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2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PAID PARENTAL LEAVE AMENDMENT
(IMPROVEMENTS FOR FAMILIES AND GENDER EQUALITY) BILL 2022
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Social Services, the Hon Amanda Rishworth MP)
PAID PARENTAL LEAVE AMENDMENT
(IMPROVEMENTS FOR FAMILIES AND GENDER EQUALITY) BILL 2022
OUTLINE
This Bill amends the Paid Parental Leave Act to make the payment more accessible,
more flexible and gender-neutral. The amendments will:
• Extend parental leave pay from 18 weeks to 20 weeks from 1 July 2023, with
two weeks reserved on a 'use it or lose it' basis for each claimant. Parents who
are single at the time of their claim will be able to access the full 20 weeks. This
extension is a result of combining the current maximum of 18 weeks of parental
leave pay with the current 2 weeks of dad and partner pay. Dad and partner
pay will be abolished.
• Remove the notion of 'primary', 'secondary' and 'tertiary' claimants and the
requirement that the primary claimants of parental leave pay must be the birth
parent, allowing families to decide who will claim first and how they will share
the entitlement. The permission requirements applying to claims other than by
the birth parent in Division 2 of Part 2-4 of the Paid Parental Leave Act will be
revised accordingly, including distinguishing between permission to make a
claim and permission to claim days.
• Make paid parental leave consist only of flexible PPL days, allowing claimants
to take the payment in multiple blocks, as small as a day at a time, within two
years of the birth or adoption, and remove the requirement to not return to work
in order to be eligible.
• Introduce a $350,000 family income limit, under which families can be assessed
if they do not meet the individual income test.
• Expand eligibility to allow an eligible father or partner to receive parental leave
pay regardless of whether the birth parent meets the income test, residency
requirements or is serving a newly arrived resident's waiting period.
Financial impact statement
The measures in this Bill relate to the first tranche of changes to implement what was
announced as part of the October 2022-23 Budget, and have an estimated cost of
$531.6 million over the forward estimates.
MEASURE FINANCIAL IMPACT OVER THE
FORWARD ESTIMATES
Schedule 1 - Main amendments $531.6 million
1
This financial impact includes impacts for Services Australia, in relation to the costs of
Information and Communications Technology development and implementation.
REGULATION IMPACT STATEMENT
The regulation impact statement appears at the end of this explanatory memorandum.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
The statement of compatibility with human rights appears at the end of this explanatory
memorandum.
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PAID PARENTAL LEAVE AMENDMENT
(IMPROVEMENTS FOR FAMILIES AND GENDER EQUALITY) BILL 2022
NOTES ON CLAUSES
Abbreviations and acronyms used in this explanatory memorandum
• Paid Parental Leave Act means the Paid Parental Leave Act 2010;
• Paid Parental Leave Rules means the Paid Parental Leave Rules 2021.
Clause 1 sets out how the new Act is to be cited - that is, as the Paid Parental Leave
Amendment (Improvements for Families and Gender Equality) Act 2022.
Clause 2 describes the commencement of the provisions in this Act. It provides a table
setting out the commencement dates of the various sections in, and Schedules to, the
new Act. The whole of the Act will commence on 26 March 2023, to allow early claims
to be made based upon the new rules.
Clause 3 provides that each Act that is specified in a Schedule is amended or repealed
as set out in that Schedule, and any other item in a Schedule to this Act has effect
according to its terms.
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Schedule 1 - Main amendments
Schedule 1 - Main amendments
Summary
This Bill amends the Paid Parental Leave Act to make the payment more accessible,
more flexible and gender-neutral. The amendments will:
• Extend parental leave pay from 18 weeks to 20 weeks from 1 July 2023, with
two weeks reserved on a 'use it or lose it' basis for each claimant. Parents who
are single at the time of their claim will be able to access the full 20 weeks. This
extension is a result of combining the current maximum of 18 weeks of parental
leave pay with the current 2 weeks of dad and partner pay. Dad and partner
pay will be abolished.
• Remove the notion of 'primary', 'secondary' and 'tertiary' claimants and the
requirement that the primary claimants of parental leave pay must be the birth
parent, allowing families to decide who will claim first and how they will share
the entitlement. The permission requirements applying to claims other than by
the birth parent in Division 2 of Part 2-4 of the Paid Parental Leave Act will be
revised accordingly, including distinguishing between permission to make a
claim and permission to claim days.
• Make paid parental leave consist only of flexible PPL days, allowing claimants
to take the payment in multiple blocks, as small as a day at a time, within two
years of the birth or adoption, and remove the requirement to not return to work
in order to be eligible.
• Introduce a $350,000 family income limit, under which families can be assessed
if they do not meet the individual income test.
• Expand eligibility to allow an eligible father or partner to receive parental leave
pay regardless of whether the birth parent meets the income test, residency
requirements or is serving a newly arrived resident's waiting period.
Background
Extending parental leave pay
Currently, a parental leave pay claimant may claim an initial period of up to 12 weeks
(which equates to 90 payable days), called the PPL period, under the requirement of
continuous eligibility. They forfeit any remaining PPL period entitlement if they return
to work between the date of birth and the end of the PPL period. Additionally, the
claimant may claim 6 weeks (30 payable days) of flexible paid parental leave. Flexible
PPL days may be claimed on an ad hoc basis as days of care for the child are
identified.
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Schedule 1 - Main amendments
Parental leave pay can currently be received by birth parents and adoptive parents as
primary claimants, and the other parent of the child and partners of a parent of the
child as secondary claimants.
Dad and partner pay is currently paid to eligible fathers, partners of the birth parent
and adoptive parents of a child and consists of 2 weeks of minimum wage equivalent.
Claimants can receive parental leave pay before, after or at the same time as
employer-provided leave.
This Bill combines the 2 weeks of dad and partner pay with the current maximum 18
weeks of parental leave pay, extending parental leave pay to 20 weeks (100 payable
days). Dad and partner pay will be abolished as a result.
Reserved 'use it or lose it' period
Two weeks of parental leave pay will be reserved on a 'use it or lose it' basis for each
claimant.
Generally, claimants who are partnered at the time they first claim parental leave pay
will be able to receive a maximum of 18 weeks of parental leave pay each, with a
maximum of 20 weeks between them per child. A claimant who does not have a
partner at the time of the claim will be able to receive a maximum of 20 weeks of
parental leave pay per child. A person will be considered partnered if they are in a de
facto or registered relationship or if they are married. A person will be considered not
partnered if they are single, separated, divorced or widowed.
The Paid Parental Leave Rules will be able to prescribe circumstances in which a
person who is partnered at the time of their first claim for parental leave pay for a child
will be able to receive a maximum of 20 weeks of parental leave pay.
PPL claimants in exceptional circumstances will be able to receive a maximum of 20
weeks of parental leave pay per child, in addition to any parental leave pay entitlement
previously received by claimants who claimed in circumstances which were not
exceptional. These claimants can choose to share the entitlement with their partner,
to a maximum of 20 weeks of parental leave pay.
Special PPL claimants will be able to receive the balance of any parental leave pay
for the child not taken by previous claimants, up to a maximum of 20 weeks.
A person can never receive more than 20 weeks of parental leave pay for a child.
Parental leave pay can only be received once in cases of multiple births: see section
20 of the Paid Parental Leave Act.
Examples of maximum entitlements
Single parent
Susie is a sole parent via IVF. She can receive a maximum of 20 weeks of parental
leave pay.
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Schedule 1 - Main amendments
Partnered parents
Jessica and Ted are in a de facto relationship. They can each receive a maximum of
18 weeks of parental leave pay with a maximum of 20 weeks between them per
child.
Separated birth parents, one birth parent re-partnered
Katrina and James separated shortly after they learned they were expecting a child,
and James has since re-partnered with Sarah. As Katrina is separated at the time
she claims parental leave pay, she can receive a maximum of 20 weeks. James and
Sarah are partnered so they can each receive a maximum of 18 weeks of parental
leave pay. Between Katrina, James and Sarah, a maximum of 20 weeks of parental
leave pay can be received for the child
PPL claimant in exceptional circumstances:
When their child is born, Jessica and Ted are married so can each receive a
maximum of 90 days of parental leave pay for the child. Jessica receives 4 weeks of
parental leave pay and Ted receives one week.
Jessica passes away unexpectedly. Ted claims parental leave pay as a PPL
claimant in exceptional circumstances. He can now receive a maximum of 20 weeks
of parental leave pay for the child. As he has already received one week, he has 19
weeks of parental leave pay remaining.
Special PPL claimant in exceptional circumstances
Susie receives 10 weeks days of parental leave pay for her child. Susie suddenly
has a medical emergency, and is kept in hospital for treatment so is unable to care
for her child for at least 26 weeks.
Susie's sister, Jen takes over caring responsibilities for the child. She claims parental
leave pay as a special PPL claimant in exceptional circumstances. Jen can receive a
maximum of 10 weeks of parental leave pay for the child, the balance of the
entitlement not already received by Susie.
Gender-neutral claiming
The Paid Parental Leave Act currently distinguishes between primary, secondary and
tertiary claims and claimants. This Bill removes this distinction to allow fathers and
partners to claim parental leave pay without requiring the birth parent to make a claim.
To reflect this change, the terms 'primary claim', 'primary claimant', 'secondary claim',
'secondary claimant', 'tertiary claim' and 'tertiary claimant' will be replaced by the terms
'PPL claim', 'PPL claimant', 'special PPL claim' and 'special PPL claimant'.
A PPL claim can be made by the following people:
• The child's birth parent
• An adoptive parent of the child
• A person who is a parent of the child but is not the birth parent
• The partner of the child's birth parent
• The partner of an adoptive parent of the child
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Schedule 1 - Main amendments
• The partner of a person who is a parent of the child but is not the birth parent
• A person who makes a PPL claim in exceptional circumstances, as currently
described in section 26 and section 27 of Paid Parental Leave Rules.
After a person makes a PPL claim, a special PPL claim can be made by the following
people:
• A partner of a person who makes a PPL claim in exceptional circumstances.
• A person who makes a secondary claim in exceptional circumstances, as
currently described under the Paid Parental Leave Rules. (The terminology of
'secondary claim' in the Paid Parental Leave Rules will be updated to 'special
PPL claim' once this Bill passes.) The child must not have been entrusted to
the person's care or the care of their partner because of a decision of a state or
territory child protection agency under its relevant legislation. The person must
have and expect to continue to have the care of the child for at least 26 weeks.
Other criteria outlined in section 28 of the Paid Parental Leave Rules must also
apply.
• A person who makes a tertiary claim, as currently described under the Paid
Parental Leave Rules. (The terminology of 'tertiary claim' in the Rules will be
updated to 'special PPL claim' once the Bill passes). The child must not have
been entrusted to the person's care or the care of their partner because of a
decision of a state or territory child protection agency under its relevant
legislation. The person must have and expect to continue to have the care of
the child for at least 26 weeks. Other criteria outlined in section 29 of the Paid
Parental Leave Rules must also apply. It will still be possible for a birth parent
or adoptive parent who has previously claimed parental leave pay for the child
to claim again where they have resumed primary care of the child.
