Paid Parental Leave Scheme for Employers

The Paid Parental Leave scheme is set up to help you retain valuable and skilled staff by providing financial support for parents while they are off work caring for a newborn or recently adopted child. You will receive funds from the Department of Human Services before you need to provide Parental Leave Pay to your employee. You do this in the way you would normally pay their salary or wages. You have no obligation to pay your employee until the Department of Human Services pays you.

Eligible working parents can get 18 weeks of Parental Leave Pay at the rate of the National Minimum Wage (which has been increased to $606.40 per week from 1 July 2012). Full-time, part-time, casual, seasonal, contract and self-employed workers may be eligible. The employee needs to lodge a claim with the Department of Human Services as the first step and it is their job to assess whether your employee is eligible for Parental Leave Pay.

You are required to provide Parental Leave Pay for an eligible employee who:

• has a child born or adopted on or after 1 July 2011
• has worked for you at least 12 months prior to the expected date of birth or adoption
• will be your employee for their Paid Parental Leave period
• is Australian based, and
• is expected to receive at least 8 weeks of Parental Leave Pay.

Your business must have an Australian Business Number (ABN) to participate in the scheme. If your employee is eligible for Parental Leave Pay but you aren’t required to provide it, the Department of Human Services will pay them directly. However if you would like to be involved and remain connected to your employee while they are away (and your employee agrees), the Department of Human Services will fund you to provide their Parental Leave Pay.

Keep in mind, to be eligible for the scheme, your employee must be on leave or not working from the time they become their child’s primary carer until the end of their Paid Parental Leave period.

Parental Leave Pay is pretty flexible. Your employee can take it at the same time as any type of paid or unpaid leave, but it must be taken in a continuous block of up to 18 weeks. For instance, they could take 4 weeks of annual leave, then 6 weeks of paid maternity leave and then 8 weeks of unpaid parental leave, all while receiving Parental Leave Pay. It can start from the day their child is born or on a later date, however they must receive all of their Parental Leave Pay within 52 weeks of the birth or adoption.

Parental Leave Pay doesn’t change any of your employee’s existing leave entitlements or give them a new entitlement to leave as it’s a payment and not entitlement to leave, thus has no effect on your employee’s leave accrual.

You might already know long-term employees (worked for your business for 12 months or more) are entitled to a minimum 12 months unpaid parental leave under the Fair Work Act 2009. They can also request an additional 12 months unpaid leave on top of this. If you currently provide paid maternity or parental leave through an industrial agreement or law, you need to know you cannot withdraw that entitlement for the life of the agreement or law.

To participate in the Paid Parental Leave scheme, you need to register your business details with the Department of Human Services however this does not need to be done until they contact you.