On 1 January this year, Australia’s first national Paid Parental Leave (PPL) scheme came into effect. The Government looked after the initial phase, but from 1 July, it’s up to employers to provide payments to their eligible employees. Don’t panic – the scheme is entirely Government funded. But from the start of the next financial year, the admin and implementation side falls to you.
What’s the incentive? The scheme is designed to help businesses retain their skilled and valuable long-term employees by funding a generous maternity leave and easing the return to work. Read the Q&A below for a quick overview.
Q: What is the Paid Parental Leave scheme?
A: The PPL scheme allows a working parent to take 18 weeks of leave any time in the first year after the birth or adoption of their child. The leave is paid at the minimum wage of $570 per week before tax. It is usually taken by new mothers, but can be transferred to the other parent.
Q: What are the benefits?
A: The scheme endeavours to help new parents stay connected to their work and encourage parents trying to balance work and family responsibilities. From an employer perspective, the scheme provides the necessary support for an employer to offer family friendly working conditions. It could help you retain skilled staff members who might find it easier to return to the workplace after longer, fully-funded leave.
Q: I’m an employer. What do I need to do?
A: From 1 July 2011, you take the responsibility of delivering Government-funded leave pay to your long-term employees. The scheme applies to any new parent who you have employed for 12 months or more prior to the expected birth date, which must be after 1 July 2011.
If you have eligible employees (or might have in the future), you should prepare for the scheme by registering for Centrelink Business Online Services at any time. Once you have registered, it is easy to opt in to provide parental leave pay.
Q: How do I work out if my employees are eligible?
A: The Family Assistance Office will do that for you. Once you have registered, Centrelink will contact you if you are required to provide parental leave pay to your employee.
The employee must be an Australian-based employee entitled to eight weeks or more of parental leave pay. They must be employed for the whole leave period.
You can choose to provide parental leave pay to employees that have worked for you for less than 12 months or who are eligible to receive less than eight weeks of pay, if your employee agrees to that arrangement.
Q: How do I get the funds to organise payments? Do I need to adjust my employee pay cycles?
A: Centrelink will provide you with the required funding before you need to make a payment. You can make the payments in line with your employee’s usual pay cycle and withhold tax as per usual. Remind your employees to lodge their claim for Paid Parental Leave up to three months before their child is born or adopted, to enable on-time payments.
Q: What will this cost me?
A: Employers don’t have to pay superannuation or payroll tax on the leave pay. If administration of the scheme incurs any reasonable costs, these costs will be tax deductible.
For more information, visit www.australia.gov.au/paidparentalleave