Permission process for making claims and claiming days
The currently enacted concept of permission to claim flexible PPL days for a child will
be changed by the Bill to distinguish between permission to make a claim and
permission to claim days.
Consistent with the current concept of permission, the birth parent, initial claimant
adoptive parent or initial PPL claimant in exceptional circumstances may change or
revoke their permission to make a claim or permission to receive parental leave pay
for days at any time.
Permission to make a claim
Permission to make a claim will be required in order for a person who is not the birth
parent or an adoptive parent to make an effective claim for parental leave pay. For
claims in exceptional circumstances, the initial claimant will not require permission to
make a claim, but another person connected to the initial claimant would need
permission to make a claim (i.e. partner of a 'PPL claimant'). A PPL claimant in
exceptional circumstances can only make a claim if the birth parent is incapable of
caring for the child for at least 26 weeks. An example is where a birth parent passes
away or is incapacitated and cannot provide permission.
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Schedule 1 - Main amendments
Permission to make a claim can be revoked, such that the person will no longer be
able to claim any more parental leave pay days for the child.
The Paid Parental Leave Rules may prescribe circumstances in which a person who
makes a PPL claim will not require permission from the birth parent to make an
effective claim.
Permission to claim days
The permission to claim days will be similar to the concept of permission currently
covered by section 17D, which allows a person to stipulate how many days of parental
leave pay another person can receive. Unlike the current concept of permission,
permission to claim days under the Bill will apply to a specified person. The following
people will need to provide or receive permission to claim days to be payable for the
parental leave pay days claimed:
• Permission from a birth parent for another parent of the child, the partner of the
birth parent or the partner of the other parent;
• Permission from the initial claimant adoptive parent for the other adoptive
parent or partner of one of the adoptive parents. Where an adoptive parent has
not made a claim, a partner of one of the adoptive parents will need to nominate
an adoptive parent to give permission;
• Permission from a PPL claimant in exceptional circumstances for another
person to claim where relevant. Where a birth parent is incapacitated and
another person is caring for the child, that carer can provide permission for their
partner to claim. For example, a grandmother who is caring for her grandchild
due to her daughter's terminal illness, can provide permission to the grandfather
to claim parental leave pay.
The Paid Parental Leave Rules may prescribe circumstances in which a PPL claimant
will not require permission to claim days in order to be payable for parental leave pay.
Permission to claim days can be revoked for future days, including days that are
payable, but cannot affect past days that have already been paid.
Other arrangements
A person cannot be found payable for a number of days greater than the number of
days they have permission to claim. They may request permission to claim more days.
If a person has been paid for a day for which they are later found not to have been
eligible (e.g. because they were working or not caring for the child), the claimant will
have permission to claim that day on a different date.
Paid Parental Leave consisting only of flexible PPL days
To allow claimants to use their parental leave entitlements in a way that works best for
them, paid parental leave will consist only of flexible PPL days. This means parents
can take paid parental leave in blocks as small as a day at a time, with periods of work
in between, during the period starting the day the child is born and ending on the day
before the child's second birthday or anniversary of care.
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Schedule 1 - Main amendments
While the Paid Parental Leave Act currently does not allow days of parental leave pay
for the same child to be taken concurrently, the two week dad and partner pay
entitlement can be taken at the same time as parental leave pay. The Bill will allow
eligible claimants to take a maximum of two weeks parental leave pay (10 payable
days) concurrently. This will assist parents to share caring responsibilities, and provide
an opportunity for dads and partners to also provide care for birth parents to support
their health.
Concurrency will be limited to ensure that parents are encouraged to return to work. It
will also prompt fathers and partners to take on independent care of the child, which
international studies have demonstrated develops patterns of care that persist
throughout the child's life.
The Paid Parental Leave Rules may prescribe circumstances in which a day of
parental leave pay will not count towards the maximum number of concurrent days.
Flexibility will be further increased by allowing parents to claim parental leave pay for
up to 100 days prior to the day the claim is made, increasing this period from the
current limit of 42 days.
Changes to eligibility
A person is eligible for parental leave pay if, among other things, they satisfy the work
test, the income test and the residency test. Eligibility for parental leave pay may also
be affected if the person is subject to a newly arrived resident's waiting period.
Given the changes to allow for gender-neutral claiming, the criteria relating to the
income test, residency test and newly arrived resident's waiting period for all claimants
will become aligned with the relevant criteria for birth parents. Some of the existing
criteria relating to the work test for fathers and partners will remain the same. These
are explained in further detail with reference to the relevant amending items.
Income test
Division 4 of Part 2-3 provides for the income test. A claimant's adjusted taxable
income for the reference income year is currently assessed using an individual income
test.
The Bill introduces a family income test for persons who fail the individual income test,
regardless of whether or not they are partnered at the time of their first effective claim.
This ensures that persons in comparable circumstances are treated equitably when
assessing eligibility for parental leave pay. For example, both single parents and
partnered parents who do not meet the individual income test, but do meet the family
income test, can be eligible for parental leave pay. Similarly, a person can be eligible
for parental leave pay if they meet the individual income test but do not meet the family
income test when their partner's income is included in the assessment.
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Schedule 1 - Main amendments
The family income limit is $350,000 and will be indexed annually from 1 July 2024,
taking into account the Consumer Price Index. The individual income limit will continue
to be indexed annually on 1 July.
Work test
Division 3 of Part 2-3 provides for the work test. To meet the work test, a person must
have performed at least 330 hours of qualifying work over a period of at least 295
consecutive days within the claimant's work test period. A claimant performs qualifying
work on a day if the claimant either performs at least one hour of paid work or takes
at least one hour of paid leave on that day. The work test period for claimants other
than COVID-19 affected claimants is the 392 day period prior to the expected or actual
date of birth or placement of the child for adoption. COVID-19 affected claimants have
a work test period of 600 days.
Fathers and partners will be able to receive parental leave pay if both they and the
birth parent or adoptive parent meet the work test. This is consistent with the current
arrangements in the Paid Parental Leave Act.
Employer determinations
Parental leave pay is provided to eligible long-term employees by their employer
where the following criteria are met:
• The employee has worked for the employer for at least 12 months before the
expected date of birth or adoption;
• The employee will be their employee for the period they are receiving parental
leave pay from their employer;
• The employee lives in Australia; and
• The employee expects to get at least 8 weeks of parental leave pay.
Where the employer does provide parental leave pay, it is provided directly by
Services Australia.
Employer determinations require employers to pay the person instalments of parental
leave pay. Since paid parental leave will consist only of flexible PPL days, employer
determinations will only be made in respect of a continuous flexible period. A
continuous flexible period consists of at least 40 flexible PPL days that are consecutive
and are week days.
The Bill ensures employer determinations will only be made for a continuous flexible
period of at least 40 consecutive week days that fall before the child's first birthday or
anniversary of care, and there are no other parental leave pay days payable prior to
this period. An employer determination will be revoked if the claimant is no longer
payable for any week days in the continuous flexible period. This may occur because
either the claimant chooses to revoke a day, or they are found not to be eligible on a
day. An employer determination will also be revoked if the claimant is found payable
on a weekend day within the continuous flexible period. Subsequent parental leave
pay instalments will be paid by the Secretary. These changes are designed to
minimise the administrative burden on employers by providing more certainty in the
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Schedule 1 - Main amendments
number of days they are liable to pay parental leave pay and by keeping the employer
determination arrangements as consistent with current arrangements as possible.
Explanation of the changes
Extending parental leave pay
No fixed PPL period
These amendments will repeal the currently central concept of a fixed 12 week PPL
period, leaving only provisions providing for flexible paid parental leave. Division 2 of
Part 2-1 provides for the concept of the payability determination setting a person's PPL
period. This Division is repealed by item 39.
Other references to the PPL period and to determinations setting such a period are
consequentially repealed.
Item 52 repeals paragraph 24(b) relating to giving notice of a determination.
Item 53 repeals paragraphs 25(1)(a) to (c) to substitute wording relating solely to
flexible PPL, and remove references to a person's PPL period or a determination
setting such a period. Item 207 consequentially removes a cross reference to
paragraph 25(1)(c) from subparagraph 215(2)(a)(ii).
Item 54 repeals section 26 which relates only to initial eligibility determinations for a
PPL period. Item 56 repeals the reference to section 26 from paragraph 26A(b). Item
158 omits a reference to section 26 in subparagraph 101(1)(a)(ii) and substitutes a
reference to section 26A.
Item 59 repeals section 31 which relates only to eligibility for parental leave pay for a
PPL period. Item 13 consequentially amends the definition of 'eligible' in section 6, to
refer only to section 31AA. Item 74 consequentially amends subsections 31A(7) and
(7A) to remove reference to subsection 31(6). Item 214 consequentially amends
subsection 277(1) relating to rules where a child is stillborn or dies to remove reference
to section 31.
Item 67 repeals subsections 31A(5) and (6), which relate only to the application of the
newly arrived resident's waiting period for a person with a PPL period. Item 71 repeals
paragraphs 31A(6B)(a) to (c) to remove reference to previous determination provisions
for a PPL period, which relates also to exceptions from the newly arrived resident's
waiting period for a person with a PPL period. Item 72 omits reference to the person's
PPL period from paragraph 31A(6B)(d).
Item 91 repeals paragraph 34(1)(c) which prescribes a day in a person's PPL period
for a previous child as a day of qualifying work. In part, items 99 and 100
consequentially amend paragraph 35B(2)(a) and paragraph 35C(2)(c) to remove
cross references to this paragraph.
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Schedule 1 - Main amendments
Item 92 removes from the heading to section 35A mention of a day in a PPL period,
and substitutes reference to a flexible PPL day.
Item 93 repeals and substitutes subsection 35A(1) to, in part, remove mention of a
PPL period. The amendment also corrects an anomaly where a flexible PPL day was
not counted as a day of qualifying work, and provides that it represents 7.6 hours of
work on that day.
Item 94 omits from the heading to subsection 35A(2) mention of paid work in a
previous PPL period. Item 95 omits reference to a PPL period in the calculation of
hours of work in a previous period from paragraph 35A(2)(b), and substitutes reference
to a flexible PPL day. This amendment also corrects an anomaly where a flexible PPL
day was not counted as a day of qualifying work. Item 96 repeals the note to this
subsection.
Item 97 similarly amends the heading to subsection 35A(3) to omit reference to a
previous PPL period and substitutes reference to a flexible PPL day. Item 98 similarly
removes reference to a PPL period in paragraph 35A(3)(b) and substitutes reference
to a flexible PPL day. This also corrects an anomaly where a flexible PPL day was not
counted as a day of qualifying work.
