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2016
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FAIRER PAID PARENTAL LEAVE BILL 2016
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Social Services, the Hon Christian Porter MP)
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FAIRER PAID PARENTAL LEAVE BILL 2016
OUTLINE
This Bill introduces the revised arrangements for the Paid Parental Leave scheme
announced in the 2015-16 Mid-Year Economic and Fiscal Outlook which replaces
the Fairer Paid Parental Leave Bill 2015, announced in the 2015 Budget. The Bill
also, includes a measure previously introduced in a 2014 Bill.
Fairer paid parental leave
The 2015 Budget measure was previously introduced on 25 June 2015 in the Fairer
Paid Parental Leave Bill 2015. The revised package introduced by this new Bill
responds to community concerns and addresses feedback provided by relevant
stakeholders.
In the revised package, government-funded parental leave pay will be targeted at
individuals who have no employer-provided paid primary carer leave, or whose
employer-provided paid primary carer leave is for a period less than 18 weeks or is
paid at a rate below the full-time National Minimum Wage.
Under the new measure, parents' access to government-funded parental leave pay
will be limited according to the number of weeks of employer-provided paid primary
carer leave they receive, if any. This means that, where a person is entitled to
employer-provided leave of less than 18 weeks, the government scheme will provide
the residual number of weeks of government-funded parental leave pay up to the
maximum period of 18 weeks.
Parental leave pay will continue to be provided to parents who receive
employer-provided paid primary carer leave at a rate lower than the National
Minimum Wage. In these circumstances, the person's employer-provided paid
primary carer leave will be topped up to the National Minimum Wage for a period of
up to 18 weeks.
Minor amendments to the Paid Parental Leave scheme are made, including
providing more flexible backdating provisions so that the four-week backdating rule
will apply to parents who complete their claim process more than four weeks after
the birth of their child.
In addition, the paid parental leave work test will be amended to take into account
the circumstances of pregnant employees who are unable to continue in their job
because the hazardous nature of their employment presents a risk to their
pregnancy and there is no safe job alternative available.
The permissible break in the paid parental leave work test will also be extended to
allow parents to have a gap of up to 12 weeks between two working days and still
meet the paid parental leave work test. This change will enable more working
parents, particularly those in irregular employment, to be eligible for paid parental
leave.
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The new measure will be implemented from the first 1 January, 1 April, 1 July or 1
October after the Bill receives Royal Assent.
Removal of employer paymaster role in administering the Paid Parental Leave
scheme
As with the original Bill, this new Bill includes the measure to remove the
requirement for employers to administer Government-funded parental leave pay to
their eligible long-term employees. This measure was previously introduced on
19 March 2014 in the Paid Parental Leave Amendment Bill 2014, to ease
administrative burdens on business.
Employees will be paid directly by the Department of Human Services, unless an
employer opts in to provide parental leave pay to its employees and an employee
agrees to their employer paying them. The measure will be implemented from the
first 1 January, 1 April, 1 July or 1 October after the Bill receives Royal Assent.
Financial Impact Statement
The financial impact over the forward estimates of the revised measures in this Bill is
an indicative saving of $1,179.9 million based on a 1 January 2017 commencement
date.
REGULATION IMPACT STATEMENT
The regulation impact statement for the removal of the employer paymaster role was
published by the Office of Best Practice Regulation on 9 January 2014.
STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
The statements of compatibility with human rights appear at the end of this
explanatory memorandum.
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FAIRER PAID PARENTAL LEAVE BILL 2016
NOTES ON CLAUSES
Abbreviations used in this explanatory memorandum
Paid Parental Leave Act means the Paid Parental Leave Act 2010
PPL scheme means the Paid Parental Leave scheme
Clause 1 sets out how the new Act is to be cited - that is, as the Fairer Paid
Parental Leave Act 2016.
Clause 2 provides a table setting out the commencement dates of the various
provisions of the new Act.
Clause 3 provides that legislation specified in a Schedule is amended or repealed as
set out in that Schedule.
1
Schedule 1 - Adjustment for paid primary carer pay and other amendments
Schedule 1 - Adjustment for primary carer pay and other amendments
Summary
This Schedule ensures that Government-provided parental leave pay is more fairly
targeted to ensure eligible working parents have access to a base level of financial
support on the birth or adoption of their child. Parents will no longer receive both
employer-provided paid primary carer leave (such as maternity leave pay) and the
full amount of parental leave pay under the Government-provided PPL scheme.
Parents who are entitled to receive employer-provided paid primary carer leave
totalling at least 18 weeks at the National Minimum Wage will not receive any
parental leave pay under the PPL scheme.
Parents who are entitled to receive employer-provided paid primary carer leave
totalling less than 18 weeks, will continue to receive some parental leave pay under
the PPL scheme, but the amount will be reduced by length of the employer-provided
paid primary carer leave they receive. However, where parents' employer-provided
paid primary carer leave payments (other than lump sum payments) are paid at a
rate below National Minimum Wage, a Government-provided parental leave pay
supplement will be paid valued at the difference between their primary carer pay and
the rate of the National Minimum Wage.
These changes will commence from the first 1 January, 1 April, 1 July or 1 October
after the Bill receives Royal Assent.
Background
Currently under the Paid Parental Leave Act, the PPL scheme provides working
parents and adoptive parents, with access to up to 18 weeks parental leave pay at
the National Minimum Wage, while they stay at home to look after their baby or
adopted child.
Payments under the current PPL scheme are made irrespective of whether an
individual receives employer-provided paid primary carer leave and regardless of the
amount of such payments.
Parental leave pay, under the PPL scheme, is paid over an 18-week period at the
National Minimum Wage.
Parents who lodge a claim before the birth of a child, or a child entering their care,
currently receive an initial eligibility determination stating whether they will be eligible
for parental leave pay. Under these amendments, a person must inform the
Secretary (or delegate) of any primary carer pay they are entitled to from their
employer. The PPL period of a person is then proportionately reduced by the length
of the paid primary carer leave period they are entitled to from their employer. If a
person receives 18 weeks or more paid primary carer leave that is valued at equal to
or more than the National Minimum Wage, the person will not be entitled to receive
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
parental leave pay from the Government. If the person's paid primary carer leave is
paid at a rate less than the National Minimum Wage, the person will be entitled to a
lump sum supplement of paid parental leave representing the difference between
their paid leave (up to 18 weeks) and the National Minimum Wage for that period.
The purpose of these changes is to provide fairer parental leave pay by creating a
base level of paid parental leave entitlement for all eligible working parents.
Primary claimants will no longer be able to access parental leave pay at the same
time as they are taking employer-provided paid primary carer leave. This change is
consistent with the above change, to better target the Paid Parental Leave scheme
and ensure working parents have access to at least 18 weeks of paid time off work
to care for their child.
Provision is made for a primary claimant to nominate a start day 28 days before the
day they make their claim for parental leave pay or verify their child's birth, to provide
greater flexibility for parents to make their claim after the birth of their child but
without delaying their receipt of parental leave pay.
This Schedule will commence on the first 1 January, 1 April, 1 July or 1 October after
the Bill receives Royal Assent.
Explanation of the changes
Part 1 - Amendments
Amendments to the Paid Parental Leave Act
Items 1 and 2 amend section 4, which sets out the Guide to the Act. The second
and third paragraphs under the heading Overview are omitted and replaced with
three new paragraphs to state that parental leave pay is paid to a person for a
particular period, or as a lump sum supplement. Where parental leave pay is for a
period, that period is called the PPL period. The full PPL period is 18 weeks.
However, a person may not be eligible for the full 18 weeks if they are not eligible for
the entire period or they receive primary carer pay from their employer.
Parental leave pay may be paid as a lump sum supplement because the person
received employer-provided primary carer pay for up to 18 weeks at less than the
National Minimum Wage.
Parental leave pay is paid in instalments, at the National Minimum Wage for each
week during a person's PPL period or, in the case of a lump sum supplement,
one instalment. Payment can be made either by the Secretary or the person's
employer.
The last paragraph under the heading Chapter 2 - When parental leave pay is
payable to a person is omitted and replaced with a paragraph stating that there are
three types of claims: a primary claim, a secondary claim and a tertiary claim.
The claims relate to one another. However, a secondary and tertiary claim cannot
be made without a primary claim. Often, only a primary claim is made.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 3 amends section 6 by inserting a signpost to the definition of adjustment for
paid PC leave at section 11J inserted by item 17 below.
Item 4 amends section 6 by repealing the definition of initial eligibility
determination and replacing it with a signpost to the definition of initial eligibility
determination at section 115BL, which relates to dad and partner pay.
Item 5 amends section 6 to amend the definition of maximum PPL period end day.
This is a technical amendment to signpost the definition of maximum PPL period
end day at section 11B, inserted by item 17 below.
Item 6 amends section 6 to amend the definition of maximum PPL period start
day. This is a technical amendment to signpost the definition of maximum PPL
period start day at section 11A, inserted by item 17 below.
Item 7 amends section 6 to include a signpost to the definitions of maximum
supplement period and supplement period at section 11H, inserted by item 17
below, paid PC leave, paid PC leave period, PC pay, and primary carer pay at
section 11F, inserted by item 17 below, paid PC leave reduction number at
section 11D, inserted by item 17 below, PC leave and primary carer leave at
section 11E, inserted by item 17 below, provisional entitlement determination at
section 26 and parental leave pay supplement at section 11G, inserted by item 17
below.
Item 8 amends section 7, which is the Guide to Part 2-1 of the Act, to specify that
parental leave pay can be paid under the Act as a lump sum supplement as well as
for a particular period. It also specifies that a person's PPL period may be for a
lesser period than 18 weeks, not only in cases where the person is not eligible for
the full 18-week period, but also in cases where the person is entitled to primary
carer pay in respect of the child.
Items 9, 10, 11, 12 and 13 are minor amendments to sections 8, 9 and 10 to delete
the following phrases: 'for a period' at sections 9 and 10, 'or that period' at section 8
and 'during the period' at section 9. These amendments reflect the fact parental
leave pay may not necessarily be payable for a period if it is paid as a lump sum
supplement.
Items 14 and 15 are minor amendments to subsections 11(1) and (3) respectively to
include the respective headings PPL period and Maximum PPL period.
Item 16 repeals subsections 11(4) and 11(5) because new sections 11A and 11B,
inserted by item 17 below, will give the meanings of maximum PPL period start
day and maximum PPL period end day.
Item 17 inserts new sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H and 11J.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
New section 11A - The maximum PPL period start day for a child
New section 11A defines the maximum PPL period start day for a child.
Subsection 11A(1) provides that the maximum PPL start day for a child is the latest
of: the day the child was born; the nominated start date; where a primary claimant
has a paid primary carer leave period and the nominated start date is during that
period, the first day after the end of that period; 28 days before the primary claimant
made an effective claim for parental leave pay for the child; or 28 days before the
day on which the primary claimant verified the child's birth. This new definition has
the effect of allowing a claimant to backdate their PPL period start day by 28 days
before the date of an effective claim or verification of the child's birth and prevents a
primary claimant's PPL period commencing during a period of paid primary carer
leave for the child.
The more generous backdating provisions will provide more parents with the
flexibility to backdate their claim to a date before they lodged their claim. Currently,
a person can only backdate a claim if they fulfil all claim requirements within 28 days
of birth. If a person lodged a claim after this time, currently they cannot backdate
their claim, and, if the person has already returned to work, they will be ineligible for
parental leave pay, despite potentially having had a period off work after the birth.
The new provision addresses this issue.
Subsections 11A(2) and (3) provide that the Secretary can make a determination,
specifying an earlier start day if satisfied that there are exceptional circumstances for
doing so, but cannot specify a day before the child's date of birth.
New section 11B - The maximum PPL period end day for a child
New section 11B gives the meaning of maximum PPL period end day.
