Australia: A Paid Parental Leave Scheme For Australia

Last Updated: 11 December 2008
Article by Hedy Cray

Key Point

  • The Productivity Commission's draft report highlights the need for a paid parental leave scheme, focusing on the sharing of parental caring responsibilities, Government-funded paid leave and long-term engagement and attachment to the workforce over the life cycle.

The issue of paid parental leave has reached new levels of prominence as a result of the increasing role of women as simultaneous carers, workers and providers of income, coupled with the changes in men's roles in caring for and rearing children. With this in mind, the Federal Government, in delivering its election commitment asked the Productivity Commission to examine the ways the Government may be able to provide support to parents with newborn children.

According to ABS statistics, 53 percent of female employees and 50 percent of male employees have access to employer-provided paid parental leave. This leaves around half of working females and males without any access to paid leave. Paid maternity leave aims to overcome discrimination against working women by equalising their opportunity of employment and strengthening their attachment to the labour market.

Draft Findings

On 29 September 2008, the Productivity Commission released its draft inquiry report, which made a number of recommendations, the key ones of which include:

  • the establishment of a taxpayer-funded paid parental leave scheme which would provide postnatal leave for a total of 18 weeks at payment of the adult minimum wage for each week of leave subject to normal taxation rates;
  • an additional two weeks of paternity leave reserved for the father or same sex partner;
  • a scheme to be fully taxpayer-funded, but with employers funding capped superannuation entitlements for long-term employees;
  • the sharing of postnatal leave between parents, but not to be used concurrently;
  • the scheme to be available to all employees with "a reasonable degree of attachment" to the labour force and a broad range of family types, including conventional couples, lone parents, adoptive couples and same sex couples.

Why A Paid Parental Leave Scheme?

According to the Productivity Commission the three main driving forces behind a push for a paid parental leave scheme are as follows:

  • to foster the improvement of wellbeing for families, child and maternal health having regard to the effect of an extended period of absence from work around the birth of the child and the financial hardship that may result;
  • to encourage women to maintain their lifetime attachment to the workforce, despite any incentives to do otherwise as provided by the social welfare system;
  • to create a scheme in line with emerging community norms that taking time away from the paid workforce to care for an infant is a normal part of life for both mothers and fathers which should be recognised.

The Commission has also proposed there be certain conditions on eligibility for the scheme, namely, that:

  • it be available only for an employed person who is the parent and primary carer;
  • the employee must have an average of at least ten hours a week with continuous employment for the 12 months prior to the date of expected birth.

The draft report also provides that so long as an employee meets the employment test above, he/she could access the scheme, including part-time, full-time and casual employees; and eligible mothers may transfer paid parental leave rights to fathers or other eligible partners provided they also meet the requirements of the employment test.

Who Pays?

Under the scheme, it is contemplated that businesses would participate as paymasters for the scheme by initially paying their employees' statutory parental leave entitlements, but only:

  • for employees entitled to unpaid parental leave under the National Employment Standards;
  • where there is "an efficient and timely way for Government to fully reimburse that employer" through a credit pay-as-you-go system and by withholding payments to the Australian Tax Office for those employees making at least monthly payments.

All other employees would be paid directly by the Government.

The Commission also proposes that employers provide capped superannuation contributions for long-term employees (having been employed for 12 months or more) for the period of leave taken. This would only be available for employees who are eligible for the benefits before taking leave and entitled to unpaid leave.

It is proposed that the costs of the Scheme would be partially offset by proposed changes to the baby bonus and family tax benefit B. Parents who are ineligible under the Scheme would be entitled to a new "maternity allowance" of $5,000, equal to the current baby bonus, and other support.

What Next?

Sex Discrimination Commissioner Elizabeth Broderick has been reported as saying that a national paid maternity leave scheme should be funded by the Federal Government to ensure women are not discriminated against by employers. Whether or not this will be a viable option is unclear, according to Finance Minister Lindsay Tanner, who has reportedly Stated that the Government will "weigh up its options" but that the decision whether or not to implement the scheme will have be taken in light of budgetary considerations.

The new scheme would cut tax and welfare spending by $307 million and save $607 million in baby bonus payments. The Productivity Commission estimates that the proposal will cost taxpayers around $450 million, and businesses $75 million in net terms. If the scheme is implemented, an important advantage for employers will be an increase in retention rates of female employees for businesses and a deduction in costs for training and recruitment. Moreover, it is suggested that a scheme of paid maternity leave will boost lifetime employment rates for women.

The right to parental leave is one of job security, that is, the right to return to one's job back at the end of the leave the same way that employees return to work after sick leave, annual leave and long service leave. Whether or not the scheme proposed by the Productivity Commission will be implemented remains to be seen, however it is clear that employers should take note of their proposed involvement in the scheme, particularly in relation to employees who have been employed for 12 months or longer.

It is anticipated that the Commission's final report will be provided to the Government in February 2009.

Thanks to Millen Lo and Sophia Gerakios for their help in writing this article.

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)
Related Video
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.