Item 119 repeals paragraph 55(1)(b) which sets a requirement that a claim include a
nominated start date for the PPL period in order to be effective. Item 121 repeals
section 57 which provides for how to nominate a start date.
Item 122 repeals the note to subsection 57A(1), which provides that a claim that also
specifies one or more days that are not flexible PPL days for the child can still be an
effective claim.
Item 127 repeals subsection 60(1), which deals with when to claim in respect of a PPL
period. This leaves section 60 to only deal with claims for flexible PPL days. Item 128
consequentially omits reference to '(2)' as section 60 will have only one subsection.
Item 130 amends the guide to Part 3-1 relating to instalments of parental leave pay at
section 62 to remove reference to a PPL period, and leave only reference to one or
more flexible PPL days within an instalment period.
Item 131 amends subsection 63(3) about when an instalment is payable to remove
mention of a PPL period and only reference flexible PPL days.
Item 132 repeals and replaces subsection 65(1) to deal only with flexible PPL days.
Item 138 amends section 71 which provides a guide to Part 3-2 relating to payment of
instalments by employers, to omit words relating to a person's PPL period from
paragraph (b) of that guide.
Item 140 repeals and substitutes subsection 72(1A) relating to when the employer is
to pay instalments to removing reference to PPL periods. Item 141 amends note 2 to
this subsection to also remove reference to a PPL period. Item 143 omits from
paragraphs 72(2)(a) and (b) to substitute references to a PPL period with a continuous
flexible period.
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Schedule 1 - Main amendments
Item 144 repeals paragraphs 77(2)(c) and (d) which relate only to PPL funding
amounts for PPL days in a PPL period.
Item 145 repeals and substitutes paragraphs 82(1)(f) and (g), relating to notice
obligations on employers, to remove reference to PPL periods. New paragraph 82(1)(f)
focuses on when the person performs more than one hour of work for the employer
during the person's continuous flexible period. New paragraph 82(1)(g) provides for
when the person ceases to be employed by the employer before the end of the
person's continuous flexible period. Item 146 amends subparagraph 82(3)(b)(i) to
similarly omit reference to a PPL period.
Item 148 amends paragraph 84(3)(b) relating to when the Secretary pays instalments
to omit reference to PPL period.
Item 150 amends subsection 85(2) relating to the Secretary becoming required to pay
instalments to omit reference to PPL period and substitute reference to the continuous
flexible period.
Item 151 amends section 87 relating to the Secretary paying arrears, to omit the words
PPL period from the heading to this section.
Item 153 amends the guide to Part 3-4 at section 90 regarding the rules relevant to
paying instalments, to omit reference to a PPL period.
Item 154 amends the heading to section 91 to omit PPL period. Item 155 similarly
amends paragraphs 91(a) and (c) to, in part, omit reference to a PPL period.
Item 156 repeals section 92 which relates only to PPL periods being extended after
review. Item 152 consequentially omits reference to section 92 from subsection 87(1).
Item 159 amends paragraph 101(1)(b) to refer to consecutive flexible PPL days. Item
161 removes reference to PPL days by repealing the note to subsection 101(1), which
provides that the 40 consecutive days mentioned in paragraph 101(1)(b) may consist
of PPL days for the person and flexible PPL days for the child. Item 160 repeals
paragraphs 101(1)(d) and (da) relating to making employer determinations, and
substitutes wording excluding reference to a PPL period. Item 162 repeals paragraphs
101(4)(a) and (b) which relates to a circumstance in which the Secretary may decide
not to make an employer determination, and substitutes wording excluding reference
to PPL periods and tertiary claimants.
Item 164 repeals and substitutes paragraphs 102(3)(b), (c), (d) and (da) which relate
to the content of a Secretary notice, to remove the requirement that the notice include
information about a PPL period and whether a payability determination has been made
in respect of a PPL period.
Item 165 repeals and substitutes subsection 104(3) relating to the content of an
employer acceptance notice, to remove the requirement the notice include information
about a PPL period.
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Schedule 1 - Main amendments
Item 166 repeals and substitutes paragraph 105(1)(c) relating to an employer giving
information after applying for review of a decision that they pay parental leave pay, to
remove reference to a PPL period.
Item 167 repeals and substitutes paragraph 107(3)(b) relating to when an employer
determination is in force, to remove reference to a PPL period.
Items 168 and 169 repeal and substitute subsections 108(1A), (1B) and paragraph
108(1C)(a) relating to revocation of an employer determination, to remove reference
to a PPL period, and substitute words relating to flexible PPL days. Item 171
consequentially omits reference to subsection 108(1B) from subsection 108(1D). Item
175 consequentially omits reference to subsection 108(1B) from the note to subsection
113(2).
Item 172 repeals and substitutes paragraph 112(a) about a parental leave pay
claimant's election that their employer pay their paid parental leave to remove
reference to a PPL period.
Item 174 amends paragraph 113(2)(b) relating to giving notice of a payability
determination, to remove reference to a PPL period.
Item 176 repeals paragraph 114(2)(b) as it refers only to specifying a PPL period.
Item 194 repeals paragraphs 166(3)(a) and (aa) relating to notice of debts of
parental leave pay as these paragraphs relate only to a PPL period. Item 195
repeals note 1 to this subsection, as it applies only where there is a PPL period. Item
196 consequentially changes current note 2 to be the only note to the subsection.
Item 197 repeals and substitutes subsection 168(3) which provides when a debt
arises, to remove wording relating only to a PPL period.
Extension of duration of flexible PPL and abolition of dad and partner pay
Item 177 repeals Chapter 3A which provides for dad and partner pay.
Many consequential amendments are made to omit references to dad and partner pay,
along with related defined terms such as DAPP claimant and DAPP period. These are
made by the items listed below.
The following items amend section 6, which contains the dictionary for the Paid
Parental Leave Act:
• Items 4 and 5, regarding the definitions of claim and claimant;
• Items 8, 9 and 10, regarding the definition of COVID-19 affected claimant;
• Item 11 repeals the definitions of dad and partner pay, DAPP claimant and
DAPP period;
• Item 12, regarding the definition of effective claim;
• Item 18, regarding the definition of income test;
• Item 21, regarding the definition of initial eligibility determination;
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Schedule 1 - Main amendments
• Item 22, regarding the definitions of maximum DAPP period, maximum DAPP
period end day, and maximum DAPP period start day;
• Item 23, regarding the definition of payability determination;
• Items 27 and 28, regarding the definitions of reference income year and
reference period;
• Item 31, regarding the definition of saved amount;
• Items 35 and 36, regarding the definition of work test and work test period.
The following items amend other various provisions in the Paid Parental Leave Act:
• Items 69 and 70, relating to the newly arrived resident's waiting period in
section 31A;
• Item 75, 76 and 77, relating to the work test method statement in section 32;
• Items 91 to 98, relating to the performance of qualifying work in sections 34
and 35A;
• Item 101 repeals section 36B, which provides that a parental leave pay
claimant satisfies the work test if they are eligible for dad and partner pay;
• Item 106 repeals a note to section 39 relating to the reference income year for
a DAPP claimant;
• Item 178, regarding the guide to Part 4-1, which contains information gathering
provisions;
• Item 180 repeals subsection 117(2) regarding information gathering in relation
to dad and partner pay, and items 181 and 182 similarly remove cross
references to this subsection;
• Item 183, relating to the provision of tax file numbers by the Commissioner of
Taxation in paragraph 123(a);
• Item 185 repeals paragraphs 124(2)(c) and (d), relating to when a person's tax
file number may be used. Item 184 consequentially amends paragraph
124(2)(b) to substitute a full stop at the end of the paragraph;
• Item 186, regarding the obligation to notify a change of circumstances in
section 125;
• Items 187, 188 and 189, relating to the requirement to repay instalments of
dad and partner pay in section 133;
• Item 190, relating to the Secretary's evidentiary certificate in section 138;
• Items 191 and 192, relating to the guide to Part 4-3, which deals with debts in
relation to the paid parental leave scheme, and the recovery of debts owing to
the Commonwealth;
• Item 193, relating to debts due to the Commonwealth under section 165;
• Item 198 repeals section 168A, which relates to dad and partner pay debts;
• Items 199 and 200, which deals with where the wrong person receives an
instalment of parental leave pay, a PPL funding amount or dad and partner pay;
• Item 201, relating to debts under the Data-matching Program (Assistance and
Tax) Act 1990 covered in section 171;
• Items 205 and 206 amend paragraphs 192(1)(a) and 192(2)(a) regarding
recovery from an authorised deposit taking institution;
• Item 208, relating to AAT first review of claimant decisions in section 215;
• Items 209, 210 and 211, regarding certain income test determinations not to
be changed on review which is dealt with in section 273;
• Items 217 and 218, relating to rules where a child is stillborn or dies;
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Schedule 1 - Main amendments
• Item 219 repeals Division 3A of Part 6-1, which describes how the Paid
Parental Leave Act applies to claims for dad and partner pay in prescribed
circumstances;
• Item 220 removes reference to dad and partner pay in the heading to Division
5 of Part 6-1. This Division deals with, among other things, the loss of dad and
partner pay on security grounds;
• Items 221, 222, 223, 224, 225, 226, and 227 relating to loss of dad and partner
pay on security grounds as dealt with in sections 278A, 278B and 278C;
• Item 228, relating to revoking a security notice from the Home Affairs Minister
under section 278H;
• Items 229 to 237, relating to nominees as dealt with in sections 279, 280, 281,
284A, 285, 286 and 289.
Allowing gender-neutral claiming
Unlike the existing formulation of the scheme, both parents will be able to claim
parental leave pay in their own right, rather than limiting fathers and partners to claim
only as a secondary claimant following a claim by the birth parent. Instead, a claim
may be a PPL claim or a special PPL claim. A special PPL claim will generally be
made in exceptional circumstances, and where another person has already claimed
parental leave pay in respect of the child.
Item 1 repeals and replaces section 3A, which outlines the objects of the scheme.
New Section 3A provides that the Paid Parental Leave Act establishes a paid parental
leave scheme for the payment of parental leave pay. The updated objects are to:
• signal that taking time out of the paid workforce to care for a child is part of the
usual course of life and work for both parents; and
• promote equality between men and women and balance between work and
family life; and
• provide financial support to parents caring for children, in order to:
o allow those parents to take time off work to care for the child after the
child's birth or adoption; and
o enhance the health and development of birth mothers and children; and
o encourage women to continue to participate in the workforce; and
o provide those parents with flexibility to balance work and family life; and
o increase the time that fathers and partners take off work around the time
of birth or adoption; and
o create further opportunities for fathers and partners to bond with their
child; and
o allow fathers and partners to take a greater share of caring
responsibilities and to support mothers and partners from the beginning.
New subsection 3A(3) states the financial support provided by the Paid Parental Leave
Act is intended to complement and supplement existing entitlements to paid or unpaid
leave in connection with the birth or adoption of a child.