Subsection 11B(1) defines the maximum PPL period end day as the earlier of the
day that is 125 days after the maximum PPL period start day (which is 18 weeks
from and including that start day), or the day before the child's first birthday.
Subsection 11B(2) provides that, where the primary claimant has a paid primary
carer leave reduction number, the maximum PPL period end day is in accordance
with paragraph 11B(2)(a) the earlier day resulting from the reduction in the number
of PC leave days in section 11D, that is the adjustment for paid PC leave worked out
in accordance with section 11J.
This provision has the effect of substituting an earlier maximum PPL period end day,
calculated with reference to the number of week days in the paid PC leave period the
person is entitled to. The number of weekdays in the person's paid PC leave period
(worked out under section 11D) is subtracted from the maximum PPL period.
Example:
Jo is entitled to eight weeks of paid primary carer leave at $1,000 per week.
Jo's baby is born on 11 July 2017.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Jo started her paid primary carer leave on 27 June 2017, and ends her paid
primary carer leave on 21 August 2017. Jo's paid PC reduction number is
40 week days (calculated in accordance with section 11D).
Jo's maximum PPL period start day is her nominated start date of
22 August 2017.
Jo's maximum PPL period end day is the 126th calendar day of the PPL
period (this is the number of calendar days in an 18 week period), reduced by
40 week days (determined in accordance with section 11J), which is the 50th
week day in the PPL period which is 28 October 2017.
If the person's maximum PPL period start day is before the first day of a person's
paid primary carer leave, paragraph 11B(2)(b) applies. This provision provides that
the maximum PPL period end day is the earlier of the day before the first day of the
paid primary carer leave period or the day determined by paragraph 11B(2)(a).
This provision has the effect that, where a person elects to commence their PPL
period prior to taking their employer-provided paid primary carer leave, their PPL
period will end prior to the commencement of their paid primary carer leave. This
provision and new section 11A, inserted by item 17, have the effect that a primary
claimant cannot receive Government-funded parental leave pay and employer
provided primary carer pay at the same time.
Example:
Emma is entitled to six weeks of paid primary carer leave at $1,000 per week.
Emma's baby is born on 4 July 2017.
Emma plans to start her paid primary carer leave on 1 August 2017, and end
her paid primary carer leave on 11 September 2017.
Emma's maximum PPL period start day is her nominated start date of
4 July 2017, before she starts her paid primary carer leave.
Emma's maximum PPL period end day is the day before the first day of the
paid primary carer leave period, which is 31 July 2017.
Subsection 11B(3) provides that the Secretary has a discretion to make a
determination under subsection 11B(4) that a different day is the person's maximum
PPL period end day in respect of claim made by a secondary claimant.
Subsection 11B(4) provides that the day determined by the Secretary must be later
than a day determined under paragraph 11B(2)(b), and not later than a day worked
out under paragraph 11B(2)(a). The effect of this is that the Secretary can determine
that a secondary claimant will have a later maximum PPL period end day where their
maximum PPL period is shortened by a period of paid primary carer pay of the
primary claimant. However, the determination of a later day cannot result in the
secondary claimant having a maximum PPL period of more than 125 days
(18 weeks) minus any adjustment calculated in accordance with new section 11J.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
New section 11C - No PPL period etc. if excessive paid PC leave reduction number
Section 11C provides that, where the primary claimant has a paid PC leave
reduction number that is equal to or exceeds the number of week days in the
maximum PPL period, there is no PPL period.
New section 11D - Paid PC leave reduction number for a child
Subsection 11D(1) provides that a primary claimant will have a paid PC leave
reduction number if they have a paid primary carer leave period.
Subsection 11D(2) calculates the paid PC leave reduction number. First,
the number of days in the paid PC leave period is divided by seven. Then, if the
result is not a whole number and is greater than one, round it down to the nearest
whole number. If the result is not a whole number and is between one and zero,
round it up to one. Next, multiply the result by five.
The purpose of the new section 11D is determine the number of week days in the
person's PC leave period, to the nearest week, by which their maximum PPL period
will be reduced.
Example:
Jo is entitled to eight weeks of paid primary carer leave.
Jo started her paid primary carer leave on 27 June 2017, and ends her paid
primary carer leave on 21 August 2017. The number of calendar days in this
period is 56.
Fifty-six divided by seven equals eight (paragraph 11D(2)(a)).
Eight multiplied by five equals 40 (paragraph 11D(2)(c)).
Jo's paid PC leave reduction number is 40 weekdays.
Example:
Angela is entitled to four days of paid primary carer leave.
Four divided by seven equals 0.57 (paragraph 11D(2)(a)).
As 0.57 is not a whole number and is between one and zero, it is rounded up
to one (subparagraph 11D(2)(b)(ii)).
One multiplied by five equals five (paragraph 11D(2)(c)).
Angela's paid PC leave reduction is five weekdays.
Example:
Leesa is entitled to 26 days (3.7 weeks) of paid primary carer leave.
Twenty-six divided by seven equals 3.7.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
As 3.7 is not a whole number and is greater than one, it is rounded down to
three (subparagraph 11D(2)(b)(i)).
Three multiplied by five equals 15.
Leesa's paid PC reduction is 15 weekdays.
New section 11E - Primary carer leave (or PC leave)
Subsection 11E(1) defines primary carer leave (or PC leave) as leave an employee
is entitled to take under the terms and conditions of their employment:
because the employee is expecting to give birth to a child; or
to allow the employee to be the primary carer for a child who has not turned
one; or
to allow the employee to be the primary carer for a child who has been
entrusted to the care of the employee within the last 12 months as part of a
process for the adoption of the child; or
to allow the employee to care for an adopted child; or
where the employee would have been entitled to such leave but for the fact
the child is stillborn or died.
This is intended to include any enforceable entitlement that is part of the employee's
terms or conditions of employment, including entitlements that arise in an enterprise
agreement, modern award or workplace policy (incorporated by reference or
impliedly in a contract of employment), entitlements that are implied by action,
and entitlements from other sources.
Subsection 11E(2) provides that primary carer leave does not include personal or
carer's leave, annual leave, long service leave or bereavement leave, or leave
purchased by the employee in accordance with the terms and conditions of their
employment. It also does not include leave where the main purpose is to support the
primary carer of the child and not to provide care directly for the child itself;
or develop initial bonds with a child, such as a newborn or newly-adopted child (such
as some forms of paternity leave).
To avoid doubt, subsection 11E(3) makes it clear that paragraph 11E(2)(c) does not
apply to leave the main purpose of which is to allow an employee to be the primary
carer for a child.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
New section 11F - Primary carer pay, paid PC leave and paid PC leave period for
a child
Subsection 11F(1) defines primary carer pay (or PC pay) as an amount that a
person is entitled to be paid by their employer under the terms and conditions of their
employment whilst on primary carer leave as defined by new section 11E. Where a
person receives primary carer pay during primary carer leave, that leave is defined
as paid PC leave. The paid PC leave period for a child is defined as the length of
the paid PC leave, rounded down so that any part of that period that does not
represent a whole day of the employer's entitlement to PC leave is not included.
This is not intended to affect employees whose entitlement to PC leave is based on
part-time working arrangements.
Subsection 11F(2) provides that subsection 11F(1) is subject to subsections 11F(3)
to (11).
Subsection 11F(3) provides that the PPL rules may prescribe classes of payment
provided by an employer that are or are not to be taken to be primary carer pay.
Subsection 11F(4) and 11F(5) apply where, under the terms and conditions of a
person's employment, the amount of primary carer pay they receive is calculated
based on the amount of Government-funded parental leave pay they receive.
The effect of the provisions is that it is deemed that the person will receive an
amount of primary carer pay that is calculated on the basis of them receiving
Government-funded parental leave pay that is not adjusted for the purpose of
primary carer pay.
Subsection 11F(4) provides that subsection 11F(5) applies where the amount of an
employee's primary carer pay is calculated based on the amount of
Government-funded parental leave pay they receive. Subsection 11F(5) provides
that the amount of primary carer pay received for each day of this type is treated as
the amount that it would be disregarding subsection 11B(3), inserted by item 17.
Example:
Linda is entitled to 18 weeks of paid primary carer leave, paid at the difference
between the amount of Government-provided parental leave pay she receives
and her usual salary.
Linda's usual salary is $1,000 per week - that is, $200 per day (assuming a
five day work week).
Linda's PPL entitlement, disregarding any adjustment for paid primary carer
leave, is 18 weeks (90 week days) at $131.40 per day.
Subsection 11F(7) treats Linda's employer's contribution as Linda's primary
carer pay. That is, $200 minus $131.40, which results in $68.60 per day
being Linda's primary carer pay.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
A note alerts the reader to a transitional provision which maintains current
arrangements for such cases where the child is born or entrusted to the care of a
person during the 3-year period starting on the commencement of this section. This
will allow time for parents with such arrangements to renegotiate the arrangements
prior to the deeming effect applying.
Subsections 11F(6) provides that subsection 11F(7) applies where a person is on
primary carer leave and that period contains one or more days where primary carer
pay is not payable to them by their employer, and where the employee ordinarily
works on that day or days and would otherwise have been entitled to pay, but for the
period of primary carer leave, if they had worked.
Subsection 11F(7) provides that, in the circumstances prescribed by
subsection 11F(6), the paid primary carer leave period for a child is the shortest
period that starts on the first day of the paid primary carer leave and contains the
number of week days that primary carer pay is payable.
The effect of this is that, where a person's paid primary carer leave is not taken in a
continuous period, only the paid leave periods are considered for the purpose of
calculating their entitlement to paid parental leave.
Subsection 11F(8) provides that, if primary carer pay for a child is payable as a lump
sum, but the amount of that lump sum does not depend on the length of leave taken,
then the paid primary carer leave period will be taken to contain the number of week
days equal to that lump sum divided by the daily National Minimum Wage amount
applicable for the first day of that paid primary carer leave.
Example:
Mary is entitled to a lump sum payment from her employer, valued at $7,000,
paid to her because she is expecting a child.
Mary's child is born on 11 July 2017.
Mary's primary carer pay entitlement has a paid primary carer leave period
that starts on 11 July 2017 and ends on 2 October 2017, containing 60 week
days.
That is, $7,000 divided by $116 (assumed to be the daily National Minimum
Wage rate in application on 11 July 2017 for the purpose of this example
only), which is 60.3448 days, rounded down to 60 week days.
Subsection 11F(9) provides that subsection 11F(10) applies when a person chooses
to take their PC leave entitlement at a lower percentage over a longer period (such
as half pay). Subsection 11F(10) provides that, in the circumstances prescribed at
subsection 11F(9), the paid PC leave period is the period the person would be
entitled to at full pay.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Example:
Angela is entitled to a 12-week paid PC leave entitlement at her full wage.
Angela elects to take this entitlement at half pay, therefore receiving
50 per cent of her usual wage over a 24-week period. Angela's PC leave
period is 12 weeks.
Subsection 11F(11) provides that, where a person has more than one entitlement to
primary carer leave, the PPL rules may specify: how to determine the amount of
primary carer pay; the paid primary carer leave; and the paid primary carer pay
period.
Specifying how to treat people who have multiple primary carer leave entitlements in
the PPL rules will provide the flexibility necessary to deal with these unusual and
varying circumstances as they become known.
New section 11G - Parental leave pay supplement for a child
Paragraph 11G(1)(a) provides that a person is entitled to parental leave pay
supplement if the person has a supplement period for the child.
Paragraph 11G(1)(b) provides that, if a person has returned to work, the claim for the
parental leave pay supplement must be made within 28 days of returning to work.
Subsection 11G(2) provides that the amount of a person's parental leave pay
supplement for a paid PC leave period is the amount by which the person's primary
carer pay during the supplement period falls short of the National Minimum Wage for
the supplement period. This is calculated by multiplying the daily National Minimum
Wage on the last day of the period with the number of week days in the supplement
period. The amount of primary carer pay the person received in the supplement
period is subtracted from the National Minimum Wage. The shortfall will be the
amount of parental leave supplement the person receives.
