In recent times, there has been a large focus in the media of politician’s commitment to increase paid parental leave. However, with the introduction of the newly proposed Fairer Paid Parental Leave Bill 2015 (‘the Bill’), Australian carers may be faced with quite the opposite outcome.
What are the current entitlements?
The current Paid Parental Leave Act 2010 (‘the PPL Act’) provides that employers who are the primary caregiver of a newborn or adopted child are entitled to receive 18 weeks paid parental leave, paid at the national minimum wage, being $656.90 per week before tax.
Employees are also entitled to any additional paid parental payments provided by their employers. For example, if an employer offers a 12 week paid parental leave benefit at $600.00 per week, then for the first 12 weeks the employee would receive their employers payment of $600.00 per week, together with the Governments paid parental leave amount of $656.90 per week, totalling $1,256.90 per week. After the expiration of the first 12 weeks, the employee would then continue to receive the Governments weekly payment of $656.90 until the expiration of 18 weeks.
What are the proposed changes under the Bill?
The Government has announced that it intends to end the ‘double dipping’ of paid parental leave entitlements with the implementation of the Bill.
If the Bill is passed through Parliament, an Employee will no longer be entitled to receive both paid parental payment from their employer and the Government for children born or adopted on or after 1 July 2016. Payments from the Government will be reduced to make up the difference between any employer payments the employee is receiving and a total weekly payment of $656.90. In other words, employees will only be entitled to receive a total combined payment of a maximum of $656.90 per week for 18 weeks, from both their employer and the Government.
It is important to note however that if an employee is not receiving any paid employer parental leave benefits, that they would still be entitled to claim the full 18 weeks of Government payment, and further any difference between employer payments and the national minimum wage for paid parental leave will be provided by from the Government.
How will the Bill effect Australian carers?
The proposed Bill is estimated to affect 40% of new carers. The initial PPL Act was introduced to supplement employer paid parental leave benefits not replace, existing employer-funded schemes, with section 3A (3) providing that the object of the PPL Act is:
“The financial support provided by this Act is intended to complement and supplement existing entitlements to paid or unpaid leave in connection with the birth or adoption of a child”.
The implementation of the Bill will no doubt force many new carers’ to return back into the workforce earlier than planned due to undue financial stress from the deduction in paid parental leave benefits.