Item 2 provides a new guide to the Paid Parental Leave Act at section 4 covering the
new rules.
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Schedule 1 - Main amendments
The following items amend various definitions in section 6:
• Item 4 replaces the definition of 'claim' to mean a PPL claim or special PPL
claim for parental leave pay for a child.
• Item 5 replaces the definition of 'claimant' to mean a person who is a PPL
claimant or special PPL claimant.
• Item 25 inserts a definition of PPL claim, referring to new subsection 53(2) and
PPL claimant, meaning a person who has made an effective PPL claim for
parental leave pay for a child. Item 26 repeals the definitions of primary carer,
primary claim and primary claimant.
• Item 32 repeals from the definitions of secondary claim and secondary
claimant. Item 34 repeals the definition of tertiary claim and tertiary claimant.
• Item 33 inserts a definition of 'special PPL claim, by reference to subsection
53(3) and 'special PPL claimant' which means a person who has made an
effective special PPL claim for parental leave pay for a child for which another
person has made a PPL claim.
Item 38 repeals and substitutes section 7, which provides a guide to Part 2-1, to reflect
the new rules relating to gender-neutral claiming.
Item 43 repeals paragraphs 11C(1), (b) and (c) dealing with the requirement that for
a determination that parental leave pay is payable, a person must claim, and
substitutes for reference to a primary, second and tertiary claim, references to an
effective PPL claim (in which case the claimant is a PPL claimant) and an effective
special PPL claim for parental leave pay for that day (in which case the person is a
special PPL claimant).
Item 44 repeals and substitutes section 11D. New section 11D removes the
complexity of the definitions of flexible PPL day and flexible PPL period resulting from
the need to identify the type of claimant and end of the expected PPL period, to
substitute a simpler definition of flexible PPL day only. A day is a flexible PPL day for
a child if the day occurs in the period that starts on the day the child is born and ends
on the day before the child's second birthday.
Item 45 repeals and substitutes the paragraph of the guide to Part 2-2 at section 12
beginning 'Division 2' to substitute wording setting out the new claiming rules. Item 46
and item 47 similarly amend the Guide in relation to Division 2A and Division 3.
Item 48 repeals Divisions 2 and 2A of Part 2-2, which previously provided for
determinations about PPL for a fixed PPL period, and determinations about parental
leave pay for a flexible PPL day, to now deal only with flexible PPL days.
New section 13 deals with a determination on a PPL claim. Under new subsection
13(1), a PPL claim is to be determined under new section 13 if a PPL claimant has
made an effective PPL claim for parental leave pay for a child, which specifies one or
more flexible PPL days for a child.
New subsection 13(2) outlines when parental leave pay is payable to the PPL claimant
for one or more claimed days. The Secretary must determine that parental leave pay
is payable to the PPL claimant for one or more of the claimed days if, when making
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Schedule 1 - Main amendments
the determination, the Secretary is satisfied the PPL claimant was or will be eligible
for parental leave pay on those days. Other requirements must be satisfied and these
differ slightly depending on whether the PPL claimant is covered by new subsection
13(3) or 13(4).
New subsection 13(3) applies if the PPL claimant is a parent (other than an adoptive
parent) of the child but not the child's birth parent, or is the partner of the birth parent
or a partner of the parent who is not the birth parent. For these persons to be payable,
the birth parent still needs to satisfy the work test in relation to the child. This
requirement is met if the birth parent has previously satisfied the work test in relation
to the child for an earlier claim.
New subsection 13(4) applies if the PPL claimant is an adoptive parent of the child if
a payability determination for parental leave pay is already in force in relation to
another adoptive parent of the child, or a partner of an adoptive parent of the child. A
partner of an adoptive parent is found payable if an adoptive parent, nominated by the
partner of an adoptive parent, satisfies the work test on the day the determination is
made: new paragraph 13(2)(c). The adoptive parent who is nominated to satisfy the
work test in this instance is the same adoptive parent who is nominated to provide
permission to claim days for a PPL claimant for the purposes of new section 15.
Additionally, for both categories described in new subsections 13(3) and 13(4), the
claimant needs to have been given permission to claim the number of days claimed
and this permission has not been revoked. The number of flexible PPL days already
payable in combination with the days claimed must also not exceed the days for which
the claimant has permission to claim. These are provided by new paragraphs 13(2)(d)
and (e).
For persons covered by subsection 13(3), this is a permission from the birth parent.
For persons covered by subsection 13(4), this is a permission from the first adoptive
parent of the child to whom parental leave pay is payable or an adoptive parent of the
child who is nominated by a partner of an adoptive parent to give permission.
Requirements on this permission to claim days is further addressed in new section 15.
The Paid Parental Leave Rules may prescribe circumstances in which this
requirement does not apply. This is a refinement of an existing permission process
already applying to claims for flexible PPL days.
If the Secretary makes a payability determination, they must specify the claimed days
for which parental leave pay is payable to the PPL claimant: new subsection 13(5).
If the Secretary is not satisfied of the matters allowing a payability determination to be
made for one or more of the claimed days, the Secretary must determine that parental
leave pay is not payable to the PPL claimant for those days.
However, if the PPL claimant has not previously satisfied the work and income tests
in relation to the child, and the Secretary is satisfied that they satisfy those tests, the
Secretary may determine that the claimant is conditionally eligible for parental leave
pay for other flexible PPL days for the child: new subsection 13(6). This is to ensure
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Schedule 1 - Main amendments
that those tests need only be met once by each PPL claimant, even if they make
multiple claims for parental leave pay.
New subsection 13(7) provides the Secretary must specify in a determination made
under new subsection 13(6) the claimed days for which parental leave pay is not
payable to the PPL claimant.
New section 14 deals with determinations on a special PPL claim. Under new
subsection 14(1), a special PPL claim is to be determined under new section 14 if a
special PPL claimant has made an effective special PPL claim for parental leave pay
for a child, which specifies one or more flexible PPL days for a child.
New subsection 14(2) provides that parental leave pay is payable to the special PPL
claimant for one or more of the claimed days if a payability determination under section
13 that parental leave pay for the child is payable to a PPL claimant is in force and the
special PPL claimant was or will be eligible for parental leave pay on the claimed days.
The special PPL claim does not have to specify the same days for which the PPL
claimant is payable.
If the special PPL claimant is the partner of a person who satisfies the circumstances
prescribed by the PPL rules as being exceptional circumstances in which a PPL claim
can be made, a permission must have been given to the special PPL claimant in
relation to the child under new subsection 15(2). The permission must not have been
revoked, and the number of flexible PPL days for which permission has been given to
the person to be paid parental leave pay in respect of flexible PPL days must not be
exceeded by the number of such days payable if the claim is determined as payable.
If the Secretary makes a payability determination, they must specify the claimed days
for which parental leave pay is payable to the PPL claimant under new subsection
14(3).
The Secretary must determine that parental leave pay is not payable to the PPL
claimant for those days if the Secretary is not satisfied of the matters allowing a
payability determination to be made for one or more of the claimed days. Additionally,
if the special PPL claimant has not previously satisfied the work and income tests in
relation to the child, and the Secretary is satisfied that they satisfy those tests on the
day the determination is made, the Secretary may determine that the special PPL
claimant is conditionally eligible for parental leave pay for other flexible PPL days for
the child. This is to ensure that those tests need only be met once by each special
PPL claimant, even if they make multiple claims for parental leave pay
Item 6 amends the definition of 'conditional eligibility determination' at section 6 to
refer to paragraphs 13(7)(b) or 14(4)(b).
New section 15 provides for the giving of permission to claim flexible PPL days in
respect of a child.
Permission for a PPL claimant to claim one or more flexible PPL days may be given
by the child's birth parent, the first adoptive parent for whom parental leave pay is
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Schedule 1 - Main amendments
payable, or an adoptive parent who is nominated by a partner of an adoptive parent of
the child: new subsection 15(1).
Permission for special PPL claimants to claim may be given by a person who satisfies
the exceptional circumstances prescribed by the PPL rules as circumstances in which
a claim may be made, where parental leave pay is payable to that person: new
subsection 15(2). These are likely to be circumstances similar to those in which a
secondary or tertiary claim may be made currently, such as where the initial claimant
is no longer able to care for the child.
New subsection 15(3) specifies the permission must be given to the Secretary in the
form approved by the Secretary, specify the number of flexible PPL days for the child
to whom the permission relates that may be claimed, and specify the person to whom
the permission is given.
Note 1 to new subsection 15(3) alerts the reader that subsection 31AB(2) provides for
the maximum number of flexible PPL days for a child that are payable.
Note 2 alerts the reader that the permission does not preclude the person giving the
permission from claiming parental leave pay for some or all of the specified number of
flexible PPL days for the child.
If a person gives a permission, they may subsequently vary the number of flexible PPL
days specified, or revoke the permission: new subsections 15(4) to 15(7). A variation
or revocation must be given to the Secretary in the form approved by the Secretary. If
a payability determination is already in force on the basis of the permission when the
permission is varied, the Secretary must vary the payability determination in respect
of future days to remove days that would exceed the number of days specified in the
permission as varied. The Secretary must determine that parental leave pay is not
payable in respect of those days.
Similarly, if a person revokes a permission given, this does not affect days that have
already occurred. However, the Secretary must vary the payability determination to
remove the days that have not yet occurred, and determine that parental leave pay is
not payable to the person for those days.
Notes to new subsections 15(6) and 15(7) alert the reader that subsections 13(5) and
(7) (for PPL claims) and 14(3) and (5) (for special PPL claims) provide that
determinations must specify the claimed days for which parental leave pay is payable
and not payable to a claimant.
Other consequential amendments are made to remove references to primary,
secondary and tertiary claimants and substitute the terms PPL claimant and special
PPL claimant, and references to the new determination sections. These are described
below.
Item 14 omits paragraphs (a), (b) and (c) from the definition of exceptional
circumstances which referred to primary, secondary and tertiary claims, to substitute
references to paragraph 54(1)(g) (which deals with PPL claims) or paragraph 54(2)(b)
which deals with special PPL claims.
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Schedule 1 - Main amendments
Item 40 amends section 11A to refer to new sections 13 and 14 as the basis upon
which a determination may be made for parental leave pay for a flexible PPL day for
a child to be payable to a person. Item 41 amends the note to section 11A to substitute
reference to Division 2 of Part 2-2. Item 42 substitutes reference to new sections 13
and 14 into section 11B and 11C referring to the requirement that for a determination
to be made, the person must be eligible and must claim.
Item 49 amends subsection 18(1) to omit the primary claimant and substitute a PPL
claimant as the person who must verify the child's birth in order to allow parental leave
pay to be payable.
Item 55 amends paragraph 26A(a) to substitute the terms effective PPL claim or
effective special PPL claim for the terms effective primary claim or effective secondary
claim. Item 55 omits reference to a person being a primary claimant from paragraph
26A(c) and substitutes reference to a PPL claimant.