Example
Michelle is entitled to 6 weeks of paid primary carer leave at $400 per week.
Michelle's paid primary carer leave is between 4 July 2017 and 14 August
2017.
Michelle's child was born on 15 July 2017.
Michelle's maximum supplement period starts on first day of her paid primary
carer leave and ends 30 week days later on 12 August 2017 (worked out
under section 11H).
The amount of Michelle's paid primary carer pay for a day is $80 ($400
divided by 5).
$116 minus $80 ($116 is assumed to be the daily National Minimum Wage
rate applying on 15 July 2017 for the purpose of this example only), is $36.
$36 is the daily PC pay shortfall entitlement.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Subsection 11G(4) provides that, for the purpose of the Paid Parental Leave Act and
any other law of the Commonwealth, parental leave pay supplement is treated as
parental leave pay, and any parental leave pay supplement that is payable is an
instalment of parental leave pay.
Paragraph 11G(5) is a technical amendment to clarify that any reference to paid
parental leave in Division 2 of Part 2 of the Paid Parental Leave Act also includes a
reference to parental leave pay supplement.
Paragraph 11G(6) provides that subsection 11G(4) does not apply to section 11 of
the Paid Parental Leave Act.
New section 11H - Supplement period and maximum supplement period for a
child
Subsection 11H(1) defines the supplement period as the period specified in a
determination under: section 13 in accordance with subsection 13(3B); or section
14 in accordance with subsection 14(3B) or 14(6D); or section 15 in accordance with
subsection 15(1B) or 15(5D); or section 16 in accordance with subsection 16(4D).
Subsection 11H(2) provides that the supplement period must be the same as or
within the maximum supplement period for the child.
Subsection 11H(3) provides that the maximum supplement period is the shortest
period that starts on the first day of the person's paid primary carer leave and: for a
primary claimant, contains the number of week days in their adjustment for paid
primary carer pay determined by subsection 11J(1); and, for a secondary claimant,
contains the number of week days determined by subsection 11J(2).
Example:
Rebecca is entitled to four weeks of primary carer pay at $700 per week.
Rebecca starts her paid primary carer leave period on 4 July 2017 and
finishes on 31 July 2017.
Rebecca's child was born on 15 July 2017.
Rebecca's nominated PPL start date is 1 August 2017.
There are 70 weekdays in Rebecca's maximum PPL period (worked out under
subsection 11B(2)).
There are 90 weekdays in Rebecca's maximum PPL period for her child.
90 days minus 70 days is 20 days. 20 days is Rebecca's maximum
supplement period.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Subsection 11H(4) provides that a person does not have a maximum supplement
period for a child if the person's paid primary carer leave for the child is payable
wholly as a lump sum. This subsection has the effect that the person does not have
a supplement period for the child.
Where parents' employer-provided paid primary carer leave is paid wholly as a lump
sum, there will be no Government-provided parental leave pay supplement payable.
The primary carer leave payments will be calculated as a daily amount at a rate
approximating that of the national minimum wage, and if that amount is less than an
18 week period, the parent will receive parental leave pay at the national minimum
wage rate for the remaining days or weeks of the period
New section 11J - Adjustment for paid PC leave for a child
Subsection 11J(1) provides that the adjustment for paid primary carer leave for a
primary claimant is the number of week days calculated by subtracting the number of
week days in a person's maximum PPL period (adjusted to take into account a
person's paid PC leave) from the number of week days in a person's maximum PPL
period for the child calculated in accordance with subsection 11B(1) (which has not
been adjusted to take into account a person's paid PC leave).
Subsection 11J(2) and 11J(3) provide for the calculation of the number of week days
in the adjustment for paid primary carer leave for a secondary claimant. That
number is determined by calculating the number of week days that would be
determined under subsection 11J(1) as if the secondary claimant were the primary
claimant. However, subsection 11J(3) provides that there is a cap of 90 minus the
number of week days in the primary claimant's supplement period, minus the
number of week days in the primary claimant's PPL period. If the number worked
out under subsection 11J(1) exceeds the cap, then the number of week days in the
secondary claimant's maximum supplement period will be set at the cap.
This is to ensure that the PPL period for the primary claimant and maximum
supplement periods for the primary claimant and the secondary claimant do not
exceed 90 week days (or 18 weeks) when combined.
Example:
Mim is entitled to eight weeks of paid primary carer leave at $600 per week.
Mim's maximum supplement period under subsection 11J(1) contains
40 week days - that is, 90 week days (the unadjusted maximum PPL period)
minus 50 week days (the adjusted maximum PPL period after applying
paragraph 11B(2)(a)).
Mim is transferring her whole PPL entitlement to her husband Todd,
a secondary claimant.
Todd is entitled to 12 weeks of paid primary carer leave at $400 per week.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Under subsection 11J(2), the number of week days in Todd's maximum
supplement period is the number of week days that would be worked out
under subsection 11J(1) if Todd were the primary claimant.
The number of week days under paragraph 11J(1)(a), worked out
by applying paragraph 11B(2)(a) on the assumption that Todd is the primary
claimant, is 30 days. That result is achieved by subtracting 60 days
(the number of week days in Todd's 12 week paid primary carer leave
entitlement) from 90 days (the number of week days in the 18-week
unadjusted maximum PPL period).
The number of week days in paragraph 11J(1)(b) is the maximum PPL period
calculated by subsection 11B(1) - that is, 90 days.
Therefore, the result of subsection 11J(1) is 90 days minus 30 days, which is
60 days.
Subsection 11J(2) further provides that, if this result of section 11J(1),
as worked out for Todd, exceeds 50 days (that is, the result of 90 week days
minus the number of week days in Mim's maximum supplement period, which
is 40 days), then reduce the number of week days in Todd's maximum
supplement period by the difference.
Therefore, as the difference between 60 days and 50 days is 10 days, Todd's
maximum supplement period is reduced from 60 days, to 50 days.
Subsection 11J(4) provides for the calculation of the maximum supplement period
where section 11C applies and there is no PPL period. Paragraph 11J(4)(a)
disregards subsection 11C(2) (that there is no PPL period). Instead, under
paragraph 11J(4)(b), it is assumed that the number of week days in the maximum
PPL period for the child is zero. This has the effect that, where a person has no PPL
period as their paid PC leave period is 18 weeks or longer, but the person's PC pay
is less than the National Minimum Wage, the person will still have a top-up PPL
period calculated in accordance with section 11G.
Example:
Jill is entitled to 20 weeks of paid primary carer leave at $300 per week.
Jill starts her paid primary carer leave period on 4 July 2017 and finishes on
20 November 2017.
Jill's child was born on 15 July 2017 and her nominated PPL start date is
1 August 2017.
As Jill has 100 week days in her primary carer leave period, which exceeds
the 90 week days in the maximum PPL period end day prescribed at
subsection 11B(1), section 11C applies, as Jill has a maximum adjustment for
paid primary carer leave and therefore no PPL period.
To work out Jill's maximum supplement period, subsection 11J(4) provides
that subsection 11J(1) should be worked out as if the number of week days in
the maximum PPL period for the child is zero.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Therefore, subsection 11J(1) takes the maximum PPL period for the child
(worked out according to subsection 11B(1), which is 90 week days
(18 weeks), and subtracts zero days from it, resulting in a maximum
supplement period of 90 week days.
Example:
Jo is entitled to eight weeks of paid primary carer leave at $1,000 per week.
Jo's baby is born on 11 July 2017.
Jo started her paid primary carer leave on 27 June 2017, and ends her paid
primary carer leave on 21 August 2017.
Jo's maximum PPL period start day is her nominated start date of
22 August 2017.
Jo's adjustment for primary carer pay is the number of week days in the paid
primary carer leave period. The number of weekdays between 27 June 2017
and 19 August 2017 is 40.
Jo's maximum PPL period end day (worked out under paragraph 11B(1)(a))
is the 126th calendar day of the PPL period, reduced by 40 weeks days,
which is the 50th week day in the PPL period, which is 28 October 2017.
Item 18 amends section 12, which sets out a Guide to Part 2-2, by repealing the
paragraph relating to Division 5 and substituting a new paragraph relating to
provisional entitlement determinations. Those determinations can be made by the
Secretary before a payability determination if the person satisfies or will satisfy
certain requirements for a payability determination.
Item 19 repeals and substitutes subsections 13(2) and 13(3), regarding
determinations on a claim made by a primary claimant for parental leave pay.
Paragraph 13(2)(a) provides that the Secretary must determine that parental leave
pay is payable where the primary claimant has a PPL period and the primary
claimant meets the eligibility criteria from the day the child is born until the last day of
their PPL period.
Paragraph 13(2)(b) provides that the Secretary must determine that parental leave
pay is payable where the primary claimant has a supplement period and the primary
claimant meets the eligibility criteria from the day the child is born until the last day of
the supplement period.
Subsection 13(3), requires the Secretary to state in a determination for parental
leave pay that the primary claimant's PPL period starts on the child's maximum PPL
period start day and ends on the day worked out under subsection 13(3A).
Subsection 13(3A) provides that the Secretary must be satisfied that the primary
claimant is or will be eligible for parental leave pay on each day in the PPL period
that starts on the child's maximum PPL period start day and ends on a day in that
maximum PPL period. If the primary claimant is or will be eligible for every day in
the maximum PPL period, then the end day is the last day of that period.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Subsection 13(3B) requires the Secretary to state in a determination for parental
leave pay that a primary claimant's supplement period starts on the first day of the
maximum supplement period for the child and ends on the day worked out under
subsection 13(3C).
Subsection 13(3C) provides that the Secretary must be satisfied that the primary
claimant is or will be eligible on each day in the supplement period. The first day in
the supplement period is either: where the first day of the maximum supplement
period is before the birth of the child, the day the child was born; or otherwise the
first day in the maximum supplement period. The last day in the period is a day in
the maximum supplement period. If the primary claimant is or will be eligible for
every day in the maximum supplement period, then the end day is the last day of
that period.
Item 20 repeals and substitutes subsections 14(2) and 14(3), regarding
determinations on claims made at the same time by primary and secondary
claimants, where both claimants are sharing parental leave pay. Paragraph 14(2)(a)
provides that the Secretary must determine that parental leave pay is payable where
the primary claimant has a PPL period and the primary claimant meets the eligibility
criteria from the day the child is born until the last day of their PPL period.
Paragraph 14(2)(b) provides that the Secretary must determine that parental leave
pay is payable where the primary claimant has a supplement period and the primary
claimant meets the eligibility criteria from the day the child is born until the last day of
the supplement period.
Subsection 14(3), requires the Secretary to specify in a determination for parental
leave pay that the primary claimant's PPL period starts on the child's maximum PPL
period start day and ends on the day worked out under subsection 14(3A).
Subsection 14(3A) provides that the Secretary must be satisfied that the primary
claimant is or will be eligible for parental leave pay on each day in the PPL period
that starts on the child's maximum PPL period start day and ends on a day in that
maximum PPL period. If the Secretary is satisfied the primary claimant will be
eligible for the entire maximum PPL period, then the end day is the last day of that
period.
Subsection 14(3B) requires the Secretary to specify in a determination for parental
leave pay that a primary claimant's supplement period starts on the first day of the
maximum supplement period for the child and ends on the day worked out under
subsection 14(3C).
Subsection 14(3C) provides that, if the Secretary is satisfied that the primary
claimant is or will be eligible on each day in the supplement period that starts:
where the first day of the maximum supplement period is before the birth of the child,
the day the child was born; or otherwise the first day in the maximum supplement
period, and ends on a day in the maximum supplement period. If the Secretary is
satisfied the primary claimant will be eligible for the entire maximum supplement
period, then the end day is the last day of that period.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 21 repeals and substitutes subsections 14(5) and 14(6), regarding
determinations on claims made at the same time by primary and secondary
claimants, where both claimants are sharing parental leave pay. Subsection 14(5)
provides that the Secretary must determine that parental leave pay is payable to a
secondary claimant if the Secretary is satisfied that a determination has been made
for a primary claimant and subsection 14(5A) applies.
