Paid Parental Leave

Legislation enacting Australia's first national paid parental leave (PPL) scheme passed through Parliament on 17 June 2010. The scheme, which commences on 1 January 2011, will provide eligible working parents who are primary carers with 18 weeks of parental leave pay at the national minimum wage (currently $570 before tax). Primary carers will be eligible if they;

• Have worked continuously with one or more employers for at least 10 of the 13 months before the expected date of birth or adoption;
• Have worked at least 330 hours in those 10 months (which is equivalent to approximately one full day of work each week); and
• Have an adjusted taxable income of $150 000 or less in the financial year prior to the date of birth or adoption of the child.

Although the scheme will be 100% Government funded, employers need to be across the detail as they will be making the actual payments to employees. The employer will receive the payments direct from the Family Assistance Office in advance of them making the payment to the employee through the regular weekly/ fortnightly/ monthly payroll. Although the scheme has a 1 January 2011 start date, the good news is that the employer role of paying PPL will be voluntary until 1 July 2011.

Consequently, you will not need to make changes to your payroll system part way through the financial year. From 1 July 2011 however, you will be responsible for making payments to eligible employees.