The paid parental leave scheme is a government payment to support the leave taken by working parents of newborn and newly adopted children. Consideration is also available in circumstances of still-birth and infant death.
New Residents Waiting Period
From 1 January 2019 the waiting period for newly arrived residents to receive a range of benefits has been extended. The new waiting periods will apply generally to visas granted on or after 1 January 2019.
Examples of adjusted waiting periods include:
|Benefit||Visa on or after 1 Jan 2019||Before 1 Jan 2019|
|Commonwealth Seniors Health Card||waiting period 4 years||2 years|
|Low Income Health Care Card||4 years||2 years|
|Parenting Payments||4 years||2 years|
|Carer Payments||2 years||2 years|
|Dad and Partner Pay||2 years||no waiting period|
|Parental Leave Pay||2 years||no waiting period|
|Family Tax Benefit Part A||1 year||no waiting period|
|Family Tax Benefit Part B||no waiting period||no waiting period|
Budget News 9 May 2017
Proposed amendments to the Parental Leave Pay scheme set forth in budgets 2013-14 and 2015-16 have been abandoned by the government in the 2017-18 budget announcements.
The government had introduced legislation to parliament which was intended to increase the period for which a person may be paid parental leave from the current 18 weeks to 20 weeks. Schedule 18 of the Bill also removed the employer paymaster role in administering the paid parental leave scheme. The legislation was not passed and the government formally announced in the 2017-18 budget that the proposed changes will not proceed.
Budget 2015 proposals
Budget 2015 announcement: Originally proposed to take effect from 1 July 2016 to remove so-called “double-dipping”, access to the government Parental Leave Pay scheme was to have been denied where an employee has simultaneous access to employer-funded benefits at the same level or more than the government scheme.
This measure had insufficient parliamentary support and was not introduced.
PPL doesn’t affect leave
The government payment has no effect on your leave entitlements; it is simply a payment in support of parental leave. Minimum entitlements to time off, paid or unpaid, are specified in the National Employment Standards, and there may be additional provisions in your employment contract, which can also encompass superannuation and salary sacrifice arrangements.
Key features of the current scheme are:
PPL Basic eligibility
- You must be on leave (paid or unpaid) and not working from the time of becoming the child’s primary carer
- Residence: you must be permanently in Australia as a citizen, PR or holder of special category (New Zealanders) visa, and limited categories of temporary visa
- Income – your adjusted taxable income is below $150,000 in the previous financial year
- Work test – you must have worked for at least 330 hours in 10 of the 13 months before the birth or adoption of your child with no more than an eight-week gap between any two consecutive working days. Full time, part time and casual work is all counted, and there are exceptions for exceptional circumstances. A day you have worked for at least one hour is treated as one working day.
The scheme is for the benefit of the “primary carer” of a newborn or newly adopted child, most often the mother. Generally, the arrangement is for the employer to receive the money from the government and then pay you as they would normally through the payroll.
Adjusted Taxable Income Formula
With effect from 1 January 2017 the government has adjusted the formula for the inclusion of the value of fringe benefits in Adjusted Taxable Income.
The meaning of ‘adjusted fringe benefits total’ is modified so that the gross value rather than adjusted net value (previously 51%) of reportable fringe benefits is used, except for PBIs, hospitals and charities.
‘adjusted fringe benefits total’ is a component of Adjusted Taxable Income
This affects eligibility for:
family tax benefits, stillborn baby payment,child care benefit, Youth Allowance, Abstudy and Isolated Children’s Allowance
parental leave pay and dad and partner pay
low income superannuation contribution payment
net medical expenses offset
dependant (invalid and carer) (DICTO) tax offset
Notional dependent’s offset for the Zone & overseas personnel tax offsets
For details of the amending legislation see Budget Savings (Omnibus) Act 2016 (Schedule 15). The measures took effect from 1 January 2017 for family assistance payments and for income tax tests from 1 July 2017.
The maximum PPL benefit is paid at the rate of the National Minimum Wage. The actual period for which it is paid is based on your leave entitlement, for a maximum of 18 weeks.
Generally, the scheme is for the benefit to be paid to you by your employer, having already been paid by the government. In circumstances where you are not being paid by an employer, the Department of Human Services can pay you directly.
PPL payments are subject to normal PAYG rules and income tax, but not payroll tax, workers compensation insurance or superannuation guarantee contributions.
Baby Bonus and PPL can’t both be claimed; you have to choose. You can choose the benefit with the higher value.
The PPL scheme is administered by the Department of Human Services. Eligibility information and application details are here: Paid Parental Leave.
From 1 January 2013 the Dad and Partner Pay allowance of up to 2 weeks is available. It can be claimed on its own or in addition to the PPL.
The primary carer’s eligibility for Parental Paid Leave is most often claimed by the birth mother, however same sex couples can also benefit by nominating one parent as a primary carer with the second parent getting two weeks of paid leave.
The residence, work test and income conditions are similar (as above), and the payments are taxable income.
You can claim Dad and Partner Pay up to three months before, or within a year after, your child’s birth or adoption.
The public consultation phase of a government review of the Paid Parental Leave scheme closed on 31 May 2013. Details of the review, submissions and discussion papers can be read here.
- Parental Leave Pay (DHS)
- Parental Leave: Sorting Out Fact From Fiction – A Practical Guide to Parental Leave Obligations – www.wolterskluwercentral.com.au
This page was last modified 2019-01-03