Paragraph 14(5A)(a) provides that parental leave pay is payable where the
secondary claimant has a PPL period and was or will be eligible for parental leave
pay in that period.
Paragraph 14(5A)(b) provides that parental leave pay is payable where the
secondary claimant has a supplement period and was or will be eligible for parental
leave pay on each day in that period commencing on or after the child is born.
Subsection 14(6) provides that the Secretary must specify the secondary claimant's
PPL period in the determination. That period starts on the first day after the primary
claimant's PPL period ends and ends on the day worked out under
subsection 14(6A).
Subsection 14(6A) provides that the secondary claimant's PPL period starts on the
day worked out under subparagraph 14(6)(a), which is the first day after the primary
claimant's PPL period ends. If the secondary claimant does not have any paid
primary carer leave, subparagraph 14(6A)(b)(i) applies and the secondary claimant's
PPL period will end on the last day that the secondary claimant was or will be eligible
in the maximum PPL period for a child. If the secondary claimant does have paid
primary carer leave, paragraph 14(6A)(b)(ii) applies and the PPL period will end on
the last day that they are continuously eligible in the maximum PPL period for a child
that is followed by the number of days in the secondary claimant's adjustment for
paid primary carer leave. This adjustment is made to the secondary claimant's PPL
period in order to account for any paid primary carer leave that the secondary
claimant is entitled to.
Subsection 14(6B) provides that subparagraph 14(6A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made the claim in exceptional circumstances. The effect of this
is that the secondary claimant's period will not be reduced by a period of paid
primary carer leave the secondary claimant takes.
Subsection 14(6C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 14(6A)(b)(ii) is before the PPL period start day mentioned in
paragraph 14(6A)(a), the secondary claimant does not have a PPL period.
Subsection 14(6D) provides that the Secretary must specify the secondary
claimant's supplement period, which is determined in accordance with the PPL rules.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Specifying how to determine the supplement period for secondary claimants in the
PPL rules will provide the flexibility necessary to deal with unusual and varying
circumstances, and avoid a significant level of complexity in the primary legislation.
Item 22 inserts after section 15(1) new subsections 15(1A), 15(1B) and 15(1C).
Section 15 applies to determinations on claims made at the same time by primary
and secondary claimants, where the secondary claimant is to receive all the parental
leave pay. The primary claimant may be entitled to a lump sum supplement of
parental leave pay in these circumstances.
Subsection 15(1A) provides that the Secretary must determine that parental leave
pay is payable to the primary claimant where the primary claimant has a supplement
period and the primary claimant meets the eligibility criteria from the day the child is
born until the last day of the primary claimant's supplement period.
Subsection 15(1B) requires the Secretary to state in a determination for parental
leave pay that a primary claimant's supplement period starts on the first day of the
maximum supplement period for the child and ends on the day worked out under
subsection 15(1C).
Subsection 15(1C) provides that, if the Secretary is satisfied that the primary
claimant is or will be eligible on each day in the supplement period, starting either:
where the first day of the maximum supplement period is before the birth of the child,
the day the child was born; or otherwise the first day in the maximum supplement
period, until a day in the maximum supplement period, then the end day is that day.
If the Secretary is satisfied the primary claimant will be eligible for the entire
maximum supplement period, then the end day is the last day of that period.
Item 23 is a minor amendment to subsection 15(2) to state that the Secretary must
determine that PPL is not payable to a primary claimant only if the Secretary is not
satisfied that the person meets the requirements of subsection 15(1A), inserted by
item 22 above, and is eligible for a supplementary amount.
Item 24 is a minor amendment to subsection 15(3) deleting the phrase 'for the
secondary claimant's PPL period'.
Item 25 is a technical amendment and repeals and replaces paragraph 15(3)(b),
which required that the secondary claimant be eligible for parental leave pay on each
day in their PPL period. This requirement has been moved to new
subsection 15(3A).
Item 26 inserts new subsection 15(3A).
Paragraph 15(3A)(a) provides that parental leave pay is payable where the
secondary claimant has a PPL period and was or will be eligible for parental leave
pay on each day in that period.
Paragraph 15(3A)(b) provides that parental leave pay is payable where the
secondary claimant has a supplement period and was or will be eligible for parental
leave pay on each day in that period commencing on or after the child is born.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 27 repeals paragraph 15(5)(b) and replaces it with a reference to new
subsection 15(5A).
Item 28 inserts a new subsections 15(5A), 15(5B), 15(5C) and 15(5D). These
provisions relate to the calculation of the length of a secondary claimant's PPL
period.
Subsection 15(5A) provides that, if the Secretary is satisfied that the secondary
claimant was or will be eligible for each day in the period that starts on the child's
maximum PPL period start day, the period ends on the day worked out under
paragraph 15(5A)(b). If the secondary claimant does not have any paid primary
carer leave, subparagraph 15(5A)(b)(i) applies and the secondary claimant's PPL
period will end on the last day that they are continuously eligible in the maximum
PPL period for the child. If the secondary claimant does have paid primary carer
leave, subparagraph 15(5A)(b)(ii) applies and the PPL period will end on the last day
that the secondary claimant is eligible in the maximum PPL period for a child that is
followed by the number of days in the secondary claimant's adjustment for paid
primary carer leave.
This adjustment is made to the secondary claimant's PPL period in order to account
for any paid primary carer leave that the secondary claimant is entitled to.
Subsection 15(5B) provides that subparagraph 15(5A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made the claim in exceptional circumstances. The effect of this
is that the secondary claimant's PPL period will not be reduced by a period of paid
primary carer leave the secondary claimant takes.
Subsection 15(5C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 15(5A)(b)(ii) is before the PPL period start day mentioned in
paragraph 15(5A)(a), the secondary claimant does not have a PPL period.
Subsection 15(5D) provides that the Secretary must specify the secondary
claimant's supplement period, which is determined in accordance with the PPL rules.
Specifying how to determine the supplement period for secondary claimants in the
PPL rules will provide the flexibility necessary to deal with unusual and varying
circumstances, and avoid a significant level of complexity in the primary legislation.
Item 29 repeals subsection 16(3), regarding determinations on secondary claims
made after an effective primary claim, and replaces it with new subsections 16(3)
and 16(3A).
Substituted subsection 16(3) provides that, for parental leave pay to be payable to
the secondary claimant, the Secretary must be satisfied that a determination under
section 13 that parental leave pay is payable to the primary claimant was or will be in
force on the day before the start of the secondary claimant's PPL period and that
subsection 16(3A) applies.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Paragraph 16(3A)(a) provides that parental leave pay is payable where the
secondary claimant has a PPL period and was or will be eligible for parental leave
pay in that period.
Paragraph 16(3A)(b) provides that parental leave pay is payable where the
secondary claimant has a supplement period and was or will be eligible for parental
leave pay on each day in that period commencing on or after the child is born.
Item 30 repeals paragraph 16(4)(b), and replaces it with a reference to working out
the end day under new subsection 16(4A).
Item 31 inserts a new subsections 16(4A), 16(4B), 16(4C) and 16(4D). These
provisions relate to the calculation of the length of a secondary claimant's PPL
period.
Subsection 16(4A) provides for the working out of the end day by reference to the
period for which the secondary claimant is eligible, starting on the day worked out
under subparagraph 16(4)(a), which is the first day after the primary claimant's PPL
period ends. If the secondary claimant does not have any paid primary carer leave,
subparagraph 16(4A)(b)(i) applies and the secondary claimant's PPL period will end
on the last day that they are continuously eligible in the maximum PPL period for the
child. If the secondary claimant does have paid primary carer leave,
subparagraph 16(4A)(b)(ii) applies and the PPL period will end on the last day that
they are continuously eligible in the maximum PPL period for the child that is
followed by the number of days in the secondary claimant's adjustment for paid
primary carer leave. This adjustment is made to the secondary claimant's PPL
period in order to account for any paid primary carer leave that the secondary
claimant is entitled to.
Subsection 16(4B) provides that subparagraph 16(4A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made the claim in exceptional circumstances. The effect of this
is that the secondary claimant's period will not be reduced by a period of paid
primary carer leave the secondary claimant is entitled to.
Subsection 16(4C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 16(4A)(b)(ii) is before the PPL period start day mentioned in
paragraph 16(4A)(a), the secondary claimant does not have a PPL period.
Subsection 16(4D) provides that the Secretary must specify the secondary
claimant's supplement period, which is determined in accordance with the PPL rules.
Specifying how to determine the supplement period for secondary claimants in the
PPL rules will provide the flexibility necessary to deal with unusual and varying
circumstances, and avoid a significant level of complexity in the primary legislation.
Item 32 repeals paragraph 17(3)(b), and replaces determining an end day with a
reference to the day worked out under new subsection 17(3A).
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 33 inserts a new subsections 17(3A), 17(3B) and 17(3C). These provisions
relate to the calculation of the length of a tertiary claimant's PPL period.
Subsection 17(3A) provides for the day that the tertiary claimant's PPL period ends.
If the secondary claimant does not have any paid primary carer leave,
subparagraph 17(3A)(b)(i) applies and the tertiary claimant's PPL period will end on
the last day that they are continuously eligible in the maximum PPL period for a
child. If the secondary claimant does have paid primary carer leave,
subparagraph 17(3A)(b)(ii) applies and the tertiary claimant's PPL period will end on
the last day that they are continuously eligible in the maximum PPL period for a child
that is followed by the number of days in the secondary claimant's adjustment for
paid primary carer leave. This adjustment is made to the tertiary claimant's PPL
period in order to account for any paid primary carer leave that the secondary
claimant is entitled to.
Subsection 17(3B) provides that subparagraph 17(3A)(b)(ii), which reduces the
secondary claimant's PPL period where the secondary claimant has a period of paid
primary carer leave, does not apply where the Secretary is satisfied that the
secondary claimant made their claim in exceptional circumstances. The effect of this
is that the tertiary claimant's period will not be reduced by a period of paid primary
carer leave the secondary claimant is entitled to.
Subsection 17(3C) clarifies that, if the secondary claimant has a paid PC leave
period for the child and the PPL period end day worked out under
subparagraph 17(3A)(b)(ii) is before the PPL period start day mentioned in
paragraph 17(3A)(a), the tertiary claimant does not have a PPL period.
Item 34 repeals paragraph 24(b) and substitutes new paragraphs 24(b), (ba)
and (bb). Paragraph 24(b) provides that, if parental leave pay is payable, the notice
of payability determination must state the claimant's PPL period (if any), and the
amount of parental leave pay payable to the claimant for the child. It also provides
that, where parental leave pay supplement is payable for the child, the notice must
state the claimant's supplement period for the child and the amount of parental leave
pay supplement that is payable to the claimant for the child. Where the claimant is
not the primary claimant, it provides that the notice must also state the primary
claimant's PPL period.
Paragraph 24(ba) provides that, where the primary claimant has a paid primary carer
leave period for the child, the notice of determination must include the paid primary
carer leave period and the amount, if any, of primary carer pay the claimant is
entitled to.
Paragraph 24(bb) provides that, if the claimant is a secondary claimant, the notice of
determination must include the paid primary carer leave period, and, if the primary
claimant had a paid primary carer leave period, that period.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 35 inserts new section 24A, which allows the Secretary to vary a payability
determination. It will be necessary to vary a claimant's payability determination due
to a change in circumstance, such as a change to the length of paid primary carer
leave or the amount of primary carer pay a claimant is entitled to. Subsection 24A(1)
provides that a person's PPL period, supplement period or the amount of parental
leave pay supplement may be varied. Subsection 24A(2) states that a payability
determination may be varied on the initiative of the Secretary, or at the request of a
claimant made within one year of the PPL period ending, and in a manner approved
by the Secretary. A variation comes into force on the day it is made, in accordance
with subsection 24A(3).
