Australia: Statutory Paid Parental Leave: What does it mean for employers?

Last Updated: 5 July 2011
Article by Charles Power, Paul Hardman, Michael Selinger and Stephen Trew

Most Read Contributor in Australia, September 2016

What is Paid Parental Leave?

The Paid Parental Leave (PPL) scheme, which becomes fully operational on 1 July 2011, entitles primary carers of children born or adopted after 1 January 2011 to receive up to 18 weeks pay at the national minimum wage, less applicable tax. The PPL scheme is not a leave entitlement, but operates alongside the existing parental leave entitlements under the Fair Work Act 2009 (FW Act). The national minimum wage is currently $569.90 per week (before tax), with a new minimum wage of $589.30 per week scheduled to come into operation on 1 July 2011.

The PPL scheme is government funded and currently administered by the Family Assistance Office (FAO) and Centrelink. However, as of 1 July 2011, employers will become responsible for processing PPL payments to certain eligible employees through their payroll systems. If they wish, employers may 'opt in' to paying PPL to eligible employees prior to 1 July 2011, although there is no obligation to do so.

Who is entitled to PPL?

PPL will be available to an employee who is the primary carer of a child born/adopted on or after 1 January 2011, and:

  • is an Australian resident;
  • meets the PPL work test. Generally, employees must have worked at least 10 of the 13 months prior to birth/adoption, totalling at least 330 worked hours, with no more than an 8 week gap between two consecutive working days; and
  • meets the PPL income test – currently, an individual adjusted taxable income of $150,000 or less in the financial year prior to the earlier of the date of birth/adoption or date of PPL claim.

What is the role of employers in the PPL scheme?

Employees can lodge an application for PPL to the FAO up to three months prior to the expected birth or adoption date. The FAO will make a determination as to the employee's eligibility, and inform Centrelink of the outcome. Where the employee has been working for the employer for less than 12 months prior to the expected birth or placement date, and/or the employee is eligible for less than 8 weeks of PPL, the employer will be given the option of administering PPL. Alternatively, the FAO will provide the employee with the payments directly.

However, in all other cases of eligibility (where the child will be born or adopted after 1 July 2011), Centrelink will provide the employer with notice of their obligation to provide PPL. Centrelink will then forward funds to the employer in a manner to be agreed, and the employer will be required to make the PPL payments to the eligible employee.

What are the obligations of employers?

Employers are required to follow ordinary, correct payroll procedures in providing PPL. The amounts are paid in accordance with the employee's usual pay cycle for the duration of the PPL period, withholding Pay As You Go (PAYG) amounts (although no superannuation is payable). Employers should also provide payslips to employees which clearly record PPL payments, and record the movement of all funds received from Centrelink. There are also notification requirements (see Step-by-Step Guide).

Employees can only receive PPL during a continuous period of leave. However, they may attend work on a paid basis for up to 10 days during the PPL leave period in order to 'keep in touch' with the workplace (e.g. to attend training or a conference). These days may affect an employee's unpaid leave entitlements under the FW Act, although an amendment to the Act to resolve this discrepancy is anticipated.

PPL does not affect the obligation of employers to provide parental leave payments pursuant to an industrial instrument or contract of employment, and care should be taken in amending parental leave policies to reduce the amount of parental leave that employees will receive. Potentially, a unilateral amendment to any such right could lead to a breach of contract claim.

Do entitlements accrue during a period of receiving PPL?

The receipt of PPL during a period of leave does not make it 'paid leave' for the purposes of accruing entitlements, such as annual leave. However, entitlements may still accrue where the PPL payments coincide with a qualifying period of leave, such as a period of paid parental leave pursuant to an employment contract or internal parental leave policy.

Recommended Steps for Employers

If they have not already done so, employers should pre-register for the PPL scheme (see Step-by-Step Guide) and use the remainder of the interim period to develop a clear understanding of their obligations and the impact on any existing workplace arrangements.

We further recommend that employers:

  • review their payroll systems, implementing any necessary changes or updates;
  • review their current parental leave policies to ensure compliance with the FW Act, if they have not already done so, and include details of the PPL scheme and the employee's responsibilities;
  • review any additional company paid parental leave and how it will operate in light of the PPL scheme; and
  • consider whether training should be arranged for the relevant payroll or administrative staff.

Please let us know if you require any assistance with the above steps.

Administering PPL: Step-by-Step Guide for Employers

  1. Pre - register for the PPL scheme with Centrelink through Business Online Services ( This should be done as soon as possible;
  2. If you are required to pay PPL to an eligible employee, the business will receive a notification from Centrelink (usually via post);
  3. Provide all requested details to Centrelink to ensure timely receipt of PPL funds. These will include bank account details, the usual pay cycle and pay cut-off details;
  4. You should receive funds from Centrelink in the nominated bank account;
  5. Begin providing PPL to the employee in accordance with their usual pay cycle, withholding PAYG;
  6. Provide a record of PPL provided (e.g. clear and separate notation on payslip);
  7. Keep financial records of receipt and transfer of PPL funds. PPL will also need to be included in the employee's annual or part-year payment summary (for tax purposes);
  8. Notify Centrelink if:

    1. the employee returns to work (before or during PPL period), other than for 'keeping in touch' purposes;
    2. the employee resigns;
    3. any changes are made to the employer's bank account details or pay cycle;
    4. the PPL funds received from Centrelink are incorrect, or the employer is unable to provide PPL to the employee for any reason; or
    5. if the business is being sold, merged with another business, transferred or ceases to trade (notification must be given in advance).
  9. Return any unused funds to Centrelink.

The process has also been summarised in the flowchart below.

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.

Michael Selinger
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.