Home > Making sense of paid parental leave

Making sense of paid parental leave

article image

What are the current paid parental leave entitlements and how are they likely to change under the Liberal government? By Restaurant & Catering Australia.

Australia has a paid parental leave scheme in operation set up by the previous Labour government. The entitlement to paid parental leave is up to 18 weeks leave paid at the National Minimum Wage of $640.90 per week.

To be eligible to receive paid parental leave an employee must be the primary carer of a new born or adopted child and must have worked for at least 12 months with a company before the birth or adoption of the child. Full-time, part-time, casual, seasonal, contract, and self-employed workers may be eligible for Parental Leave Pay.

Under the Coalition government, the Paid Parental Leave Scheme is set to receive a major overhaul, which would take effect from 1 July, 2015.

The Paid Parental Leave Scheme is designed to complement existing workplace entitlements. It does not provide a new leave entitlement to existing entitlements and does not change current leave entitlements.

Employee’s Parental Leave Pay or Dad and Partner Pay is in addition to the current leave entitlements provided for by the National Employment Standards (NES).

While some components will remain the same, such as eligibility, significant changes are proposed to payments, superannuation and duration of leave.

The Coalition’s Paid Parental Leave would see:

  • Paid Parental Leave extended to 26 weeks
  • Leave paid at the minimum National Wage or based on actual wages, whichever is higher (up to a capped salary level amount of $100,000 per annum, equivalent to a total leave payment of $50,000)
  • Superannuation to be paid on Parental Leave
  • Payment of Parental Leave to be administered by the Commonwealth government (Family Assistance Office), not paid by the employer.

To offset any additional charges of the proposed new scheme, the Coalition’s scheme would be partly funded by a 1.5 percent levy on organisations with a taxable income in excess of $5 million. The Coalition believes that this levy will only affect 0.004 percent of organisations, or out of a possible 750,000 organisations only 3,000 will be liable to pay the new levy.

Small business will not be liable for the new levy, but will be the beneficiaries of this new policy as many larger organisations already offer leave entitlements above the minimum entitlements and the Coalition believes that this will now provide a more level playing field in attracting and retaining female employees.

To assist larger business with the implementation of this new levy, the government will provide a modest tax cut, which should offset the cost of the Paid Parental Leave levy.

Under the proposed Coalition’s Scheme, small business will face less administration burden in meeting legislation obligations, be able to offer parental leave entitlements similar to larger organisation and offer more ongoing and stable working environments for female employees.

The Coalition’s proposed Paid Parental Leave Scheme is yet to be approved by the Senate and more information will be circulated to employers when the final Bill is passed by Parliament.

This article was written by the Workplace Relations Team at Restaurant & Catering Australia. Contact them on 1300 722 878.

Image: www.sbs.com.au

Newsletter sign-up

The latest products and news delivered to your inbox