Subsection 24A(4) provides that the provisions in Division 2 of Part 2-1 and in
Part 2-2 that require matters to be satisfied in order for a payability determination to
be made apply to a variation in the same way that they apply to a payability
determination.
Subsection 24A(5) provides that anything that is required to be specified in a
payability determination must also be specified in a variation to that determination.
Subsection 24A(6) provides that the notice of variation must comply with section 24,
giving notice of the things required by that section, as amended by item 34 above.
Where a payability determination has been varied, section 272 of the Paid Parental
Leave Act will apply in relation to allow a review body to determine events to have
happened, or not to have happened.
A note alerts the reader to the fact that the Secretary may have to give notice of the
variation to the person's employer under section 114.
Item 36 repeals and substitutes paragraph 25(1)(c) to allow person to request that
the Secretary revoke a PPL determination where the PPL period has already started,
provided the request is made in a manner approved by the Secretary. This is to
allow a person to stop receiving PPL and claim the new born-supplement add-on via
the family tax benefit system (see A New Tax System (Family Assistance) Act 1999).
Item 37 repeals Division 5 of Part 2-2, which provides for initial eligibility
determinations about parental leave pay, and substitutes a new Division 5 -
Provisional entitlement determinations about parental leave pay.
This amendment means parents, who lodge a claim before the birth of a child or a
child entering their care, will receive a provisional entitlement determination instead
of an initial eligibility determination. This change is to reflect the fact that the notice
will include a person's PPL period and the amount of parental leave pay they will
receive, which is information not linked to a person's eligibility. The change in the
Division's name better reflects the information the notice contains.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
New subsection 26(1) provides that the Secretary may make a provisional
entitlement determination for a primary claimant if the Secretary is satisfied the
person meets the work test, income test, Australian residency test, requirements in
Division 2 of Part 2-1, including having a PPL period, and provisions in Part 2-2
relating to making a payability determination.
New subsection 26(2) provides that the Secretary may make a provisional
entitlement determination for a secondary claimant if the Secretary is satisfied the
person meets (or will meet) the work test, income test, Australian residency test,
requirements in Division 2 of Part 2-1, including having a PPL period, and provisions
in Part 2-2 relating to making a payability determination.
New section 26A provides that, where the Secretary has made a provisional
entitlement determination that a person is provisionally entitled to parental leave pay,
the Secretary is not prevented from later making a different payability determination,
including that parental leave pay is not payable.
New section 27 provides that, when the Secretary makes a provisional entitlement
determination, the Secretary may act on the assumption that the then known state of
affairs will remain unchanged. This would include that the National Minimum Wage
will remain unchanged.
New section 28 provides that a provisional entitlement determination comes into
force on the day it is made.
New section 29 sets out the matters to be specified in a notice of provisional
entitlement determination. The provisions in Division 2 of Part 2-1 and in Part 2-2
requiring matters to be specified in a payability determination apply to a provisional
entitlement determination in the same way that they apply to a payability
determination, and section 24 also applies. Amongst other matters, the notice must
state the person's PPL period, the amount of parental leave pay they will receive,
and the amount of primary carer pay that they notified the Secretary they are entitled
to. In the case of a secondary claimant, it would also include the primary claimant's
PPL period and the number of week days in the primary claimant's paid primary
carer leave period.
Item 38 repeals paragraph 31(4B)(b) and substitutes a new paragraph 31(4B)(b)
which combines the person's DAPP period, any paid PC leave period for the child
and the reference period for the person's claim for parental leave pay for the child in
the calculation of days exceeding 126. This is to ensure that a person will not be
eligible for parental leave pay for more than 18 weeks' combined DAPP, parental
leave pay and PC pay for a child.
Item 39 is a technical amendment to subsection 33(2), which omits the reference to
'an initial eligibility determination' and substituting 'a provisional entitlement
determination'. This reflects the changes made by item 37.
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Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 40 inserts a new subsection 33(2A) to allow the PPL work test period to be
moved to an earlier period in circumstances where a woman has to cease work prior
to the birth of her child due to a hazard in her workplace that poses a risk to her
pregnancy and prevents her from continuing to work in her previous position. This is
to provide for women to whom another safe job could not be provided. For example,
boxers and jockeys often work on contracts and do not have employers who can
provide them with alternative safe work. The new subsection applies if a primary
claimant is pregnant with the child or is the birth mother of the child, she performs
paid work of a kind before the child is born, and ceases performing that work on a
particular day because of hazards connected with the work that pose a risk to the
pregnancy. The PPL rules may specify extra requirements relating to ceasing that
type of work which must also be satisfied. In this case, if the primary claimant could
not satisfy the work test that would ordinarily apply because she ceased work,
the work test period becomes the 392 days immediately before the day on which she
ceased work because of the hazards.
Items 41 and 42 amend section 36 to extend the period of a 'permissible break' from
eight weeks (56 days) to 12 weeks (84 days). This is to account for people in some
professions, such as casual teaching, who may have a longer break between two
work days, preventing them from accessing parental leave pay despite having a long
work history.
Item 43 is a technical amendment to note 2 to subsection 57(1), omitting the
reference to subsection 11(4) and substituting a reference to subsection 11A(1).
This reflects the changes made by items 16 and 17.
Item 44 amends section 62, being the Guide to Part 3-1 to state that parental leave
pay is payable in instalments for instalment periods, except lump sum supplements,
if the instalment periods overlap a person's PPL period.
Item 45 repeals and substitutes subsections 63(3) and (4) to provide that an
instalment of parental leave pay is payable to a person if one or more days of an
instalment period for the person fall within the person's PPL period, or parental leave
pay supplement is payable to that person. A supplement related instalment
becomes payable on:
the payday for the instalment for the person; or
as soon as practicable after the earlier of the last day of the person's paid PC
leave period and the last day of the person's supplement period.
Items 46 and 47 are technical amendments to deal with the insertion of a new debt
recovery provision at section 190A by item 61. They amend sections 66 and 70
respectively to provide that an instalment may be deducted in accordance with
section 190A.
Item 48 is a technical amendment to subsection 76(3) to delete the phrase 'for the
person's PPL period'. This amendment is required as not all PPL funding amounts
will relate to a person's PPL period.
24
Schedule 1 - Adjustment for paid primary carer pay and other amendments
Items 49 and 50 amend section 87, regarding the payment of arrears. Item 49
repeals the heading and substitutes a new heading, 'Payment of arrears - extending
PPL period after review or variation'. Item 50 omits the words 'after review',
and substitutes 'after review or variation'. The amendments mean that, where a
determination has been varied in accordance with new section 24A, any instalments
relating to arrears must be paid as soon as practicable.
Items 51 and 52 amend section 92, regarding the effect of extending the PPL period
after review. Item 51 repeals the heading and substitutes a new heading, 'Effect of
extending PPL period after review or variation'. Item 52 amends paragraph 92(b)
so it applies where a determination is reviewed or varied. The amendments mean
that, where a determination has been varied in accordance with section 24A to
extend the PPL period, the Secretary is required to pay the instalments.
Items 53 and 55 are technical amendments to paragraphs 101(1)(a) and 117(1)(a)
to reflect the amendments to Division 5 of Part 2-2 (see Item 37). The reference to
'an initial eligibility determination'' is substituted with 'a provisional entitlement
determination', and the reference to 'initially eligible for' is substituted with
'provisionally entitled to'.
Item 54 amends paragraph 115CB(7)(b) to insert a reference to 'paid PC leave
period'. This is to ensure that a person will not be eligible for dad and partner pay
(DAPP) for more than 18 weeks' combined DAPP, parental leave pay and PC pay.
Example
Lucy transfers 15 weeks' parental leave pay to her husband Kevin. Kevin also has 2
weeks' paid paternity leave from his employer. Kevin subsequently claims 2 weeks'
DAPP.
The combined total of paid parental leave, employer-provided primary carer leave
and claimed period for DAPP results in 19 weeks, exceeding the 18 week cap by
1 week. Kevin can receive DAPP for the first week, but is not eligible for the second
week.
Item 56 amends paragraph 117(1)(b) to allow the Secretary to require a person to
give information, or produce a document, that is relevant to determining the amount
of parental leave pay a person is entitled to.
Item 57 amends paragraph 124(2)(a) to allow the Secretary to use a person's tax file
number to detect cases where incorrect amounts of parental leave pay have been
paid, otherwise than by instalment.
Item 58 inserts new paragraphs 125(1)(c), (d), (e) and (f) to impose an obligation on
a person who has made an effective claim for parental leave pay to notify the
Secretary of a change in the amount of primary carer pay they are entitled to for the
child, or if they become entitled to primary carer pay, or there is a change in their
paid primary carer leave period, or they become entitled to a paid primary carer
leave period.
25
Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 59 repeals and replaces sections 166 and 167. These sections provide when
an overpayment of an instalment of parental leave pay paid by an employer to an
employee or by the Secretary to a person is a debt to the Commonwealth. Item 59
amends these provisions so that in all cases, a debt to the Commonwealth will arise
upon an excess amount being paid to the employee or person. This is different from
the current situation, where in some instances a debt will only arise at the end of the
employee or person's PPL period. This amendment is necessary in order for the
new debt recovery provision in section 190A, inserted by item 59 below, to be
effective. That provision provides for the recovery of debts arising under the Act
from future instalments of parental leave pay payable to the debtor.
Note 1 alerts the reader that instalments may stop being payable with retrospective
effect if the payability determination is set aside or varied after the instalments are
paid.
Note 2 alerts the reader that, if no amounts are payable to, or in relation to, a person
for a child as instalments (for example, if a payability determination that parental
leave pay is payable to the person for the child has not been made, or has been set
aside), the amount of the excess is the total amount mentioned in paragraph (a).
Note 3 alerts the reader that this section may apply to overpayments by way of
instalments or amounts that are mistakenly paid. For example, an overpayment or
mistaken payment may arise due to administrative error, the setting aside or
variation of a payability determination or payments following a stay order under
subsection 41(2) of the AAT Act.
Item 60 is a technical amendment to section 182 to provide that a debt that arises
under the Act may be recovered from an instalment payable to the debtor in
accordance with section 190A, inserted by item 61 below.
Item 61 inserts a new section 190A which is a new debt recovery provision
providing for the Secretary to deduct an amount from an instalment that is payable to
a claimant to repay a debt that owed by that claimant to the Commonwealth under
the Act. The Secretary may determine the amount to be deducted from each
instalment, including an amount which would reduce the instalment to zero if the
debtor has consented. Each instalment is to be reduced by the amount determined
by the Secretary until the sum of those amounts, and any amounts of the debt
recovered under another provision of this Act or under another Act, equals the debt.
The Secretary may vary the amount to be deducted from an instalment.
Item 62 makes consequential amendments to sections 193 and 197, which provide
for circumstances in which a debt arising under the Act can be waived or written off.
These amendments mean that a debt cannot generally be waived or written off if that
debt is recoverable by a deduction from future instalments of PPL under
section 190A.
26
Schedule 1 - Adjustment for paid primary carer pay and other amendments
Item 63 amends subsection 272(1) so the provision applies where a payability
determination is varied. This means, in circumstances where a payability
determination is varied as a result of new information, a review body can determine
that an event did not happen that would have happened if the original determination
had been different, or that an event did happen that would not have happened if the
original determination had been different.
Part 2 - Application
Item 64 provides that the amendments made apply to a claim for parental leave pay
for a child where the child is born, or becomes entrusted to the care of a person
(see section 275 of the Paid Parental Leave Act) on or after the commencement of
the Schedule 1 amendments.
