Australia: Paid Parental Leave Scheme Now Locked In

Last Updated: 22 July 2010
Andrew Tobin, Partner
Damon King, Solicitor

Over the next 12 months, Australian employers will face further changes to the minimum safety net of employment entitlements. The Paid Parental Leave Bill 2010 (Cth) received Royal Assent on 14 July 2010, and introduces a national Paid Parental Leave Scheme, which is scheduled to commence on 1 January 2011.

For the first half of 2011, a six-month grace period will apply. In that period employers will be able to "opt-in" to administer parental leave payments, should they choose to do so.

From 1 July 2011, all employers will be obliged to administer the Scheme for their eligible employees.

Overview of the Paid Parental Leave Scheme

The main features of the Scheme are as follows:

  • Subject to qualifying criteria, full-time, part-time and casual employees will be eligible for parental leave payments.
  • Paid parental leave will be a government funded "entitlement" calculated at the Federal minimum wage rate, adjusted annually. This rate is currently $569.90 per week for a full time employee.
  • Parental leave payments will be payable for up to a maximum of 18 weeks to the primary carer, which may be a combination of maternity and paternity leave.
  • Parental leave payments are payable in only the first year after the birth of a child or, in the case of adoption, on placement of a child.
  • Superannuation contributions will not be included, and employers will not be obliged to pay contributions during the paid parental leave period. However, this arrangement will be reviewed after two years.
  • Eligibility for parental leave payments will be determined solely by the Family Assistance Office.
  • Employers will only be responsible for administering parental leave payments for their employees who, broadly, satisfy the following criteria:
    • Those who are an Australian citizen or permanent resident that live, and will continue to live during the paid parental leave period, in Australia (extending to some New Zealand citizens who hold special category visas).
    • Those who earn less than $150,000 gross per annum and have not already received a "baby bonus" for the child for whom the entitlement is claimed.
    • Those who have, or will have, been employed continuously by their employer for at least 12 months immediately before the expected or actual date of birth of the child.
  • Shorter-term employees may be eligible to receive parental leave payments directly from the Family Assistance Office, provided they have worked at least 10 months over the previous 13 month period.

Your role as an employer

The following administrative process will apply for employers, subject to paid parental leave rules still to be published:

  • A claim for paid parental leave must be lodged by the employee directly with the Family Assistance Office. This may be lodged three months before the expected date of birth. The Family Assistance Office will determine eligibility and issue a determination to the employer, where the claim is approved.
  • An employer must respond and give an acceptance notice to the Family Assistance Office within 14 days, containing:
    • a declaration to the effect that the employer accepts the obligation to pay instalments to the employee;
    • details of the bank account into which parental leave instalments can be paid;
    • pay cycle information; and
    • additional information (yet to be) prescribed by the paid parental leave rules.
  • Paid parental leave funds will then be paid in advance by the Family Assistance Office to the employer either fortnightly or in three equal lump sum payments.
  • Parental leave payments are then paid by the employer to the employee as part of the regular pay cycle. PAYG income tax instalments must be withheld.
  • Where the Family Assistance Office believes that an employer has not complied with its Scheme obligations, it may refer the matter for investigation by the Fair Work Ombudsman.

Existing paid parental leave schemes

In May 2009, the Productivity Commission estimated that approximately 54 percent of women and 50 percent of men in the workforce are already able to access paid parental leave voluntarily offered by their employers under industrial instruments, common law contracts and workplace policies. These schemes typically offer far less than 18 weeks support.

Important rules will apply under the Scheme for existing paid parental leave already offered by employers:

  • Parental leave payments cannot be set-off against existing employer payment obligations that are binding - for example, payments under paid parental leave schemes provided for in enterprise agreements or employment contracts.

    In these cases, employees may be able to "doubledip" and claim simultaneously under both schemes. They will also be entitled to access other forms of paid leave such as annual or long service leave in conjunction with paid parental leave payments.

  • Non-binding obligations to make parental leave payments (under workplace policies that do not form part of the contractual terms of employment) may be varied to take into account an obligation to make parental leave payments under the Scheme.

Depending on their existing industrial arrangements for paid parental leave, employers may be able to incorporate government funding under the Scheme into those arrangements, and offer greater benefits without significant additional expense.

By using the funding from the Scheme to subsidise enhancements to their own paid parental leave schemes, employers might, for example:

  • restructure existing paid parental leave arrangements to provide for top-up pay at, or near, replacement wage levels;
  • agree to make voluntary superannuation contributions on parental leave payments; or
  • increase the duration of existing and superior paid parental leave entitlements by up to 18 weeks, or even longer.

However, in many cases, express agreement with the employee will be required. In other cases, it might be necessary to negotiate a variation of collective bargaining arrangements under the procedures prescribed for that purpose by the Fair Work Act 2009 (Cth).

Implementing the Scheme

Employers should now review their existing paid parental leave arrangements, if any, and consider the changes necessary to appropriately implement the Scheme.

For more information about the operation of the Paid Parental Leave Scheme, or how your business may be able to incorporate the Scheme into your existing paid parental leave arrangements, please contact HopgoodGanim's Industrial and Employment Law team.

© HopgoodGanim Lawyers

Australia's Best Value Professional Services Firm - 2005 and 2006 BRW-St.George Client Choice Awards

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.