Item 56 repeals and replaces the guide to Part 2-3 and section 30 to reflect the new
rules.
Item 62 removes the requirement that the person be a primary claimant before they
must meet the residency test and not be in a newly arrived resident's waiting period
on the date of birth or date of care of the child to be eligible, as this requirement will
now apply to all PPL claimants. Item 64 similarly repeals paragraph 31AA(4)(a) to
remove the limitation of meeting the residency test and work and income tests to the
primary claimant. Item 65 omits secondary or tertiary claimant from paragraph
31AA(5)(a) and substitutes PPL claimant or special PPL claimant. Item 75 omits
primary and secondary claimant from section 32, and substitutes PPL claimants and
special PPL claimants.
Item 118 repeals and substitutes sections 53 and 54. New section 53 provides for
types of PPL claims, and provides that there are two types of claims: a PPL claim and
a special PPL claim. Both must be made in the form approved by the Secretary for
that type of claim. The Secretary may approve different forms for different, or the same
type of claim.
New section 54 provides for who can make a PPL claim or special PPL claim. A PPL
claim may only be made by:
• the child's birth parent;
• an adoptive parent of the child;
• a person who is a parent of the child and is not the child's birth parent;
• the partner of the child's birth parent;
• the partner of an adoptive parent of the child;
• the partner of a person who is a parent of the child but not the child's birth
parent;
• a person who satisfies the circumstances prescribed by the PPL rules as being
exceptional circumstances in which a PPL claim can be made, including where
a child is born because of a surrogacy arrangement.
A special PPL claim may only be made by:
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Schedule 1 - Main amendments
• the partner of a person who satisfies the circumstances prescribed by the PPL
rules as being exceptional circumstance in which a PPL claim may be made;
• a person who satisfies the circumstances prescribed by the PPL rules as being
exceptional circumstances in which a special PPL claim can be made.
Item 120 inserts after paragraph 55(1)(d) new paragraph 55(1)(da). This new
paragraph includes a requirement that for a claim to be effective, it must satisfy new
section 59A, dealing with permission to make claims for flexible PPL days for a child.
Item 123 omits from subsection 57A(2) the reference to 42 days, to substitute 100
days. This will allow flexible PPL days to be specified in the claim which are up to 100
days prior to the day the claim is made.
Item 126 inserts new section 59A after section 59. New section 59A deals with
permission to make claims for flexible PPL days for a child.
Permission from the child's birth parent is required for a claim to be effective if the
claim is made by:
• a person who is a parent (other than an adoptive parent) of the child and is not
the child's birth parent;
• the partner of the child's birth parent;
• the partner of a person who is a parent (other than an adoptive parent) of the
child and is not the child's birth parent.
However, the Paid Parental Leave Rules may prescribe circumstances in which this
requirement does not apply to a person: new subsection 59A(2).
Under new subsection 59A(3), a PPL claim for parental leave pay for one or more
flexible PPL days for a child by the partner of an adoptive parent of the child is not an
effective claim unless permission to make the claim in relation to the child is given by
an adoptive parent of the child. Permission is required from the first adoptive parent
who has been found payable for the child, or, if an adoptive parent has not been found
payable for parental leave pay for the child, the adoptive parent nominated by the
partner making the claim.
Under new subsection 59A(4), permission is needed for a person to make an effective
special PPL claim for one or more flexible PPL days where the person is the partner
of someone who satisfies the circumstances prescribed by the PPL rules as being
exceptional circumstances in which such a PPL claim may be made, where the other
person has given this permission, and parental leave pay is payable to that person.
The permission must be given to the Secretary in the form approved by the Secretary,
and specify the person to whom the permission is given.
If a person has given permission under this section, the person may revoke the
permission, by giving the Secretary the revocation in a form approved by the
Secretary. This is dealt with under new subsections 59A(6) and 59A(7).
Item 70 amends paragraph 31A(6A)(c) to remove the requirement that a person be a
primary claimant before the requirement for a person to be receiving a specified
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Schedule 1 - Main amendments
payment on the day the child is born applies in order for the person to be exempt from
the newly arrived resident's waiting period.
Item 71 amends paragraph 31A(6B)(a), (b) and (c) to create a requirement that a
person has effectively claimed at least 10 flexible PPL days for a child, which days
only consist of consecutive flexible PPL days that are week days, before the exemption
from the newly arrived resident's waiting period relating to receipt of various income
support payments applies.
Items 80, 81, 82, 83, 84 and 85 amend section 33 in a number of places to substitute
PPL claimant or special PPL claimant for the term primary claimant. Item 89 amends
subsection 33A(1) to substitute PPL claimant or special PPL claimant for the term
primary claimant. Item 103 substitutes the term PPL claimant for a person who is a
primary claimant in paragraph 39(a) relating to the reference income year for a person.
Item 104 removes the 'and' at the end of subparagraph 39(a)(ii). Item 105 repeals
paragraph 39(b). Item 125 repeals and substitutes section 58. Instead of requiring
secondary claimants to specify the expected date of becoming the child's primary
carer, substituted section 58 requires a PPL claim made prior to the child's birth to
specify the child' expected date of birth. Item 129 repeals the term primary claimant
from subparagraph 60(2)(b)(i) dealing with when to claim, and substitutes PPL
claimant.
Item 133 amends subsection 67(2) to replace secondary claimant with either a PPL
claimant or a special PPL claimant regarding deductions from an instalment authorised
by a person. Item 134 substitutes reference to primary claimant wherever occurring
with another PPL claimant or a special PPL claimant in paragraph 67(2)(a). Item 136
substitutes for secondary claimant a first PPL claimant or special PPL claimant in
paragraph 67(2)(b).
Item 157 amends subparagraph 101(1)(a)(i) to correct the cross reference to a range
of sections from section 13 onwards, to limit the reference to new sections 13 and 14
only.
Item 163 amends subparagraphs 101(4)(d)(i) and (ii) relating to making employer
determinations to omit references to primary claimant and substitute PPL claimant.
The item similarly amends subparagraph 101(4)(d)(ii) to omit reference to secondary
claimant and substitute special PPL claimant.
Item 164 repeals paragraphs 102(3)(b), (c), (d) and (da) regarding notice to be given
to employers and substitutes new paragraphs (b) and (c). The new paragraphs require
notice is given of whether the Secretary has made a payability determination under
section 13 or 14 and the person's continuous flexible period for the child.
Item 165 repeals and substitutes subsection 104(3), relating to employer acceptance
notices, to require the employer's notice to include the following pay cycle information
for the person:
• the person's instalment period;
• the first day of the first instalment period for the person that overlaps with
person's continuous flexible period for the child;
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Schedule 1 - Main amendments
• the payday and the payroll cut off for an instalment that would be payable for
the first instalment period for the person.
Item 170 amends paragraph 108(1C)(b) relating to revocation of an employer
determination to omit references to former sections 17A, 17B and 17C and substitute
reference to sections 13 or 14.
Item 173 omits from paragraph 113(1)(b) relating to giving notice of the outcome of a
payability determination to an employer, references to former sections 14, 15, 16 or
17 and substituting reference only to sections 13 and 14.
Item 202 amends subsection 191(1) relating to deductions from instalments to
substituted reference to another PPL claimant or special PPL claimant for the
reference to a secondary claimant. Similarly, item 203 amends subsections 191(1)
and (2) to omit primary claimant and substitute other PPL claimant or special PPL
claimant.
Reserved 'use it or lose it' period
Item 66 amends section 31AB which provides when a person is not eligible for parental
leave pay on a flexible PPL day for a child. The item repeals and substitutes
subsections 31AB(2), (3), (4) and (5).
New subsection 31AB(2) establishes a general rule whereby a claimant is not eligible
when the number of flexible PPL days for the child exceed certain maximum amounts.
These maximum amounts depend on whether or not the claimant is partnered at the
time they make their first effective claim, which are detailed in new subsections
31AB(3) and (4). This general rule does not apply to PPL claimants in exceptional
circumstances and their partners; these categories of claimants is dealt with in new
subsection 31AB(5).
New subsection 31AB(3) applies to a claimant who is partnered at the time they make
their first effective claim. Such claimants will not be eligible for parental leave pay when
they make their first effective claim for parental leave pay in relation to more than 90
flexible PPL days for the child. This reserves 10 flexible PPL days for another claimant,
generally expected to be their partner. Changes in the claimant's partnered status will
generally not change this limit.
Similarly, if the first claimant's partner then claims, they will similarly be limited to a
maximum paid parental leave entitlement of 90 days for the child, regardless as to
how many claims they make for subsequent days.
Despite these rules, new paragraph 31AB(3)(b) provides that the limitation of 90
flexible PPL days for a partnered person does not apply to the relevant claimant in the
circumstances prescribed by the Paid Parental Leave Rules. This allows for surrogate
parents (who are PPL claimants in exceptional circumstances) who are partnered at
the time of their first effective claim to access the reserved 'use it or lose it' period,
much like other PPL claimants who are partnered at the time of their first effective
claim.
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Schedule 1 - Main amendments
New subsection 31AB(4) provides that in any case (including for a claimant who is
partnered), any person may not be eligible for parental leave pay for the child for more
than 100 flexible PPL days. This imposes an additional limit, including on partnered
claimants, such that the total number of days for which either or both of them may be
eligible in respect of the same child is limited to 100 flexible PPL days.
New subsection 31AB(5) establishes a rule whereby a PPL claimant in exceptional
circumstances is not eligible on a flexible PPL day for a child if, on that day, one or
more determinations that parental leave pay is payable to the claimant and their
partner are in force in relation to 100 flexible PPL days for the child. These
determinations may have been made under section 13 or section 14. The maximum
amount of flexible PPL days for the child covered by new subsection 31AB(5) is
considered separately from the maximum amount of flexible PPL days for the child
covered by new subsection 31AB(2) to (4). This is consistent with the current
arrangements in the Paid Parental Leave Act as it relates to the 18 week PPL period.
Limited period of concurrency
Item 51 repeals and substitutes section 21. New section 21 limits to 10 flexible PPL
days the number of days in respect of which the Secretary may make a payability
determination that parental leave pay is payable to more than one person in respect
of those days. However, the Paid Parental Leave Rules may prescribe circumstances
in which a flexible PPL day does not count towards the total of 10 flexible PPL days.
This may occur, for example, where the mother is unwell following the birth, and the
couple prefer that the father also be paid parental leave pay for a higher number of
days to allow him to stay home and provide support.
Eligibility changes
Income test
Item 102 repeals and substitutes section 37, which describes when a person satisfies
the income test. New subsection 37(1) provides that a person satisfies the income test
on a day if the person's adjusted taxable income for the reference income year is not
more than the relevant individual PPL income limit. The concepts of adjusted taxable
income, and the reference income year have not changed, but the income limit is being
modified. The previous income limit as indexed becomes the relevant individual PPL
income limit. If an individual meets this income limit, as previously, they will satisfy the
income test.