Item 65 provides for transitional arrangements for persons who receive employer
top-up pay. The provision applies to persons whose child was born, or entrusted to
their care during the three year period starting from the commencement of the
Schedule 1 amendments. (For example, if the Schedule 1 amendments commence
on 1 January 2017, the grandfathering period will be between 1 January 2017 and
31 December 2020.) At subsection 11F(5), inserted by item 17, the reference to
'treat the amount of PC pay for that period as being the amount that it would be
disregarding subsection 11B(2)' should be replaced with 'disregard the amount of
that PC pay for that period'.
The effect of this is that, for people who have children born or entrusted into their
care during the three year grandfathering period who receive employer top-up pay,
the amount received from their employer will be disregarded when calculating their
parental leave pay entitlement. Employer top-up pay is an arrangement whereby the
amount a person receives in Government funded parental leave pay is topped up by
their employer to an agreed amount. From the commencement of the Schedule 1
amendments, these amounts will be taken into account when calculating a person's
entitlement to Government funded parental leave pay.
This three-year grandfathering period will ensure employers and employees who
negotiated workplace entitlements based on paid parental leave entitlements in
place at a particular point in time have an opportunity to renegotiate the terms of
employment if necessary.
27
Schedule 2 - Employer opt-in
Schedule 2 - Employer opt-in
Summary
To ease administrative burdens on business, the Paid Parental Leave Act will be
amended to remove the requirement for employers to provide Government-funded
parental leave pay to their eligible long-term employees.
From the first 1 January, 1 April, 1 July or 1 October to occur after this Bill receives
Royal Assent, employees will be paid directly by the Department of Human Services,
unless an employer opts in to provide parental leave pay to its employees and an
employee agrees to their employer paying them.
Background
Currently under the Paid Parental Leave Act, in the majority of cases, employers are
required to provide parental leave pay to their eligible long-term employees.
The Secretary of the Department of Human Services (as a delegate of the Secretary
of Social Services) must make an employer determination that a person's employer
is to pay the person's instalments of parental leave pay, if the Secretary is satisfied
that certain conditions are met.
However, an employer determination can be made, despite not all of the conditions
being satisfied, if an employer has made an election to 'opt-in' to pay instalments of
parental leave pay to the employee and the employee consents to the employer
paying the instalments. If an employer determination is in force for an employer and
their employee, the employer must pay instalments of parental leave pay to their
employee.
In their feedback to the Paid Parental Leave review, employer and industry groups
generally did not support the employer role, particularly in relation to small business.
These stakeholders considered the employer role places an unnecessary
administrative burden on business, and any benefits to employers in terms of
employee retention were outweighed by the administrative burden imposed.
From the first 1 January, 1 April, 1 July or 1 October to occur after this Bill receives
Royal Assent, payments of parental leave pay will be made by the Department of
Human Services, unless an employer opts in to manage the payment of parental
leave pay to their employees, and their employee agrees to the employer paying
them. This will go some way towards easing the administrative burden on business.
The amendments will only require an employer to provide instalments of parental
leave pay to a person if an employer determination is in force for the employer and
the employee. An employer determination can only be made if the employer has
made an election to pay instalments, that election applies to the parental leave pay
claimant, and certain other conditions are met, including that the employee agrees to
their employer paying them. Parental leave pay funding amounts will then be
transferred to the employer from the Department of Human Services for payment to
the employee, consistent with current arrangements.
28
Schedule 2 - Employer opt-in
If an employer determination is made for a particular employer and employee,
but the employer no longer wishes to pay parental leave pay for that particular
employee, the employer can decline the paymaster role. If this happens,
the Department of Human Services will pay the employee.
To reflect the non-mandatory nature of this role, employers who do not respond to a
notice of an employer determination will no longer be potentially subject to a
compliance notice. Review of an employer determination is no longer required
because the employer can simply decline the paymaster role.
The amendments made by this Schedule commence on the first 1 January, 1 April,
1 July or 1 October to occur after this Bill receives Royal Assent.
Explanation of the changes
Part 1 - Amendments
Amendments to the Paid Parental Leave Act
Employer election to pay parental leave pay
The main amendments to give employers the right to elect to pay parental leave pay
to their employees relate to removing the obligation on the Secretary to make an
employer determination if certain conditions are met. This obligation is in
section 101. Subsection 101(1) provides that the Secretary must make an employer
determination if various criteria are met. Instead, in place of an obligation to make a
determination if instalments are likely to be paid for at least 40 consecutive PPL days
and the employee has been with the employer for at least 12 months, item 17
substitutes new paragraphs 101(1)(b) and (c), requiring that the employer has made
an election under section 109 to pay instalments and that election applies to the
person (the PPL claimant), and that the person has consented in their claim to their
employer paying instalments to the person.
As a consequence of removing reference to the length of time for which a person
has been with an employer from section 101, subsection 278(2), which guides
assessing the duration of employment, is repealed by item 50. Item 49 adjusts the
structure of section 278 as a consequence of this repeal.
If more than one employer of the person has made an election to pay parental leave
pay, the claimant may nominate the employer who would pay instalments to the
person. Item 19 amends paragraph 101(1)(f) to substitute reference to amended
paragraphs (b) to (d), which will now contain the criteria for making the
determination.
Item 20 repeals subsection 101(2), which becomes redundant as the result of
introducing into subsection 101(1) an employer election as a criterion for making an
employer determination.
29
Schedule 2 - Employer opt-in
Provision is already made for an employer to elect to pay parental leave pay to their
employee in section 109. To reflect the fact this will now be the only means of an
employer becoming obliged to pay parental leave pay to their employee, various
criteria currently guiding whether a compulsory employer determination can be made
are inserted into section 109. Item 31 inserts into subsection 109(1) the requirement
that the employer have an ABN before being able to elect to pay. Item 18 removes
this requirement from section 101 by repealing paragraph 101(1)(e).
Item 32 expands paragraph 109(2)(b) by requiring an employer's bank account
information to be provided in the election notice given by the employer, including
account number, BSB, account name and the name of the financial institution. This
information was previously required to be provided in the employer's compulsory
acceptance notice under section 104 in response to notice of the making of the
employer determination. Item 22 repeals subsection 104(2) to remove this aspect of
an acceptance notice, and repeals subsection 104(5), which becomes redundant as
a result of the expanded election notice. Item 5 makes a consequential amendment
to the definition of bank account information in section 6, to refer to
paragraph 109(2)(b).
Section 299 extends the Act to persons who are in a relationship that is similar to
that of employer and employee. Subsection 299(1) currently gives the Secretary
capacity to make employer determinations in circumstances provided by the PPL
rules. Item 51 amends this to substitute provision for a person to make an election
under section 109 to pay instalments to another person if both persons are in a
relationship that is similar to the relationship between an employer and an employee.
Items 1 to 3 consequentially amend section 4, which sets out a Guide to the Act,
to reflect the changed role of employers. Item 16 consequentially amends
section 100, which sets out a Guide to Part 3-5 - Employer determinations, to reflect
the voluntary nature of the role.
Accepting the employer paymaster role
If an employer determination is made, the employer will retain the right to accept or
refuse the obligation to pay instalments to the person. Item 21 repeals and
substitutes section 103, replacing the former obligation on an employer to accept the
obligation or seek review. New section 103 will allow an employer a period of
14 days (or such longer period allowed by the Secretary) after receiving notice under
section 102 of the making of an employer determination, to accept or not accept the
obligation. The employer may either give the Secretary an acceptance notice
complying with existing section 104, or give a non-acceptance notice, either orally or
in writing, declaring that the employer does not accept the employer's obligation to
pay instalments to the person. A definition of non-acceptance notice is inserted
into section 6 by item 7, referring to new paragraph 103(1)(b). A consequential
amendment is made to the definition of acceptance notice by item 4 to refer to new
paragraph 103(1)(a).
30
Schedule 2 - Employer opt-in
If the employer does not accept the obligation, the Secretary must revoke the
employer determination. Section 108 stipulates when the Secretary is required to
revoke the employer determination, by setting out matters of which the Secretary
must be satisfied. Item 28 inserts new item 1A into the table following
subsection 108(1), providing that, if the Secretary is satisfied that the employer has
given a non-acceptance notice for the person under paragraph 103(1)(b),
the employer determination is revoked with effect on the day of the revocation.
Item 29 amends table item 2 of section 108 to provide for revocation of the employer
determination if an employer does not respond to notice of the determination within
the period for response.
An employer's failure to accept an employer paymaster role under existing
section 103 could result in compliance activity by the Secretary. This will not result
from new section 103 as substituted by item 21. As a consequence, table items in
section 146 defining civil penalty provisions referring to section 103 are no longer
correct. Item 33 consequentially repeals table item 10 referring to section 103.
As a further consequence, a compliance notice will not be given in reliance upon
new section 103. Section 157, which deals with giving a compliance notice,
is amended by item 34 to omit reference to section 103.
Review of employer determinations
Because acceptance of this role is now voluntary, there is no need for the capacity to
seek review of a decision to make an employer determination. Section 207, which
gives the right to internal review of such decision, is repealed by item 39. Similarly,
section 223 sets out decisions which may be reviewed, currently by the SSAT, but by
the AAT after 1 July 2015 as a result of the Tribunals Amalgamation Act 2015.
Item 45 removes reference to an employer determination decision from section 223.
Item 6 repeals the definition of employer determination decision from section 6.
Section 93 provides for the effect of an employer determination coming into force
after review, which becomes redundant as a result of the repeal by item 39. Item 15
repeals section 93. Consequentially, item 9 removes redundant references to
section 93 from a note to subsection 64(1). Item 11 repeals subsection 84(3),
dealing with the payment of an instalment following review of the employer
determination. A consequential amendment is made by item 8 to the definition of
transfer day in section 6, omitting reference to subsection 84(3). Items 12 and 13
omit reference to review of an employer determination from the heading to
section 85 and paragraph 85(1)(a), dealing with payment of arrears following review.
Item 14 makes a consequential amendment to subsection 85(3) to reflect the
changed structure of section 85. Item 10 makes a consequential amendment to
section 83, to omit reference to the Secretary paying instalments because an
employer determination is being reviewed.
31
Schedule 2 - Employer opt-in
Similarly, section 105 relates to giving bank account and other information after
review. Item 23 repeals section 105. Item 27 consequentially amends section 107,
relating to when an employer determination comes into force, to repeal
subsection 107(3), relating to an employer determination which has been reviewed.
Items 24 to 26 make consequential amendments to the structure of section 107 to
reflect the effect of item 27.
Item 30 deals with giving notice of the revocation of an employer determination to
the SSAT under subsection 108(6) when an application has been made for review of
the determination, by repealing subsection 108(6).
An employer's failure to provide bank details following review could result in
compliance activity by the Secretary. This will not result from section 105 as a result
of its repeal by item 23. As a consequence, table items in section 146 defining civil
penalty provisions referring to section 105 are no longer correct. Item 33
consequentially repeals table item 11, which refers to section 105.
As a further consequence, a compliance notice will not be given in reliance upon
section 105. Section 157, which deals with giving a compliance notice, is amended
by item 34 to omit reference to section 105.
References to internal review of a decision to make an employer determination are
removed from notes to section 203 by items 36 and 37. Items 38, 40, 41 and 42
remove reference to an application for review under section 207 of an employer
determination decision from sections 205, 209, 210, and 212 as a consequence of
item 39. Item 43 is a consequential amendment to the structure of section 212.
Similarly, references of the right to AAT review of a decision to make an employer
determination are removed by items 46, 47 and 48 from section 224 relating to
applications for review, and by item 45 from section 223, relating to review of
employer decisions.
Item 35 amends section 202, which sets out a Guide to Part 5-1 - Internal review of
decisions, to reflect the fact that the only remaining employer review decision is an
employer funding amount decision. Similarly, item 44 amends section 213, which
sets out a Guide to Part 5-2 - Review by the Social Security Appeals Tribunal
(which, from 1 July 2015, becomes the Administrative Appeals Tribunal as a result of
the Tribunals Amalgamation Act 2015) to remove reference to employer
determination decisions.
