Paid Parental Leave Scheme

The government has announced that it will introduce a Paid Parental Leave scheme for parents in respect of births and adoptions that occur on or after 1 January 2011. Parents will be able to lodge claims from 1 October 2010. The scheme will provide 18 weeks postnatal leave paid at the federal minimum wage (currently $543.78 per week).

To be eligible for the scheme, a parent in paid work:

• must have worked continuously with one or more employers for at least 10 of the 13 months before the expected date of birth or adoption;
• must have worked at least 330 hours in those 10 months (equivalent to around one full day of work each week); and
• must have an adjusted taxable income of $150,000 or less in the financial year prior to the date of birth or adoption of the child.

Parents who are eligible for Paid Parental Leave will be able to continue to access employer funded leave (maternity leave and recreation leave) around the time of the birth or adoption of a child.

Paid Parental Leave will be available to contractors, casual workers and the self-employed. Payments made under the scheme will be taxable. Parents who receive paid parental leave will not receive the Baby Bonus (except in the case of twins or multiple births), or FTB Part B, during the 18 week Paid Parental Leave period. Mothers and primary carers not in full-time paid work will continue to receive the current forms of family assistance (including the Baby Bonus), if they meet the relevant eligibility requirements.

Superannuation payments will not initially be introduced for the Paid Parental Leave. Its introduction will be considered as part of a comprehensive review of scheme, within three years after the scheme's implementation.