New subsections 37(2) and (3) introduce the concept of a family PPL income limit,
which will apply to the combined family income of persons with partners, and to the
single income of persons who are not partnered. The claimant's partnered status at
the time the person makes their first effective claim determines whether the test
applies to the combined income of the person and their partner, or the person's single
income.
'Partner' for the purposes of the Paid Parental Leave Act continues to have the same
meaning as in section 6 of the Social Security Act 1991.
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Schedule 1 - Main amendments
Relevant family PPL income limit is defined in section 6 by item 29 as having the
meaning given at subsection 40(2). Family PPL income limit is now defined in section
6 by item 16 as having the meaning given at subsection 41(2).
Relevant individual PPL income limit is defined in section 6 at item 29 as having the
meaning given at subsection 40(1). Individual PPL income limit is defined in section 6
at item 20 by reference to subsection 41(1).
Item 30 repeals the previous definitions of relevant PPL income limit from section 6.
Item 107 repeals and substitutes section 40. New subsection 40(1) gives the relevant
lower income limit for a claimant as the individual PPL income limit that applies on the
earlier of the day the person made the claim and the day the child was born. New
subsection 40(2) gives the relevant family PPL income limit for a claimant is the family
PPL income limit that applies on the earlier of the day the person made the claim and
the day the child was born.
Item 108 repeals the heading to section 41 and substitutes the heading 'Individual and
family PPL income limits'.
Item 109 omits 'The PPL income limit' from subsection 41(1) and substitutes 'The
individual PPL income limit', leaving the remainder of the section intact. This results in
the individual PPL income limit being the previously applying PPL income limit as
indexed prior to that day.
Item 110 adds new subsection 41(2). The new subsection provides that the family
PPL income limit on a day is $350,000 if the day is on or after 1 July 2023 but before
1 July 2024. On a day on or after the next indexation day (1 July 2024) the amount is
that amount as indexed.
Items 111 and 112 substitute the term 'individual and family PPL income limits' for
'the PPL income limit' into the heading of Subdivision B of Division 4 of Part 2-3, which
effects the indexation of the PPL income limit and into the heading of section 42, which
also deals with indexation of that limit.
Item 113 repeals and substitutes subsections 42(1) and (2) and generally replicates
the indexation previously provided of the PPL income limit, and applies it to each of
the individual and family PPL income limits. At new subsection 42(1), it substitutes an
indexation day of 1 July each year (the indexation day). Subsection 42(2) provides the
first indexation day for the individual PPL income limit is 1 July 2021 and the first
indexation day of the family PPL income limit is 1 July 2024. New subsection 42(3)
preambles the method statement and provides for how to work out the indexed amount
for the individual and family PPL income limits on the indexation day.
Item 114 amends the method statement at subsection 42(2) to substitute the words
'relevant income limit' for 'PPL income limit'.
Item 19 amends section 6 to substitute a definition of indexed amount by reference to
new subsection 42(3).
24
Schedule 1 - Main amendments
Item 105 repeals paragraph 39(b). This gives effect to a policy change to identify the
reference income year for a special PPL claimant as the income year that ended
before the first flexible PPL day that is specified in the person's claim for parental leave
pay.
Caring for a child
Item 115 repeals and substitutes Division 6 of Part 2-3.
Item 3 relies at section 6 upon section 47 as providing the definition of 'caring'.
Substituted section 47 deals with when a person is caring for a child, substituting for
the existing requirement for a primary carer. A person is caring for a child on a day if
the child is in the person's care on that day. A note alerts the reader to the fact that
more than one person may be caring for the same child on any particular day.
The section also clarifies that a person is not caring for a child on a day if, before that
day, the child has died.
Item 213 consequentially amends the heading to section 277 to substitute for the term
primary carer the term caring for a child. Items 215 and 216 similarly substitute into
that section references to caring for a child. Item 60 substitutes into paragraph
31AA(2)(b) reference to caring for a child. Item 63 substitutes into paragraph
31AA(3)(c) a requirement to have expected to have been caring for the child, rather
than the child's primary carer for eligibility in respect of a stillborn or deceased child.
Work test
Item 116 repeals Division 7 of Part 2-3 which deals with return to work. It will no longer
be a requirement that a person not have returned to work in order to remain eligible
for parental leave pay. Item 24 amends section 6 to repeal the definition of permissible
purpose and item 30 repeals from section 6 the definition of returns to work. Item 61
repeals and substitutes paragraph 31AA(2)(c) to remove the requirement that to be
eligible a person has only performed work for a permissible purpose.
Item 117 amends the Guide to Part 2-4 at section 51 to reflect the new rules.
Item 78 repeals and substitutes subsection 33(1A) which provides that section 33
applies to determine the work test in relation to a PPL claimant or special PPL claimant
who is not a COVID-19 affected claimant in relation to a claim for parental leave pay
for a child. The item also adds new subsection 33(1B) which provides that if a provision
of this Act or the Paid Parental Leave Rules requires a birth parent of a child to satisfy
the work test on a day for the purposes of a PPL claim or special PPL claim made by
another person, this section applies as if a reference to a PPL claimant or special PPL
claimant were a reference to the birth parent. This allows the birth parent to satisfy the
test despite the test being directed to the claimant. Item 79 repeals and substitutes
the heading 'Work test period' for section 33.
Item 87 repeals subsection 33(3) which previously set up a different work test period
for a secondary claimant. As a result, both a PPL claimant and a special PPL claimant
25
Schedule 1 - Main amendments
will have the same work test period, generally of the 392 days immediately before the
relevant child's birth.
Item 90 repeals subsection 33A(2) which similarly previously set up a different work
test period for a secondary claimant. As a result, the work test period for a covid-19
affected claimant will be the 600 days, generally immediately prior to the relevant
child's birth.
Consequentially, item 88 omits (1) because section 33A will no longer have a number
of subsections.
Item 124 repeals and substitutes subsection 57A(2A). New subsection 57A(2A)
clarifies that days earlier than 100 days prior to the claim being made may be specified
in the claim if the claimant is a COVID-19 affected claimant in relation to the claim or
the claimant is a PPL claimant who satisfies the work test in relation to the claim by
reason of at least one day in the claimant's work test period being a day in a COVID-
19 Australian Government payment period for the claimant. This last element makes
clear the intended effect of amendments effected by the Paid Parental Leave
Amendment (COVID-19 Work Test) Act 2021, which eased the work test for persons
who could not meet it but were receiving a COVID-19 Australian Government payment
and so could be regarded as working. Flexibility to name past flexible PPL days for
this group was always the intention.
Employer determinations
Employer determinations, that a person's employer will pay them their parental leave
pay will remain essentially unchanged, requiring the employer pay only where the
employee has a continuous flexible period of flexible PPL days. Where the person's
employer does not pay them their parental leave pay, it will be paid directly by the
Secretary.
The concept of a continuous flexible period is modified, because it will no longer
include a sequence of days within a PPL period.
Item 137 amends the guide at section 71 to Part 3-2 to reflect the new rules.
Item 139 inserts new Division 1A within Part 2-3, relating to payments of instalments
by employer, after section 71. New section 71A provides that a person has a
continuous flexible period if one or more payability determinations for a period of one
or more flexible PPL days are in force or one or more initial eligibility determinations
are in force ('the relevant period"), and the relevant period only consists of 40
consecutive flexible PPL days for the child that are week days. If so, that period is a
continuous flexible period for the child. If parental leave pay for any weekend days are
payable, the relevant period will not meet the requirements to be a continuous flexible
period. The continuous flexible period starts on the first day in the relevant period, and
ends on the earlier of the last day in the relevant period, or the day before the child's
first birthday.
Item 6 amends section 6 definition of continuous flexible period to refer to new section
71A. Item 37 repeals section 6A which originally provided this definition. Item 17
26
Schedule 1 - Main amendments
repeals the former definitions of flexible PPL period and 'has a continuous PPL period'
from section 6.
Item 140 then repeals and substitutes subsection 72(1A), to provide that if an
employer is required under subsection 72A(1) to pay an instalment to a person in
relation to a child of the person, the requirement only applies to the extent that the
instalment is payable in relation to a flexible PPL day for the child that falls within the
continuous flexible period mentioned in the employer notice relating to the employer
determination. Item 141 then omits reference to a PPL period in note 2 to this
subsection. Item 142 omits reference to section 92 from note 2.
Item 147 then amends section 84 which provides for when the Secretary pays an
instalment. This Item repeals and substitutes subsection 84(2A) to provide that the
Secretary must pay the person any instalments that is payable in relation to a day that
does not fall within the person's continuous flexible period for the child, where
payments are otherwise being made by the person's employer.
Item 149 repeals and substitutes paragraph 84(5)(b) to provide that if the Secretary
has referred an employer contravening their obligations to pay an instalment and not
make unauthorised deductions to the Fair Work Ombudsman, the Secretary must then
pay an instalment that relates to an instalment period that starts on or after the day
after the last flexible PPL day for the child that falls within the person's continuous
flexible period for the child, and for which the Secretary has paid the employer a PPL
funding amount for the person.
Miscellaneous amendments
Item 179 clarifies the information gathering powers of the Secretary under the Paid
Parental Leave Act, by amending paragraph 117(1)(a) to include the power to gather
information about whether a person has made an effective claim for parental leave
pay, and if so, whether they were eligible.
Item 50 repeals sections 19 and 19A which related to commencements of earlier
amendments to the Paid Parental Leave Act, and are now spent.
Item 212 makes a technical correction to the wording of the Guide at section 274.
27
Schedule 2 - Consequential Amendments
Schedule 2 - Consequential amendments
Summary
This Schedule makes amendments to Acts consequentially to the primary
amendments in Schedule 1. Consequential amendments are made to the A New Tax
System (Family Assistance) Act 1999, A New Tax System (Family Assistance)
(Administration) Act 1999, Data matching Program (Assistance and Tax) Act 1990,
Fair Work Act 2009, Income Tax Assessment Act 1997, Social Security Act 1991,
Taxation Administration Act 1953 and the Veterans' Entitlements Act 1986 to reflect
the fact that the paid parental leave scheme will only consist of flexible PPL days, and
the abolition of dad and partner pay
Explanation of the changes
A New Tax System (Family Assistance) Act 1999
Item 1 inserts a definition of flexible PPL day into subsection 3(1), as having the same
meaning as in the Paid Parental Leave Act.
Item 2 repeals the definition of continuous PPL period from subsection 3(1).
Item 3 inserts a definition of parental leave pay into subsection 3(1).
Item 4 repeals the definition of PPL period from subsection 3(1).
Item 5 repeals a reference to dad and partner pay from paragraph 61AA(7)(c) relating
to the newly arrived resident's waiting period.
