On 8 February 2017, the Federal Government introduced the Social Services Legislation Amendment (Omnibus Savings And Child Care Reform) Bill 2017 (“the Bill”) into the Parliament.

The Bill deals with a wide range of changes to income and family support payments. The Government is seeking crossbench support in the Senate for the whole package, but will approach the Bill on a win-some, lose-some basis, knowing that at least some of the changes will get through.

Schedule 17 of the Bill deals with changes to the Paid Parental Leave Scheme (“PPLS”).

Schedule 18 of the Bill deals with removing the mandatory role of employers as “paymasters” in the PPLS.

Schedule 17 of the Bill

As the Explanatory Memorandum to the Bill sets out:

Currently the PPLS 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 PPLS are made irrespective of whether an individual receives employer-provided paid primary carer leave and regardless of the amount of such payments.

Pursuant to the Bill:

  • to offset the fact some parents will be entitled to less parental leave pay as a result of its amendments, the maximum parental leave pay period will be increased to 20 weeks.
  • Parents who lodge a claim before the birth of a child, or a child entering their care must now inform the Secretary of the Department of Human Services (as a delegate of the Secretary of Social Services) (“the Secretary”) of any primary carer pay they are entitled to from their employer. The paid parental leave period of a person will then be proportionately reduced by the length of the paid primary carer leave period they are entitled to from their employer.
  • If a person receives 20 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 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 20 weeks) and the National Minimum Wage for that period.

The Government has argued that 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 made to better target the PPLS and ensure working parents have access to at least 20 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.

The Bill’s Schedule 17 will commence on the first 1 January, 1 April, 1 July or 1 October that occurs 9 months after the Bill receives Royal Assent, with an earliest commencement date of 1 January 2018.

Schedule 18 of the Bill

As the Explanatory Memorandum to the Bill sets out:

Currently under the PPLS, in the majority of cases, employers are required to provide parental leave pay to their eligible long-term employees. The Secretary 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.

To ease administrative burdens on business, the PPLS will be amended by the Bill 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 9 months after the Bill receives Royal Assent, with an earliest commencement date of 1 January 2018, 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 Bill is subject to amendment in the Senate.