Who pays for Paid Parental Leave?

Paid parental leave is funded by the Federal Government. However, for many employees, it will be paid by their employer who, in turn, receives funding for the payments directly from the Government.

From 1 July 2011, the employer must provide the parental leave pay to employees who:

  • have worked for the employer for at least 12 months before the birth or adoption of the child
  • are Australian-based employees, and
  • are entitled to at least eight weeks of paid leave.

In other cases, the Family Assistance Office (FAO) will continue to provide the payment.

When does the entitlement cease?

On return to work

The entitlement to paid parental leave ceases once an employee returns to work. A person returns to work if they perform one hour or more hours of paid work on a single day. This means that if an employee performs even a single hour of paid work, they cease to be eligible. If they are already receiving payments at the time they return to work, their entitlement to any remaining weeks' benefit ceases from the time they perform the work.

However, employees are entitled to 10 'keeping in touch' days while on leave. A keeping in touch day is a working day that allows an employee to keep in touch with their place of work or that facilitates their return to work after their leave. Training or planning days and conferences are examples of 'keeping in touch' activities. Ordinary work activities are not 'keeping in touch' days.

If you are relying on the National Employment Standards (NES) entitlement to 12 months unpaid parental leave

An employee who returns to work for a 'keeping in touch day' may lose their entitlement to 12 months' unpaid parental leave under the National Employment Standards - and the protections that go with it, such as the right to return to their substantive role. This is because the NES requires unpaid parental leave to be taken in a single continuous block. A 'keeping in touch day' may break the single continuous block.

The Federal Government has announced plans to amend the NES to allow employees to take 'keeping in touch days' without affecting their NES entitlement. In the interim, employees should:

  • ensure that if they plan to undertake ad hoc work it falls within the definition of 'keeping in touch', and/or
  • avoid any paid work if they are relying on the 12 month unpaid parental leave provisions in the NES.

Childcare arrangements

Employees should also be mindful that full-time child care may impact on their entitlement. The claimant must remain the child's primary carer. Care of the child cannot be allocated to another person or organisation for more than a reasonable period. The consideration of what is reasonable includes respite for the primary carer. However, a person is likely to cease being the primary carer if the child is in child care for a substantial amount of time. If they cease to be eligible, their entitlement to payments also ceases.

Where can I get more information?
If you are a member of a union they may be able to assist you with more detailed information.
Information about the scheme is available on the government website:  http://www.humanservices.gov.au/customer/services/centrelink/paid-parental-leave-scheme.
If you are experiencing employment difficulties arising from your parental leave, our Maurice Blackburn's employment lawyers can provide advice.  Call us on 1800 810 856 or send us a message via the 'contact us' section.

Where can I get more information?

If you are a member of a union they may be able to assist you with more detailed information.

Information about the scheme is available on the government website: http://www.humanservices.gov.au/customer/services/centrelink/paid-parental-leave-scheme.

If you are experiencing employment difficulties arising from your parental leave, our Maurice Blackburn's employment lawyers can provide advice.  Call us on 1800 810 856 or send us a message via the 'contact us' section.