Item 6 inserts new subsection 61AA(7A) after 61AA(7). New subsection 61AA(7)
creates a new circumstance in which a newly arrived resident's waiting period does
not apply if a period of days within the waiting period includes at least 10 consecutive
days which are not a Saturday or Sunday on which parental leave pay under the Paid
Parental Leave Act is payable to the individual. A newly arrived resident's waiting
period does not apply to the period that starts and ends on the first and last of those
consecutive days, including any Saturdays or Sundays falling within that period.
Item 7 repeals paragraphs 35A(9)(a) and (b) of Schedule 1 to the Family Assistance
Act, to set out circumstances where the person is not eligible for newborn supplement.
Those circumstances include where parental leave pay is payable to a person (other
than the individual) for a flexible PPL day for that child, and the person and the
individual are members of a couple on that day.
A New Tax System (Family Assistance) (Administration) Act 1999
Item 8 repeals the definition of maximum PPL period from subsection 3(1).
Item 9 repeals and substitutes paragraph 39(4)(b) which deals with restrictions on
claiming stillborn baby payment. The substituted paragraph maintains the capacity for
28
Schedule 2 - Consequential Amendments
a person to make a late claim for stillborn baby payment where the claimant or their
partner was given a notice stating parental leave pay is not payable follow a claim for
parental leave pay, then they have a further 13 weeks to later claim stillborn baby
payment.
Item 10 repeals subparagraph 41(3)(c)(i) which relates to where a person has a PPL
period in respect of a child.
Item 11 omits from subparagraph 41(3)(c)(ii) the words 'if the person does not have a
PPL period for the child but parental leave pay is payable to the person for one or
more flexible PPL days for the child specified in the claim', leaving the rest of the
subparagraph, which has the same effect for flexible PPL.
Item 12 similarly repeals paragraph 41(3)(d) and substitutes 'the claimant, or the
claimant's partner, is given a notice under section 24 of that Act in relation to the claim
for parental leave pay that states that parental leave pay is not payable and no
determination of the kind mentioned in paragraph 13(6)(b) of that Act has been made;'
to remove the current references in the paragraph to a PPL period.
Data matching Program (Assistance and Tax) Act 1990
Item 14 repeals subsection 3(1) paragraph (f) of the definition of personal assistance
to remove the reference to dad and partner pay. Item 13 consequentially amends
paragraph (e) to include a full stop as this is now the end of the definition.
Fair Work Act 2009
Item 15 repeals the note to subsection 79A(4) which refers to now repealed provisions
of the Paid Parental Leave Act relating to not returning to work.
Income Tax Assessment Act 1997
Item 16 repeals the definition of dad and partner pay at subsection 995-1(1).
Social Security Act 1991
Item 17 repeals the definition of dad and partner pay at subsection 8(1).
Item 19 repeals paragraph 8(1A)(i) which specifies dad and partner pay. Item 18
consequentially adds a full stop to the end of paragraph 8(1A)(h).
Item 20 repeals the definition of dad and partner pay from subsection 23(1).
Item 21 repeals paragraph 93WC(2)(ab) which references dad and partner pay.
Item 22 omits 'or dad and partner pay' from paragraph 966(4)(c) relating to the newly
arrived resident's waiting period for the purposes of carer allowance.
Item 23 repeals the definition of leave payment from Points 1064-F14, 1066A-G14,
1067G-H20, 1067L-D16, 1068-G7AR, 1068A-E12 and 1068B-D18 and substitutes
'leave payment includes a payment in respect of sick leave, annual leave, maternity
29
Schedule 2 - Consequential Amendments
leave and long service leave, but does not include an instalment of parental leave
pay'. The previous definition included reference to dad and partner pay.
Item 25 repeals paragraph (g) of the definition of income in point 1071A-4 as this
references dad and partner pay. Item 24 consequentially adds a full stop to the end
of paragraph (f) of that definition.
Item 26 repeals paragraph 1228(2)(cb) which referenced dad and partner pay.
Taxation Administration Act 1953
Item 27 repeals paragraph 12-110(1)(cb) in Schedule 1, which referenced dad and
partner pay.
Item 28 omits 'or dad and partner pay' from the heading to subsection 16-155(3) in
schedule 1.
Item 29 omits 'or dad and partner pay' from paragraphs 16-155(3)(a) and 16-
160(3)(a) in Schedule 1.
Item 30 omits 'or dad and partner pay' from Subparagraphs 18-65(1)(b)(ii) and 18-
70(1)(b)(ii) in Schedule 1.
Item 31 omits 'or (cb)' from subsection 389-5(1) in Schedule 1 (Table item 1),
column 1, paragraph (a), which is consequential to the amendment at item 27.
Veterans' Entitlements Act 1986
Item 32 repeals the definition of dad and partner pay from subsections 5H(1) and
5Q(1).
Item 33 repeals paragraph 45UUC(2)(ab) which referenced dad and partner pay.
Item 34 adds a full stop to paragraph paragraph 46AB(1)(h).
Item 35 repeals paragraph 46AB(1)(i) which references dad and partner pay.
Item 36 repeals paragraph 205(1)(cc) which covered dad and partner pay.
Items 37, 38 and 39 omit cross references to paragraph 205(1)(cc) from paragraph
205(2)(a), subsection 205(8) (paragraph (ba) of the definition of excluded amount)
and subsection 205(8) (paragraph (a) of the definition of recoverable amount).
30
Schedule 3 - Application, savings and transitional provisions
Schedule 3 - Application, savings and transitional provisions
Summary
This Schedule provides savings provisions in relation to the amendments, and
provides for their application and transition to the changed scheme.
Explanation of the changes
Item 1 provides definitions for this Schedule.
In this Schedule:
• commencement day means 26 March 2023;
• new law means the Paid Parental Leave Act, as amended by Schedule 1 to
this Act;
• old law means all of the following, as in force immediately before
commencement day:
o the Paid Parental Leave Act;
o instruments (whether legislative or administrative) made under the Paid
Parental Leave Act;
o the Acts amended by Schedule 2 to this Act.
• PPL Act means the Paid Parental Leave Act 2010.
• transition period means the period that starts on 26 March 2023 and ends on
30 June 2023.
This transition period is derived from section 60 of the Paid Parental Leave Act, which
provides that a person may make a claim for parental leave pay 97 days before the
child's expected date of birth. This means the earliest date on which a person may
make a claim for parental leave pay for a child whose expected date of birth is 1 July
2023 is 26 March 2023.
Item 2 provides for the application of the amendments to claims.
Pre-commencement claim--child born before commencement
Subitem 2(1) ensures the old law continues to apply on and after the commencement
day in relation to a claim for parental leave pay or dad and partner pay made before
the commencement day for a child born before the commencement day.
Pre-commencement claim--unborn child with expected date of birth before 1 July
2023
Subitem 2(2) ensures the old law continues to apply on and after the commencement
day in relation to a claim for parental leave pay or dad and partner pay made before
the commencement day for a child who was not born at the time of the claim and the
child's expected date of birth is before 1 July 2023.
Subitem 2(3) provides that if a child is born on or after 1 July 2023, a claim referred to
in subitem 2(2) made before the commencement day is taken to be a claim for parental
leave pay under the new law and the new law applies in relation to the claim on and
after 1 July 2023, despite the rule at subitem 2(2).
31
Schedule 3 - Application, savings and transitional provisions
Transition period claim--child born before claim is made
Subitem 2(4) provides a claim for parental leave pay or dad and partner pay for a child
may be made during the transition period in relation to a child born before 1 July 2023,
and the old law continues to apply to the claim.
Transition period claim--unborn child with expected date of birth before 1 July 2023
Subitem 2(5) provides that the old law continues to apply to a claim for parental leave
pay or dad and partner pay made during the transition period for a child who has not
been born at the time of the claim and the child's expected date of birth is before 1
July 2023.
Where a child is born on or after 1 July 2023, subitem 2(6) provides that a claim
referred to in subitem 2(5) is taken to be a claim for parental leave pay under the new
law and the new law applies in relation to the claim on and after 1 July 2023, despite
the rule at subitem 2(5).
Transition period claim--unborn child with expected date of birth on or after 1 July
2023
Subitem 2(7) states that the new law applies in relation to a claim for parental leave
pay made during the transition period for a child that has not yet been born at the time
of the claim and is expected to be born on or after 1 July 2023.
Under subitem 2(8), a claim referred to in subitem 2(7) can only be made in the
transition period by the child's birth parent, or an adoptive parent of the child if no
payability determination for parental leave pay in relation to the child has previously
been made in respect of another person. This aims to reduce administrative
complexities around the new requirement for certain PPL claimants and special PPL
claimants to obtain permission to make a claim for their claim to be effective.
Where a child is born before 1 July 2023, subitem 2(9) provides that a claim referred
to in subitem 2(7) is taken to be a claim for parental leave pay under the old law and
the old law applies in relation to the claim on and after 1 July 2023, despite the rule in
subitem 2(7).
Post 1 July 2023 claim--child born before 1 July 2023
Subitem 2(10) ensures the old law continues to apply to a claim for parental leave pay
or dad and partner pay made on or after the commencement day in relation to a child
born before 1 July 2023.
Post 1 July 2023 claim--child born on or after 1 July 2023
Subitem 2(11) provides that the new law applies in relation to a claim for parental leave
pay made on or after 1 July 2023 for a child who is born at the time of the claim and
who was born on or after 1 July 2023.
32
Schedule 3 - Application, savings and transitional provisions
Post 1 July 2023 claim--unborn child
Subitem 2(12) provides that the new law applies in relation to a claim for parental leave
pay made on or after 1 July 2023 for a child if the child has not been born at the time
the claim is made.
Item 3 provides for the continuing application of sections 34 and 35A to 35C of the
Paid Parental Leave Act as in force immediately before the commencement day in
relation to a claim for parental leave pay for a child born on or after 1 July 2023. This
item enables a person to count qualifying work in a previous PPL period, DAPP period,
jobkeeper payment period and/or COVID-19 Australian Government payment period
for the purposes of the work test.
Item 4 provides for the continuing application of other Acts which have been amended
as a consequence of Schedule 2 to this Bill.
Subitem 4(1) provides that the following Acts and provisions, as in force immediately
before the commencement day, continue to apply in relation to payments of dad and
partner pay made before, on or after the commencement day:
• paragraph 61AA(7)(c) of the A New Tax System (Family Assistance) Act 1999;
• the Data-matching Program (Assistance and Tax) Act 1990;
• the Social Security Act 1991;
• the Taxation Administration Act 1953;
• the Veterans' Entitlements Act 1986.
Subitem 4(2) provides that paragraphs 35A(9)(a) and (b) of Schedule 1 of the A New
Tax System (Family Assistance) Act 1999, as in force immediately before the
commencement day, continue to apply in relation to PPL periods occurring wholly or
partly before, on or after the commencement day.
Item 5 deals with adopted children and exceptional circumstances.
