I’m in A LOT of Facebook groups targeted to mums and also mums in business. Lately I’ve noticed an increase in questions relating to receiving your 18 weeks of Paid Parental Leave when you are self employed. Yes, you are definitely entitled to receive Paid Parental Leave if you are self employed.
The tests that you have to pass are exactly the same as if you were an employee but most of the information you read online seems to focus on employees. So here are answers to the most common questions.
1.How do you prove that you have met the Work Test?
The Work Test states that you must complete paid work for 330 hours over 10 months within the 13 month period before your due date/date of birth. This does not mean that your business has to make a profit or any money at all. You just need to have been working towards making a financial gain during this time. Volunteer work does not meet the Work Test.
So how do you show how much you have worked in the unlikely event that Centrelink ask you to prove your hours of work?
• Keep a detailed diary of hours worked. Write it down or use a spreadsheet and actually record each day of work and how many hours you spent working.
• If you bill by the hour, use your invoices to show the services provided
• If your clients book in a time to see you, show your schedule of bookings.
• Use your Tax Return or Financial Statements if your can you relate the amount or sales your business has to the number of hours that it takes to make a sale
2. What can you do in your business while receiving Paid Parental Leave?
You cannot perform paid work while you are receiving Paid Parental Leave. When you are self employed, the definition of paid work is where your purpose is to carry out work to make a profit. The only paid work that is allowed, and you can still get paid during this time, is to perform tasks where you are only overseeing the business, performing administrative tasks or other ad hoc activities to keep your business going.
These can include paying an account, checking the delivery of an order, arranging a repair or dealing with a dispute. Notice these examples are administrative as they don’t create a sale or income, which is how you should think about an activity that you want to perform in your business during this time. There is nothing to stop you employing someone else or even getting your mum to perform the tasks that will earn an income for your business.
3. What about ‘keeping in touch days?’
These don’t apply if you are on Paid Parental Leave when you are self employed. The legislation specifically refers to a keeping in touch day’ for people other than self employed. Also, these 10 days are not designed for employees to be performing their usual paid jobs but to keep up to date with training and meetings to help prepare them for a return to work.
4. Where to start?
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.
Download Making Sense of Paid Parental Leave for $17.
- Get your application completed all online.
- Review the different tests and apply them to your situation.
- Understand how it affects your tax.
- Learn about Dad & Partner Pay details.
- Stops wanting to pull your hair out!