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