New CTH Bill To Increase Flexibility Of Paid Parental Leave Scheme

Tuesday 11 February 2020 @ 11.47 a.m. | Legal Research

On 6 February 2020, Minister for Population, Cities and Urban Infrastructure, Mr Alan Tudge, (‘the Minister’) introduced the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 (‘the Bill’) to the House of Representatives. On the same day,  the Bill was referred to the Senate Community Affairs Legislation Committee for inquiry and report. The Committee is currently receiving submissions and is due to report on the Bill on 19 March.

Purpose of the Bill

The purpose of the Bill is to implement the Government's 2018-19 MYEFO (Mid-Year Economic and Fiscal Outlook) announcement that they would establish a Women’s Economic Security Package. One of the goals of the package is to "provide eligible primary carers of children who were born or adopted on or after 1 July 2020 with more flexibility over use of and extended access to Parental Leave Pay".

 In the Second Reading Speech, the Minister stated that the Bill is “aimed at better supporting working mothers and families to access their payment more flexibly”.

The proposed changes would allow 30 flexible paid parental leave (PPL) days, which would:

  • provide self-employed women and small-business owners, to choose to take leave during periods or days that suit their business and personal needs
  • enable women to support a part-time return to work and support a child’s transition into childcare; and
  • make entitlement transfers to eligible partners easier.

Additionally, the Minister stated that the proposed scheme is intended to contribute to “changing social norms around sharing care and encouraging men to take parental leave” and expanding on “the important safety net for working families who do not have access to an employer scheme or who only have access to a few weeks of funded leave”. The Minister also stated that, if the Bill’s proposed changes are enforced, the government intends to make complementary amendments to increase the flexibility of the existing unpaid parental leave entitlement.

Outline of the Bill

Currently, the Paid Parental Leave Act 2010 states that an eligible person’s PPL period is 18 weeks and is to be paid in installments at the national minimum wage for each week day during the person’s PPL period by the person’s employer or the Secretary. If the Bill is passed by both Houses and granted assent, the PPL period will be 12 weeks with an identical payment scheme. Furthermore, the Bill proposes 30 available ‘flexible PPL days’ in addition to the 12 week PPL period. Provided a claimant complies with the eligibility criteria, their initial continuous 12 week block can be taken within the first 12 months after the birth or adoption of a child for “a period of recuperation and bonding” while their remaining entitlement of up to six weeks can be taken any time before the child’s second birthday.

The Bill defines a ‘flexible PPL day’ as any day within a child’s ‘flexible PPL period’. The flexible PPL period for a child may start on:

The first day after the PPL period specified in the payability determination of a sole claimant ends or,

  1. if there are 2 or more payability determinations in force for 2 or more claimants, the first day after whichever claimant’s PPL period finishes the latest or,
  2. if neither (1) or (2) applies however an initial eligibility determination is in force for a sole claimant, the first day after the claimant’s expected PPL period or,
  3. if neither (1) or (2) applies however an initial eligibility determination is in force for 2 claimants, the first day after the whichever claimant’s expected PPL period whichever claimant’s PPL period finishes the latest or,
  4. otherwise, the child’s date of birth,

and ends on the day before the child’s second birthday.

The Bill outlines the proposed eligibility conditions for parental leave pay on a flexible PPL day. The criteria depends on the status of the claimant including their residential status, their satisfaction of the work and income test, whether they are the primary carer, whether they are a primary, secondary or tertiary claimant and if they are a newly arrived resident, whether the flexible PPL day falls within their waiting period. A primary carer is not eligible if they perform more than an hour of paid work unless the person is allowed to work in excess of an hour for a permissible purpose.  The Bill also proposes that a person is eligible for parental leave pay if the child is stillborn or has died before the claimed day, provided the person fulfills the residency, work and income requirements and the person would have been the child’s primary carer had the child not been stillborn or died.

The Bill also contains logistical provisions detailing how to determine whether payment is paid in part or in full by the Secretary or the claimant’s employer, specifications in regards to how and when a claim must be made, how the scheme operates within the entire carer leave scheme including paternity, partner and other carer claims as well as transitional, application and saving provisions.

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