Part 2 - Contingent Amendments
Division 1--Amendments if the Regulatory Powers (Standardisation Reform)
Act 2016 does not commence before this Act
Items 52 and 53 amend subsection 159(1), which deals with giving infringement
notices by the Secretary. An infringement notice will not be given in reliance upon
new section 103 or the repealed section 105. Subsection 159(1) is consequently
32
Schedule 2 - Employer opt-in
amended and paragraphs 159(1)(b) and (c) are repealed by item 53 to omit
reference to sections 103 and 105.
The amendments made by this Division commence on the first 1 January, 1 April,
1 July or 1 October to occur after this Bill receives Royal Assent.
However, the amendments do not commence if Schedule 11 to the Regulatory
Powers (Standardisation Reform) Act 2016 commences at or before the start of the
first 1 January, 1 April, 1 July or 1 October after Royal Assent
Division 2--Amendments if the Regulatory Powers (Standardisation Reform)
Act 2016 commences before this Act
Item 54 has the same effect as item 53 above by repealing paragraphs 159(1)(b)
and (c).
The amendments made by this Division commence on the first 1 January, 1 April,
1 July or 1 October to occur after this Bill receives Royal Assent.
However, the amendments will not commence if Schedule 11 to the Regulatory
Powers (Standardisation Reform) Act 2016 does not commence at or before the start
of the first 1 January, 1 April, 1 July or 1 October after Royal Assent.
Division 3--Amendments contingent on the Regulatory Powers
(Standardisation Reform) Act 2016
Item 55 has the same effect as items 53 and 54 above by repealing paragraphs
159(1)(b) and (c).
The amendments made by this Division commence immediately after the
commencement of Schedule 11 to the Regulatory Powers (Standardisation Reform)
Act 2016.
However, the amendments will not commence if Schedule 11 to the Regulatory
Powers (Standardisation Reform) Act 2016 commences at or before the
commencement of the provisions set out in Schedule 2, Part 1 of this Bill.
Part 3 - Application and transitional provisions
Item 56 provides that the amendments made by Parts 1 and 2 of this Schedule apply
in relation to an employer determination that is made on or after the commencement
of this Schedule in relation to a claim for parental leave pay that is made before, on
or after that commencement.
Item 57 is a transitional provision relating to elections made before commencement.
This item provides that an election under section 109 of the Paid Parental Leave Act
that is in force immediately before the commencement of this Schedule ceases to be
in force at that commencement.
33
Schedule 2 - Employer opt-in
Item 58 is a transitional provision relating to revoking employer determinations made
before commencement.
Subitem 58(1) provides that this item applies if:
an employer determination was made before the commencement of this
Schedule for a person and the person's employer;
the determination had not been revoked before that commencement; and
the person's PPL period had not started before that commencement.
Subitem 58(2) provides that the Secretary must revoke any determination captured
under subitem 58(1).
Subitem 58(3) provides that the Paid Parental Leave Act applies as if a revocation
under subitem 58(2) were made under subsection 108(1) of that Act.
34
STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
FAIRER PAID PARENTAL LEAVE BILL 2016
Schedule 1 - Adjustment for primary carer pay and other amendments
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
The Paid Parental Leave Act 2010 provides for the Paid Parental Leave scheme,
a Government-funded payment that complements the entitlement to unpaid leave
under the National Employment Standards in the Fair Work Act 2009. The Paid
Parental Leave scheme currently consists of Parental Leave Pay, an 18 weeks
payment at the rate of the National Minimum Wage for eligible primary carers (mostly
birth mothers) of newborn and recently adopted children, and Dad and Partner Pay,
a two-week payment at the rate of the National Minimum Wage for eligible fathers or
partners caring for newborn or recently adopted children.
The Paid Parental Leave scheme was implemented with the objective of providing
financial support to primary carers (mainly birth mothers) of newborn and adopted
children, in order to:
allow those carers to take time off work to care for the child after the child's
birth or adoption;
enhance the health and development of birth mothers and children;
encourage women to continue to participate in the workforce;
promote equality between men and women, and the balance between work
and family life.
Currently, eligible primary carers can receive employer-provided primary carer pay1
and government-funded Parental Leave Pay. Under the amendments to the Paid
Parental Leave scheme, primary carers will no longer receive both their
employer-provided primary carer pay and the full 18 weeks of government-funded
Parental Leave Pay. Similarly, persons will no longer receive Parental Leave Pay or
Dad and Partner Pay if the total days of the person's PPL period, any paid PC leave
period or reference period exceed 126.
1
Primary carer pay is an employer payment under the terms of an employee's employment payable
because the employee is expecting to give birth, or to be the primary carer for a child who has not yet
turned one or who has been adopted by the employee or entrusted to their care as part of an adoption
process.
1
Statements of compatibility with human rights
Eligible primary carers without access to employer-provided primary carer pay will
continue to be eligible for the full 18 weeks of Parental Leave Pay at the rate of the
National Minimum Wage, and eligible primary carers who receive less than 18 weeks
of employer-provided primary carer pay will be entitled to the residual amount of
weeks of Government-provided Parental Leave Pay. Additionally, eligible primary
carers whose employer-provided primary carer pay is paid at less than the National
Minimum Wage for their period of paid leave (for example, because they work
part-time) will receive a supplement for this period to ensure they receive the full
National Minimum Wage rate.
This will ensure that the Paid Parental Leave scheme continues to support parents
who would not otherwise have access to paid parental leave from their employer,
while enabling Government resources to be refocused on other complementary
measures to support working parents, including increased childcare support.
Eligible fathers and partners will continue to be eligible to receive two weeks of
Dad and Partner Pay and any employer-provided paid paternity leave, where the
total paid leave periods do not exceed 126 days.
This Schedule also makes amendments to the Parental Leave Pay work test to
modify the current rules for pregnant women in dangerous occupations and extend
the permissible break for employees who have a long work history but have breaks
between work that are greater than the currently permitted eight weeks.
Under the current Paid Parental Leave scheme rules, a person will meet the work
test where they have:
worked for at least 10 months of the 13 months prior to the birth or adoption of
their child;
worked for at least 330 hours in that 10 month period with no more than an
eight week gap between two working days.
The amendments in this Schedule will allow the work test period for a pregnant
woman in an unsafe job to be moved from the 13 months period prior to the birth of
their child to the 13 month period before the pregnant woman had to cease work due
to the hazards connected with her employment and the subsequent risk to her
pregnancy.
Further amendments in this Schedule provide for the permissible break in the Paid
Parental Leave Parental Leave Pay work test to be extended from eight weeks to
12 weeks between two working days. Currently, some people's access to
government funded Parental Leave Pay is limited because they have breaks
between employment of longer than eight weeks despite having a long term
established work pattern. This amendment addresses that issue.
The Schedule also makes amendments to the current suite of debt collection options
to allow for a Parental Leave Pay debt to be deducted from ongoing instalments of
government-funded Parental Leave Pay. This will mean that, where a debt is
created as a result of a variation in Parental Leave Pay entitlement, that debt can be
collected from remaining Parental Leave Pay instalments. This amendment will
2
Statements of compatibility with human rights
create administrative efficiencies and will ensure that customers receive their correct
entitlements in a more streamlined manner.
Human rights implications
The changes to the debt provisions included in this Schedule do not impact on
entitlement to Parental Leave Pay - they are designed to create administrative
efficiencies for the payment of the correct amount of Parental Leave Pay. This
change does not engage any human rights.
The other amendments to the Paid Parental Leave scheme under this Schedule are
likely to engage the following human rights:
The right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises 'the right of everyone to social security, including social
insurance'. That right requires a country to, within its maximum available resources,
provide a minimum essential level of benefits to all individuals and families that will
enable them to acquire at least essential health care, basic shelter and housing,
water and sanitation, foodstuffs, and the most basic forms of education.
Access to social security is required when a person has no other income and has
insufficient means to support themselves and their dependants. The amendments to
the Paid Parental Leave scheme will continue to ensure that all eligible working
parents receive appropriate financial assistance - at least 18 weeks of payment at
least at the rate of the National Minimum Wage from their employer, the Government
or a combination of both - to take time off work at the birth or adoption of their child.
Eligible parents who do not have access to employer-provided primary carer pay will
continue to be financially supported under the amendments to the Paid Parental
Leave scheme, fulfilling Australia's obligations to the right to social security.
Analysis of data from the Paid Parental Leave evaluation2 indicates that 53 per cent
of new parents will not be affected by this measure and therefore will not have their
right to social security limited in any way. Of the remaining parents, the number of
weeks of Government-provided Parental Leave Pay will be reduced in accordance
with the number of weeks of primary carer pay that they receive from their employer.
While this will result in a reduction in the support that they receive through the Paid
Parental Leave scheme, it does not mean that these parents will have insufficient
means to support themselves and their dependants. These new parents will have at
least the same amount of paid parental leave as those new parents who are
supported through the Paid Parental Leave scheme alone.
2
The analysis of the impact of the measure on Parental Leave Pay claimants used Paid Parental
Leave evaluation survey data that was undertaken as part of the overall Paid Parental Leave
evaluation. The analysis was based on responses from a two wave survey of over 4,000 mothers
who had a baby in October or November 2011. Surveys were undertaken when the babies were
about 7 months old and again when the babies were 13 months old. The impact assessment factored
in incomes changes (i.e. incomes were increased to 2014-15 values). The estimates of numbers
affected were derived by extrapolating information from Paid Parental Leave evaluation survey data to
the Paid Parental Leave population as a whole. The Paid Parental Leave evaluation survey data was
sample data that was nationally representative of Paid Parental Leave eligible mothers.
3
Statements of compatibility with human rights
The Paid Parental Leave scheme is just one of a significant package of financial
measures provided by the Australian Government to families, including low and
middle-income families, to assist with the costs of raising children. Other forms of
financial assistance available to eligible parents include Family Tax Benefit,
Parenting Payment, and childcare assistance.
Given this, and given the crucial objective to create savings to allow expenditure in
other key areas of benefit to families, this is a reasonable, necessary and
proportionate change.
Also, under this Schedule, the current work test rules will be amended to take into
account the circumstances of pregnant employees who are unable to continue in
their jobs because the nature of their employment presents a risk to their pregnancy
and there are no safe job alternatives available. Moving the work test period to the
13 months immediately before the pregnant woman ceased her work will enable her
to demonstrate her genuine attachment to the workforce and thereby extend access
to Government-funded Parental Leave Pay.
Additionally, the extension of the permissible break from eight weeks to 12 weeks
between two working days will extend access to the Paid Parental Leave scheme to
parents who systematically have breaks of more than eight weeks at the end of the
year but who have a long work history. Casual teachers and contract workers, in
particular, will benefit from this change.
These amendments to the work test and permissible break will enable more working
parents to be eligible for Government-funded Parental Leave Pay and, as a result,
promote the right to social security for parents in these situations.
Right to work and the right to maternity leave
Article 7 of the ICESCR sets out the right to just and favourable conditions of work,
including:
remuneration that provides all workers, as a minimum, with fair wages and
equal remuneration for work of equal value without distinction of any kind;
safe and healthy working conditions;
equal opportunity to be promoted in employment to an appropriate higher
level, subject to no considerations other than those of seniority and
competence; and
rest, leisure and reasonable limitation of working hours and periodic holidays
with pay, as well as remuneration for public holidays.
The UN Committee on Economic, Social and Cultural Rights has commented that
Article 7 of the ICESCR requires States Parties to take steps to 'reduce the
constraints faced by men and women in reconciling professional and family
responsibilities by promoting adequate policies for childcare and care of dependent
family members.'
4
Statements of compatibility with human rights
The right to maternity leave is contained within Article 11(2)(b) of the Convention on
the Elimination of All Forms of Discrimination Against Women (CEDAW) and
Article 10(2) of the ICESCR. Article 11(2)(b) of the CEDAW requires States Parties
'to introduce maternity leave with pay or with comparable social benefits without loss
of former employment, seniority or social allowances'. Article 10(2) of the ICESCR
states that, 'Special protection should be accorded to mothers during a reasonable
period before and after childbirth. During such a period working mothers should be
accorded paid leave or leave with adequate social security benefits.'
