The National Employment Standards (‘NES’) provide for an entitlement for a minimum period of up to twelve months paid parental leave. This scheme commenced on 1 January 2011.
To be eligible for the scheme an employee must:-
- Be the primary carer of a child born or adopted after 1 January 2011.
- Have been engaged in work continuously for at least 10 of the 13 months prior to the expected birth or adoption, with no more than an 8 week gap between two consecutive working days.
- Have worked at least 330 hours of paid work in that 10 month period (i.e. an average of 1 day of paid work a week).
- Have an income of $150,000.00 or less in the financial year before the date of birth or adoption.
How is the leave paid?
The Federal Government funds the scheme, although the employer pays eligible employees via the usual payroll cycle. In other words, the employer will pass on the paid paternity leave payments to employees in the same way they would pay wages and the Government reimburses that to the employer.
Amount of payment
Parents who are eligible for paid parental leave under this scheme can receive up to 18 weeks of paid leave. The leave is paid at a fixed rate, irrespective of the income previously received by the parent, and is calculated by reference to the national minimum wage. Currently that figure is $570.00 and it will next be indexed at the end of the current financial year.
Payments are taxable and tax will be deducted from those payments. However employers are not required to make superannuation guarantee payments in relation to paid parental leave payment.
Maguire & McInerney are able to assist in further advising in relation to these matters.