by lisa levison

November 20, 2018

Changes to Paid Parental Leave

**Updated 20 June 2020. 

In November 2018, the minister for women, Kelly O’Dwyer released the government’s ‘Women’s Economic Security Statement’ which includes changes to Paid Parental Leave. There was a significant focus in the Statement on helping victims of domestic violence achieve economic independence through early access to superannuation and increased funding for no interest loans.

The start date for these initiatives will be for babies born after 1 July 2020.

The changes to Paid Parental Leave Scheme are designed to improve the flexibility of the current system, especially for those who are self employed and small business owners.

I regularly discuss with small business owners the problem of keeping their business going while meeting the requirements of the PPL Scheme of not working for 18 weeks. Few small business have that option available to them.

The proposed changes include:

Splitting your Paid Parental Leave into two separate blocks.

Currently you must take the entire 18 weeks of payments in one continuous block. If you need to return to work before your 18 weeks are finished then you lose any remaining PPL. About 2,300 people return to work each year before they have received the full 18 weeks of their payment entitlement and they miss out on the remaining few weeks payments.

The new initiative will mandate the first 12 weeks (60 days total) to be taken within the first year of the child’s life and will be called the Paid Parental Leave Period. The second block of six weeks (30 days total) can now be taken anytime up to your child’s’ second birthday and will be called the ‘Flexible Paid Parental Leave Days.’

All of the rules that currently apply to Paid Parental Leave such as the Work Test and Residency Test will still apply to the first 12 weeks, but now you have the option of returning to work after 12 weeks and not losing the remaining 6 weeks of payments. You still apply for your payments through myGov in the same way as before.

I will keep updating this post as Centrelink announce new information, but if you are expecting your baby after 1 July then apply for Paid Parental Leave as you would have previously and Centrelink will contract you around the 14 September 2020 to ask how you would like to use your Flexible Paid Parental Leave Days.

You can still take the 18 weeks as one continuous block if you choose to. 

 

Changes to the Work Test

The current Work Test requires that you work for 330 hours in 10 months out of the 13 months before your due date. This must be done without a gap of more than 8 weeks between two work days.

The new initiative will allow for greater flexibility in the Work Test with gaps of up to 12 weeks allowed. There will also be the ability to move your Work Test dates forward should you have to stop work earlier in your pregnancy than expected. (This actually began 1 January 2020).

(Note: for babies born 22 March 2020 – 31 March 2021, the Work Test period will be for 20 months instead of 13 months, details here.)

The no interest loan scheme is already available and further information can be found here: https://goodshepherdmicrofinance.org.au/services/no-interest-loan-scheme-nils/

I have created a free checklist that you can download to help you gather the information you will require when you sit down and prepare your application. Enter your details below and the PPL Checklist will be emailed to you.

As always, feel free to ask any questions.

Lisa

Where should you start with applying for Paid Parental Leave? Here with your free checklist:

I have created a free checklist for you to download. It will help you to gather the exact information you will need when you sit down and prepare your application. Enter your details below and the PPL Checklist will be emailed to you.

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    1. Hi Tanya, you can backdate and register an ABN – but you still need to have performed paid work (or paid leave) for 330 hours within 10 months out of the previous 13 months (currently 20 months until 31/3/21) regardless of whether it’s under an ABN or not. Hope that makes sense. Lisa

  1. Hi Lisa,
    I have a question. So my husband is the director of our business and our "wage" goes into a joint account as a lump sum. If I apply for PPL will this be an issue? As his wage will still be going in to that account every week. Or should I just get it to go into a different account to make it less confusing?

    Also my accountant said there was a free spreadsheet Could use from your page to fill in the work test as we do not do payslips for ourselves. Yet I could not find the spreadsheet he spoke of.

    1. HI Rebecca, I don’t think that you need a whole new bank account as it’s really not a big issue. But if you want to, you could differentiate between his ‘wage’ and your PPL if it is paid to you through your business and into the same bank account. As an employee you can choose to have it paid to your employer (your business?) and then it is passed on to you in full as your wage. Or you could just ask Centrelink to pay it to you directly and then have it paid into a personal account? Actually that might make it easier!!

      I dont remember ever having a spreadsheet on my website, but it’s pretty simple. Put your due date at the top of a spreadsheet, then fill down to row 392 the date one day earlier. Then in each date, put in the number of hours that you worked that day (or had paid leave). Then find a block of 295 days within this block of time that adds to over 330 hours and then your will have satisfied the test. If you are due before 31 March 2021 then extend the spreadsheet from 392 days to 600 days.

      Lisa

  2. Hi Lisa,
    I currently working in a government job part time, eligible for ppl and will be taking a year of leave for maternity leave, but starting my own business in which I will only be working one day a month. Currently wouldn’t be earning a wage through that, as business will only be new.
    Can I continue with my new business once a month without effecting my mat leave?
    Thank you
    Kate

    1. Hi Kate,
      To receive your PPL, you cant do any work from the date of birth of your child until the end of your PPL period. The new rules for babies born after 1 July 2020 allow you to reduce your PPL period to 12 weeks (down from 18 weeks) and take the remaining 6 weeks flexibly after you return to work up until your baby is 2.
      When you are self employed, you can perform a few tasks within your business in order to keep it running, mainly administrative tasks, but you cant be actively running the daily operations of the business. Examples given by Centrelink of things you can do in your business while receiving PPL are:
      pay an account, check on the delivery of an order, approve the business accounts, deal with ad hoc disputes, organise a repair, organise replacement staff to manage your absence, maintain a basic level of contact with clients, keep your professional skills up to date
      These may not be relevant if you are starting a business but give you an idea of what you can do to not lose PPL. Otherwise you could wait out the 12 weeks and start your business then.
      Lisa

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