior to the birth. There are provisions relating to premature birth, pregnancy-related illness, what constitutes continuous work and how work hours are measured, and a careful analysis is required to determine eligibility.
• The employee must have earned an Adjusted Taxable Income (ATI) of less than $150,000 in either the financial year or the 12 months prior to the child’s date of birth. ATI is the sum of: taxable income; fringe benefits; foreign income; net investment losses; exempt pension income or benefit; and reportable superannuation contributions. The income of the employee’s partner is not assessed.
• The employee must make the claim through the Family Assistance Office (FAO) and there are strict requirements about what is contained in the claim and who may make a claim. These requirements are affected by the family circumstances of the employee and whether it is the primary carer or some other person making the claim.  

The FAO then determines whether the claim is effective. If the claim is not effective, the employee may make another claim, as long as it is within the time period applicable. Different time periods apply depending on whether the applicant is a birth parent or an adoptive parent.

Once an effective claim has been lodged, the FAO must determine whether a payment can be made. Again, provisions differ according to whether the applicant is a birth parent or an adoptive parent.

PPL comes in instalments and can be paid by the FAO direct to the employee or via the employer. The payment date relates closely to what would be the employee’s normal pay day.

Employers whose employees meet the NES and the PPL criteria need to register using Centrelink’s Business Online Services portal to be eligible to receive the instalments from the FAO and forward them to the employee. The FAO must issue an employer determination and employers must accept the determination to receive the instalment funding.  

Employers must give employees a record of the paid instalments in a specified form and must maintain records of payment for seven years.

The PPL is complex and a close reading of the relevant regulations is highly recommended. The Australian Government’s guide to the scheme is readily available as an online publication at www.fahcsia.gov.au/sa/families/progserv/paid_parental