In August 2013, the Coalition released its Paid Parental Leave
Policy (the Policy).Given the result of the 7
September election, the Policy is expected to become law in July
Under the Policy, mothers will be provided with 26 weeks of paid
parental leave, at their actual wage or the national minimum wage
(whichever is greater), plus superannuation. Any amounts are capped
at a salary level of $150,000.00 per annum, so that a woman who
earns more than $150,000.00 per annum will receive paid parental
leave at the capped level.
Under the existing Labor scheme, eligible employees are entitled
to 18 weeks paid parental leave at the national minimum wage.
Fathers will be eligible for 2 out of the 26 weeks for dedicated
paternity leave at their actual wage or the national minimum wage
(whichever is greater), plus superannuation. This amount is also
subject to the $150,000.00 per annum salary cap. This leave can be
taken concurrently or separately to the mothers' leave.
Further, the Policy will permit the father to be nominated as
the primary care giver. However, where the father is nominated as
the primary carer rather than the mother, the payments will be the
lower of the father's actual wage or the mother's actual
wage, or the national minimum wage (whichever is greater). The
Coalition has indicated that Policy is pegged to the mother's
wage to ensure there is not an incentive to send a mother back to
work early in order to access higher payments based on the
father's wage in recognition that male average earnings are
higher at present than female earnings.
Full-time, part-time, casual, seasonal, contract and
self-employed workers can be eligible for the scheme, subject to
the person having:
worked for at least 10 of the 13 months prior to the birth or
adoption of their child; and
worked for at least 330 hours in that 10 month period with no
more than an 8 week gap between two consecutive working days.
Under the Policy, employees will be paid directly by the
Government's Family Assistance Office, as opposed to the
current Labor scheme which in most circumstances requires employers
to act as pay masters to facilitate payments from Centrelink.
The cost of the scheme is to be funded by a 1.5% levy on
companies with taxable incomes in excess of $5million.
According to the Coalition's Policy Statement, women who
earn the average full-time salary for women (approximately $65,000)
will be more than $21,000.00 better off under the Coalition's
scheme than the Labor scheme because they will receive their actual
wage over 26 weeks (around $32,500.00) instead of the minimum wage
for 18 weeks (around $11,200.00).
The Coalitions scheme is set to commence from 1 July 2015.
Notably, the Policy is silent on the relationship to existing
employer funded paid parental leave entitlements. The current Labor
scheme is paid in addition to any existing employer
We will keep you informed of any developments.
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.
Kemp Strang has received acknowledgements for the quality of
our work in the most recent editions of Chambers & Partners,
Best Lawyers and IFLR1000.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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