The amendment to the Paid Parental Leave scheme is compatible with the right of
parents to take time away from the workplace following the birth or adoption of their
child. The amendment will guarantee eligible working mothers receive a minimum
entitlement to paid maternity leave, equivalent to 18 weeks of payment at the rate of
the National Minimum Wage, to support them to take time off work after the birth or
adoption of their child. Eligible fathers or partners will continue to be eligible to
receive two weeks of Dad and Partner Pay at the rate of the National Minimum
Wage in addition to any employer-provided paid paternity leave, where the total paid
leave periods do not exceed 126 days.
The amendments do not interfere with the existing rights under the Fair Work Act
2009, including access to 12 months of unpaid parental leave, noting that Australia
has a reservation in relation to Article 11(2)(b) of the Convention on the Elimination
of All Forms of Discrimination Against Women.
The evaluation of the Paid Parental Leave scheme found that, following the
introduction of the Parental Leave Pay, higher income mothers did not significantly
change the amount of leave they took after the birth or adoption of their child. In
contrast, mothers who were on lower incomes, self-employed or casually employed
significantly extended the time they took off work after the birth of their child.3
Further analysis undertaken using the Paid Parental Leave evaluation survey data
shows that mothers with higher incomes were more likely to have access to
employer-provided primary carer pay. The analysis also shows that mothers who
were on lower incomes, self-employed or casually employed were less likely to have
access to employer-provided primary carer pay.
There is a substantial concern in the community and in Government that access to
affordable quality child care is a barrier to participation for many women. Increasing
workforce participation and, through this, opportunity, is a priority approach for all
working age people. As the safety net already provided by the scheme will remain in
place for women most in need, the measure is considered reasonable and
proportionate because it will contribute savings to be redirected to deliver other
measures considered in the community to be more effective ways of increasing
participation opportunity - and therefore the progressive realisation of rights.
As identified in the 2015 Intergenerational Report, increasing workforce participation
is a core priority for maintaining and improving standards of living.
3
Paid Parental Leave Evaluation, final report, pages 4-5, available at: https://www.dss.gov.au/our-
responsibilities/families-and-children/programmes-services/paid-parental-leave-scheme/paid-parental-
leave-evaluation-phase-4-report
5
Statements of compatibility with human rights
The modification of the work test takes into account the circumstances of pregnant
employees who are unable to continue in their job because the nature of their
employment presents a risk to their pregnancy and there are no safe job alternatives
available. This change to the work test ensures that mothers in these situations now
have access to Government-funded Parental Leave Pay so long as they meet all
other relevant eligibility criteria.
Similarly, the extension of the permissible break from eight weeks to 12 weeks
between jobs ensures that primary carers who previously failed the work test
because they exceeded the allowed eight weeks now have access to government
funded parental pay so long as they meet all other relevant eligibility criteria.
These amendments will enable more working parents to be eligible for Government-
funded Parental Leave Pay and as a result, promote the right to paid maternity
leave.
Right to health
Under Article 24(2)(d) of the Convention of the Rights of the Child (CRC), there is a
requirement that States Parties 'ensure appropriate pre-natal and post-natal health
care for mothers'. Article 10(2) of the ICESCR states that 'working mothers should
be accorded paid leave or leave with adequate social security benefits for a
reasonable period before and after childbirth'.
The amendments to the Paid Parental Leave scheme will continue to ensure that all
eligible working mothers receive appropriate financial assistance, equivalent to
18 weeks of payment at the rate of the National Minimum Wage, to take time off
work at the birth or adoption of their child for maternal recovery and to bond with
their child. Mothers may also be eligible for other Australian Government financial
assistance, including Family Tax Benefit, Parenting Payment, and childcare
assistance.
The modification of the Paid Parental Leave work test rules for pregnant employees
in unsafe jobs will ensure that mothers in these situations do not have to continue
working in these jobs to meet the work test for Government-funded Parental Leave
Pay. Under this amendment, pregnant mothers who are required to cease work due
to the hazardous nature of their work will now have access to Government funded
Parental Leave Pay so long as they meet all other relevant eligibility criteria.
This change promotes the pre-natal health of the unborn child and mother by
enabling a person to cease work when there are hazards in the workplace that pose
a risk to the pregnancy and there is no alternative safe job available and still be able
to satisfy the work test for Parental Leave Pay. The amendment will also promote
the post natal health of mothers in these circumstances by extending access to
Government-funded Parental Leave Pay which will enable them to take time out of
the workforce to care for their child and recover from the birth.
6
Statements of compatibility with human rights
The extension of the permissible break to 12 weeks will also ensure that claimants
who would previously have failed to meet the work test despite having a long work
history will now have access to appropriate financial assistance to take time off work
at the birth or adoption of their child for maternal recovery and to bond with their
child. This amendment, therefore, promotes the health of the mother and new child.
Rights to equality and non-discrimination
Article 3 of the ICESCR seeks to ensure the right of both men and women to the
enjoyment of all economic, social, and cultural rights set forth within the convention.
The amendments to the Paid Parental Leave scheme will ensure all eligible
working mothers are afforded the same right to paid maternity leave equivalent to
at least 18 weeks of payment at the rate of the National Minimum Wage.
Mothers who have access to employer-provided primary carer pay of at least 18
weeks at least at the National Minimum Wage will not be eligible for the
Government-provided Parental Leave Pay. On the other hand, eligible working
mothers who may not be in a strong position to bargain for access to employer-
provided primary carer pay, or who do not currently have a collective or individual
agreement with their employer to provide paid primary carer leave, will continue to
be able to receive the full 18 week entitlement to Government-funded Parental
Leave Pay. Eligible working mothers whose employer-provided primary carer pay
is less than the full 18 weeks of Government-funded Parental Leave Pay will
receive the residual amount in Government-funded Parental Leave Pay. The
amendment particularly promotes the right to equality for the last two groups of
working parents.
The changes detailed in the Fairer Paid Parental Leave Bill 2016 do not interfere
with the existing rights and protections under the Fair Work Act 2009, including
access to 12 months of unpaid parental leave. The continuation of the Paid
Parental Leave scheme remains a clear reminder that it is appropriate and
desirable to take time out from the workplace to care for a newborn or newly adopted
child.
Evening out the access to paid maternity leave is considered reasonable and
proportionate as it contributes savings to other measures that are beneficial to
women. Targeting expenditure remains an essential part of balancing the
distribution of available resources with the most effective measures for
addressing barriers and creating opportunity.
Conclusion
This Schedule is compatible with human rights and, to the extent that it may limit
certain human rights, those limitations are reasonable, necessary and proportionate.
It does not disturb the existing safety net, focuses support on those working women
who need it most, while assisting the Government to increase investment from within
available resources in measures such as better childcare support to more effectively
advance the relevant rights.
7
Statements of compatibility with human rights
Schedule 2 - Employer opt-in
This Schedule is compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Schedule
This Schedule makes amendments to the employer role in the Paid Parental Leave
Act 2010. The amendments will remove the requirement for employers to provide
Government-funded Parental Leave Pay to their eligible long-term employees. From
the first 1 January, 1 April, 1 July or 1 October to occur after this Bill receives Royal
Assent, employees will be paid directly by the Department of Human Services,
unless an employer opts in to provide Parental Leave Pay to its employees and an
employee agrees for their employer to pay them.
Human rights implications
The amendments to the Paid Parental Leave scheme under Schedule 2 are likely to
engage the following human rights:
The right to social security
Article 9 of the International Covenant on Economic, Social and Cultural Rights
(ICESCR) recognises the right of everyone to social security. This right requires a
social security system to be established and that States Parties must, within their
maximum available resources, ensure access to a social security scheme that
provides a minimum essential level of benefits to all individuals and families that will
enable them to acquire at least essential health care, basic shelter and housing,
water and sanitation, foodstuffs, and the most basic forms of education. Payments
under the Paid Parental Leave scheme engage the right to social security, and the
amendments to the employer paymaster role under this Bill do not limit the essential
level of benefits required as part of that right.
Payments under the Paid Parental Leave scheme are currently considered to
provide an adequate social security benefit. The amendments in this Schedule do
not affect eligibility for Parental Leave Pay or the entitlement to paid or unpaid leave
from employment before or after the birth of the child. The amendments also do not
affect the rate of pay, which is consistent regardless of whether an employee's
Parental Leave Pay is paid by their employer or by the Department of Human
Services.
Under the amendments, in place of the current mandatory requirement that
employers pass on Parental Leave Pay to their long-term employees, employers and
employees would need to agree to this payment arrangement. Similarly, there will
still be capacity to make salary sacrifice deductions against Parental Leave Pay
payments where employers and employees agree.
8
Statements of compatibility with human rights
The ability to make deductions for salary sacrificing is unique to Parental Leave Pay
amongst all government payments, given the Parental Leave Pay employer
paymaster role. This policy allows employers to apply the same treatment to
Parental Leave Pay payments they administer on behalf of the Government as for
the payment of salary and wages, if they so wish and can afford to do so. The ability
for an employee to reduce the tax liability for their Parental Leave Pay payment
through salary sacrificing is not guaranteed even under current arrangements.
Therefore, there is no limitation to the right to social security as these amendments
do not limit this essential level of benefit or limit access to the scheme, and allow the
continuation of salary sacrifice arrangements where the employer opts in and
agrees.
Right to work and maternity leave
Article 7 of the ICESCR recognises the right of everyone to the enjoyment of just and
favourable conditions of work. This Article seeks to ensure fair and equal wages and
remuneration, safe and healthy working conditions, equal opportunity for promotion
in the workplace, and adequate access to rest, leisure, and periodic paid leave.
Article 10(2) of the ICESCR further states that, 'Special protection should be
accorded to mothers during a reasonable period before and after childbirth. During
such a period working mothers should be accorded paid leave or leave with
adequate social security benefit.'
In addition, Article 11 (2)(b) of the Convention to Eliminate All Forms of
Discrimination Against Women (CEDAW) requires States Parties 'to introduce
maternity leave with pay or with comparable social benefits without loss of former
employment, seniority or social allowances.'
Payments under the Paid Parental Leave scheme do not engage the right to just and
favourable conditions at work as they are a Government payment which is provided
on the basis of past labour force participation in addition to other non-work related
eligibility criteria. Access to Parental Leave Pay is not a condition of employment
and receipt of Parental Leave Pay through an employer does not ensure the
continuation of salary sacrifice deductions.
Despite the Paid Parental Leave scheme not engaging the right to just and
favourable conditions at work, access to the scheme encourages the continuing
participation of women in the labour force (either as an employee or in another
capacity such as self-employment). Generally, a working parent cannot work during
the Paid Parental Leave period if they wish to remain eligible for payment, however
limited participation is allowed through the use of 'keeping-in-touch' days.
The changes to the mandatory employer paymaster role do not limit the existing right
to access 12 months of unpaid parental leave, nor will the measure affect other
standards or protections contained within the Fair Work Act 2009.
9
Statements of compatibility with human rights
Right to equality and non-discrimination
Article 2 of the ICESCR recognises the right to non-discrimination based on race,
colour, sex, language, religion, political or other opinion, national or social origin,
property, birth or other status. Article 3 seeks to ensure the right of both men and
women to the enjoyment of all economic, social, and cultural rights set forth within
the convention.
As outlined above, the amendments do not limit the right to social security. As the
enjoyment of the right to social security is not limited by the amendments, this Bill
also does not limit the rights to equality and non-discrimination.
Conclusion
This Schedule is compatible with human rights as it promotes the protection of
human rights.
[Circulated by the authority of the Minister for Social Services,
the Hon Christian Porter MP]
10