Update: The proposed legislation mentioned in this post did not pass and these laws did not come into place.
Well that took us all a bit by surprise didn’t it? The Fairer Paid Parental Leave Bill is back and it might have more luck getting through the parliament than the last time the Government tried to push it through in 2015.
Since then we have had an election and movement of numbers in both houses of parliament. Personally I don’t think that the Government would try to reintroduce the Bill if it didn’t think it could get it through this time. I’ve read the Bill (I know who does that???) and this is my summary of the important things that you should know if it goes through in its current state. It may still change.
The Bill refers to your employer provided paid leave as ‘primary carer pay’ and I will do the same in this explanation. Paid Parental Leave (PPL) is the 18 weeks of minimum wage provided by the government.
Well that depends. Although the talk in the media last week was that it will come into effect on 1 January 2017, the reality is that the scheme will start at the beginning of the following quarter after the Bill is signed off by the Governor General. So, if that happens before 31 December 2016, the scheme will start 1 January 2017. If it doesn’t get done until, say, next September, then it will take another year to start from now, etc. etc. This is completely useless for those who are trying to plan their finances for the next year.
From the date of introduction of the Bill, there are 12 sitting days of parliament before the end of 2016. Then they don’t come back until February. Can the government get the support of both Houses of Parliament to pass the Bill in 12 sitting days and get it signed by the Governor General? Perhaps?
How will it work?
Your 18 weeks of PPL will be reduced by the number of weeks of primary carer pay you receive from your employer. If your employer pays you 8 weeks of primary carer pay, you will receive 10 weeks of PPL at the minimum wage.
If your weekly amount of primary carer pay is less than the minimum wage, you will receive a top up to reach the minimum wage. The top up will be paid in one lump sum.
You will no longer be able to receive your PPL and primary carer pay at the same time.
Four Weeks (28 day) Backdating Rule
Currently, if you want the start date of your PPL to be the same as the date of birth of your child, you need to have completed your application by submitting a claim and proof of birth within 28 days of the date of birth. Therefore it is backdated by up to 28 days to the date of birth.
If you complete your application after your child is 28 days old, the start date of your PPL cannot be backdated to before your application. This is fine if you don’t intend to work for the next 18 weeks after you start to receive PPL as once you return to work your PPL has to stop.
However, some parents complete their application much later than 28 days and then find themselves having their payments stopped when they either return to work while receiving PPL or they reach the maximum date for which you can receive PPL.
They actually take the time away from work to care for their child but don’t get paid their full PPL entitlement because their application wasn’t completed early enough. Going forward you will be able to backdate your application by 28 days, regardless of when you complete it within the year after birth.
Break during qualifying period
To be eligible for PPL you need to meet the work test which is to work 330 hours in a 10 month period of the 13 months before birth. Within that period you can have a break between days of work of up to 8 weeks. That period will now be extended to 12 weeks which will help those who don’t have consistent employment to still meet the work test.
Some pregnant women have to give up work early in their pregnancy as their job is considered to be unsafe and no other suitable job can be found for them. Their work test date of 330 hours in a 10 month period of the 13 months before birth is therefore generally not met and they don’t receive PPL.
Going forward, your work test will become 330 hours in a 10 month period of the 13 months before the date you had to cease work.
Dad and Partner Pay
When PPL is transferred to the father or partner, they still cannot receive more the 18 weeks in total for Dad and Partner Pay, Primary Carer Pay (the fathers/partners entitlement) and PPL.
Payment will now come from Centrelink – not your employer
Now everyone will be paid from Centrelink unless you and your employer agree for you to be paid by your employer. Small businesses must be so happy for this to happen! I can’t find any mention of how much tax will be taken out by Centrelink or whether it will just continue to be 15%.
So what do I think? The government thinks that by implementing these changes it will save close to $1billion over 4 years. Sure, but businesses offer primary carer leave/paid maternity leave to attract female staff and promote themselves an employer of choice. Now that there is no benefit in that, won’t they just find other ways to attract female staff and the government will still be making payments over 18 weeks to new parents? (Perhaps a cleaner or ready cooked meals for 18 weeks!!)
The positives are that more parents will become eligible for PPL from the changes to hazardous work arrangements and break between work days. Administration will move away from employers which will help small businesses save time.
What does annoy me is that by giving us no real fixed date in the future no one can really plan ahead. Parents can’t plan how much time they can afford to take off work. This then affects their employers’ ability to plan for their return to work and any employee in a position of maternity cover also doesn’t know how long they will be in their job.
I hope this information is useful for you. If you know of someone who may benefit then please share it with them and tell them to sign up to my email list. I’ll keep updating as things progress so they can keep up to date as well.
If you enjoyed the information I have provided and need more help, then the My Family Budget eBook is what you need to help you apply for Parental Leave Pay and Childcare Benefit. I explain everything so that everyone can understand how it works and then step you through the application process. It’s such a complicated process, but I can help with that.
Your Family Budget eBook – Making Sense of Government Parenting and Childcare Payments.
My guide to everything you will ever need to apply for and understand Parental Leave Pay, Dad and Partner Pay, Childcare Benefit & Childcare Rebate. All in one place, with easy explanations.