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The Paid Parental Leave Scheme – the employer’s role

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Did you know that ALL employers must participate in the Paid Parental Leave scheme?

Most working parents, including full time, part time, self employed, those working in a family business, those working for multiple employers, those who have recently changed jobs, casual, contract and seasonal employees may have access to Parental Leave Pay provided they meet the eligibility criteria.

The Paid Parental Leave scheme is a Federal Government-funded entitlement for working parents who are primary carers of children born or adopted from 1 January 2011. The scheme compliments existing unpaid leave entitlements of 12 months unpaid parental leave for eligible employees, with the right to request a further 12 months of unpaid parental leave.

The Government’s Parental Leave Pay is paid for a maximum of 18 weeks and is a taxable payment paid at the national minimum wage, currently $570 per week before tax.

If an employee has submitted a claim for Paid parental Leave, and is eligible, the employer will be asked to provide their bank account and the employee’s pay cycle details, so that the Parental Leave funds can be transferred to the employer’s account for payment to the employee. From 1 July 2011, this will be compulsory for employers.  Before 1 July, the government will pay direct to the employee if the employer hasn’t registered for the scheme.

To register for the scheme, employers need to go to the Centrelink website at www.centrelinnk.gov.au

Importantly, employers who currently provide paid parental leave through an industrial agreement or other contract cannot withdraw those entitlements for the duration of the agreement, as the Government funded 18 week scheme exists in addition to any current employer provided schemes.

Eligibility

An employee will be eligible if they:

  • Are an Australian resident;
  • Are the mother of a newborn child or the initial primary carer of a recently adopted child;
  • Have met the paid parental Leave ‘work test’ before the birth or adoption occurs; and
  • Have received an individual adjusted taxable income of $150,000 or less in the previous financial year

The ‘work test’ is satisfied if the employee has:

  • Been in paid work continuously for at least 10 of the 13 months prior to the birth or adoption;
  • Worked for at least 330 hours in that 10 month period with no more than an 8-week gap between 2 consecutive working days.

For more information please contact an Attwood Marshall Lawyers today on 1800 621 071.

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