Paid Parental Leave - CareforKids.com.au®

Paid Parental Leave
Finally gets its due date

Expectant parents with babies due around the end of December will be crossing their legs and praying their newborns are late in anticipation of the new paid parental leave which is due January 1 2011.

Conceived in Kevin Rudd's 2007 election campaign, it's been the longest gestation in history, but it will finally be delivered (no doubt by forceps) early next year.

Passed on June 17th, the new scheme will provide 18 weeks paid parental leave at the current minimum wage, which will soon be $570 a week and can be shared between mother and father.

To qualify for Labor's scheme, the nominated parent must work at least 330 hours in 10 of the 13 months before the child's birth or adoption, with a maximum two-month break. Their income may not exceed $150,000 a year.

Also, women who need to take time off work because of difficulties during their pregnancy will also be eligible, if they would have otherwise met the work test.

About 150,000 families with babies born or adopted on or after January 1, 2011 are expected to qualify for the scheme that also requires employers to top it up with any program they already have in place.

So what does it mean for parents across the land?

The Paid Parental Leave (PPL) scheme is for new parents who are the primary carers of a child born or adopted on or after 1 January 2011.

An eligible person will receive taxable PPL payments at the level of the Federal Minimum Wage, for a maximum period of 18 weeks – up to around $10,260 in total.

In most cases, the person will receive the payment through their employer, who may also top up the payment according to their own paid parental leave scheme if one exists.

Who is Eligible?

To be eligible for the PPL scheme, the primary carer (usually the mother) must be in paid work and have:

been engaged in work continuously for at least 10 of the 13 months prior to the expected birth or adoption of the child; and
undertaken at least 330 hours of paid work in the 10 month period (an average of around one day of paid work a week).

An income test of $150,000 will apply based on the primary carer's adjusted taxable income in the previous financial year.
PPL will cover employees, including casual workers, as well as contractors and the self-employed. If a primary carer returns to work before they have received all of their PPL entitlement, they may be able to transfer the unused part of their PPL to another caregiver (usually the father) who meets eligibility requirements so the PPL can effectively be shared between mother and father.
Eligible families can choose whether to participate in the scheme depending on their individual circumstances.
Families electing to participate in the scheme will not receive the Baby Bonus (except in multiple birth cases) or Family Tax Benefit Part B during the 18 week PPL period. The dependent spouse, child housekeeper and housekeeper tax offsets also will not be available during this time.

How To Register And How You'll Be Paid

Families must register (with proof of birth or adoption) for PPL within 28 days of birth or adoption and can claim from their specified date (of the birth or adoption).
Employers will pay the PPL to staff in the same way and with the same frequency as they paid their non-leave salary – e.g. weekly or monthly in areas etc based on 7.6 hours of pay at the hourly rate of the National Minimum Wage for each of these days, including public holidays, regardless of your usual working arrangements. Employers are not obliged to pay until they have received funds from Family Assistance, so the first payment may include some back payment.
Those parents being paid by the Family Assistance office (e.g. self employed and casual staff) will be paid fortnightly in arrears at the same rate as above.
New mothers who are not eligible for PPL will continue to receive, if eligible, the current forms of family assistance (including the Baby Bonus). Non eligibility for PPL will generally be if they haven't met the work requirements or received over $150K salary in the previous financial year).

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