The following provisions of the Paid Parental Leave Act, as in force on the
commencement day, apply in relation to this Schedule as if it were a provision of that
Act:
• section 275, which deals with how that Act applies to an adopted child;
• section 276, which deals with how that Act applies to claims made in
exceptional circumstances.
Item 6 provides for the power to request information in relation to any claim described
in item 2.
Subitem 6(1) provides that if a person makes a claim to which this Schedule applies,
the Secretary may request the person to give information or produce a document for
33
Schedule 3 - Application, savings and transitional provisions
the purposes of administering this Schedule, the Paid Parental Leave Act or the Paid
Parental Leave Rules.
Subitem 6(2) provides that if a person refuses or fails to comply with the request, the
Secretary may determine that the claim to which the request relates is taken to not be
effective claim for the purposes of Part 2-4 or 3A-4 of the Paid Parental Leave Act.
Subitem 6(3) provides that subsection 303(1) of the Paid Parental Leave Act has effect
as if this item were a provision of that Act. Subsection 303(1) allows the Secretary to
delegate all or any of his or her powers under the Paid Parental Leave Act (other than
paragraph 128(1)(b)) to an officer, or a person engaged by a Commonwealth agency,
authority or organisation. This allows the Secretary to delegate their powers under this
item as if the item were a substantive provision of the Paid Parental Leave Act.
Item 7 outlines where the Paid Parental Leave Rules may deal with transitional
arrangements relating to the amendments made by this Act. This will allow the Paid
Parental Leave Rules to deal with issues which cannot currently be foreseen which
arise during transition, and to make appropriate arrangements to deal with such
issues.
Subitem 7(1) enables the Minister to make rules prescribing matters of a transitional
nature (including prescribing any saving or application provisions) relating to the
amendments or repeals made by this Act by legislative instrument.
Subitem 7(2) provides that, without limiting subitem 7(1), rules made under this item
before 1 July 2024 may provide that provisions of any of the following have effect with
any modifications prescribed by the rules:
• this Act;
• the Paid Parental Leave Act;
• the Acts amended by Schedule 2 to this Act;
• the Paid Parental Leave Rules.
Those provisions then have effect as if they were so modified. The power to modify
the Act is necessary to deal with unforeseen issues which arise during transition or
require savings or application provisions, which are needed more quickly than it would
be possible to substantively amend the primary Act. The Paid Parental Leave Rules
are disallowable, and will be subject to parliamentary scrutiny, including to any extent
to which they override provisions of the Act.
Subitem 7(3) prevents rules made under subitem 7(1) from:
• creating an offence or civil penalty;
• providing powers of:
o arrest or detention; or
o entry, search or seizure;
• imposing a tax;
• setting an amount to be appropriated from the Consolidated Revenue Fund
under an appropriation in this Act;
• directly amending the text of this Act.
34
Schedule 3 - Application, savings and transitional provisions
Otherwise, subitem 7(4) provides that this Schedule does not limit the rules that may
be made for the purposes of subitems 7(1) and 7(2).
35
REGULATION IMPACT STATEMENT
Boosting Parental Leave to Enhance Economic
Security, Support and Flexibility for Australia's
Families
Contents
Introduction
Current setting
1. What is the problem you are trying to solve?
2. Why is government action needed?
3. What policy options are you considering?
4. What is the likely net benefit of each option?
5. Who did you consult and how did you incorporate their feedback?
6. What is the best option from those you have considered?
7. How will you implement and evaluate your chosen option?
References
Introduction
Summary of changes
From 1 July 2023, the Government is introducing key changes to the Paid Parental
Leave (PPL) scheme to better reflect the needs of modern Australian families.
This document provides an analysis of the regulatory impacts of the following
proposed amendments to the PPL scheme:
1) Increasing the length of entitlements under the scheme to 26 weeks,
2) Introducing a more gender-neutral claim process,
3) Reserving two weeks of Parental Leave Pay (PLP) as a 'use it or lose it'
entitlement for each parent, and
4) Allowing parents to take one or more days of PLP concurrently.
These changes aim to increase gender equality under the PPL scheme, and signal
that taking time away from work to care for children is the responsibility of both
parents.
The proposed amendments build on changes to the PPL scheme announced on 29
March 2022 as part of the 2022-23 March Budget measure - Enhanced Paid
Parental Leave for Families (OBPR22-02029, 44413) to:
• Create a single 20-week payment under the PPL scheme by combining Dad
and Partner Pay (DaPP) with PLP,
1
• Introduce a family income limit of $350,000 adjusted taxable income (ATI) in
addition to the existing individual income limit ($156,647 from 1 July 2022),
and
• Increase the flexibility of PLP so that the entire entitlement will be able to be
taken in blocks as small as one day at a time, with periods of work in
between, within two years from the birth or adoption.
An explanation of the policy, including definition of key terms, is included in the
Background section (page 4).
A Regulation Impact Statement (RIS) analysing the impacts of the amendments to
the PPL scheme announced on 29 March 2022 was completed by DSS. On 27
March 2022 the Office of Best Practice Regulation (OBPR) assessed the RIS as
adequate to inform a Government decision.
The OBPR advised that the RIS needs to be updated and reassessed through a two
pass process in order to meet the Australian Government's RIS requirements for the
additional policy amendments. This RIS analyses the impacts of both sets of
amendments. Draft versions of the updated RIS were used to inform decisions of
Government before this finalised RIS was used to inform a final decision of
Government.
On 15 October 2022, the Prime Minister partially announced the changes to the PPL
policy, with further details to be announced as part of the 2022-23 October Budget.
2
Background
Following a public inquiry into paid maternity, paternity and parental leave, the
Productivity Commission released its report, Paid Parental Leave: Support for
Parents with Newborn Children, in May 2009. 1 The report proposed a model for a
Government-funded paid parental leave scheme.
The PPL scheme is closely based on the model proposed in the Productivity
Commission report. A key difference is the inclusion of an income test in the PPL
scheme, which was not included in the Productivity Commission model. The PPL
scheme was introduced with an income test, to target the payment to individuals with
incomes below a certain threshold.
The PPL scheme is currently comprised of two payments:
• PLP-- for up to 18 weeks, at a rate based on the national minimum wage to
eligible primary carers of a newborn or recently adopted child, and
• DaPP-- for up to two weeks, at a rate based on the national minimum wage
to fathers and partners caring for a newborn or recently adopted child.
Detailed current policy settings for both payments are outlined below.
Key terms
Term Definition
Care of a child The child is in the care of a person for a day
Exceptional A person can make a claim for PLP in exceptional circumstances where
circumstances the birth parent or adoptive parent of a child are incapable of caring for
the child for a continuous period of at least 26 weeks.
Parent Legal parent of a child, be it biological, adoptive, born through artificial
conception or born through a surrogacy arrangement.
Partner The other member of a couple, i.e. if a birth parent is in a partnered or
de facto relationship, the person with whom they are partnered
Primary Claimant A primary claimant is a child's birth parent, an adoptive parent or
another person in exceptional circumstances.
Secondary Claimant A secondary claimant is the other biological parent of the child and / or
the partner of the primary claimant, or another person in exceptional
circumstances.
Tertiary Claimant A tertiary claimant is a person not covered by primary or secondary
claimant, and who may claim in exceptional circumstances.
Current policy settings for Parental Leave Pay
The objectives of PLP are to provide financial support to primary carers (mainly birth
parents) of 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 parents and children,
• encourage women to continue to participate in the workforce,
• provide those carers with greater flexibility to balance work and family life.
PLP provides eligible working parents (usually birth parents) with up to 18 weeks of
pay at a rate based on the national minimum wage. PLP has two components: a PPL
1
"Paid Maternity, Paternity and Parental Leave: Inquiry report", Australian Government Productivity
Commission, 12 May 2009.
3
period of up to 12 weeks and six weeks of flexible PPL. The PPL period must be
taken in one continuous block with no breaks in eligibility from the date of birth or
adoption until the end of the PPL period. The PPL period must be fully paid within 52
weeks from the date of birth or adoption. Flexible PPL can be taken any time after
the PPL period and within two years of the birth or adoption, on days the primary
carer is not working. It can be taken in multiple blocks as small as a day at a time
and may include periods of work in between.
A primary claimant is able to transfer all or part of the PPL period to their partner or
the father of the child, if they are also eligible, to use on days they have primary care
of the child. An eligible primary claimant may also give permission for an eligible
father or partner to claim some or all of the flexible PPL days.
Full-time, part-time, casual, seasonal, contract and self-employed workers may be
eligible.
In cases of adoption, PLP can be received for a child that is under 16 years of age
on the day the day of placement. A claim must be submitted within 12 months of the
placement and the PLP entitlement can be received within two years of the date of
placement. PLP cannot be received for a child that has come into a person's care
under a fostering arrangement, even if the child is eventually adopted by the person.
Tax-payer funded PLP is usually delivered through employers to long-term
employees in their usual pay cycle. Parents who do not receive PLP from their
employer or who do not have an employer, receive the payments directly from
Services Australia.
Claimants of PLP can receive their Government-funded payment before, after or at
the same time as employer provided leave.
To be eligible for PLP on a day, a person needs to be the primary carer of a child
and meet the work test, income test, residency requirements and must not be
serving a newly arrived residents waiting period (NARWP) without an exemption. In
addition, to be eligible for a PPL period a person must not have returned to work
from the date of birth until the end of their PPL period. To be eligible for flexible PPL
on a day a person must not be working on the day.
The Work Test
To be eligible for PLP, a primary claimant must have performed qualifying work for
both:
• 10 of the 13 months before the birth or adoption of their child, and
• a minimum of 330 hours (or around one day a week) in that 10 month period.
If coronavirus (COVID-19) affected parents' work, they may be able to use
an extended work test when claiming the payment. Under these arrangements, to be
eligible for PLP a claimant must have worked for 10 out of the 20 months before the
birth or adoption of their child, allowing them to count work they did before COVID-19
affected their employment.
From 4 September 2021, an exception to the work test applies where special
circumstances exist (including domestic violence, natural disaster or severe medical
condition).
4
A number of other work test exceptions are also available. For example if claimants:2
• have a pregnancy related complication or illness;
• experience premature birth;
• are employed in a dangerous job or where there are workplace hazards that
pose a risk to the pregnancy.
Only certain activities count as qualifying work for the work test. Work includes:
• paid work on a day when the claimant has worked for at least one hour
• paid leave on a day, such as sick leave, annual leave and paid maternity
leave, for a period of at least one hour.
Unpaid leave (including unpaid maternity leave) does not count as qualifying work.
Periods of JobKeeper Payment and COVID-19 Disaster Payment also count as
work. For periods of JobKeeper Payment and COVID-19 Disaster Payment, a
person can count whichever of the following is greater:
• 7.6 hours for each weekday in the period, not including weekends;
• the number of hours actually worked each day, including weekends;
• the number of hours of paid leave each day.
Apart from full time work, the claimant could be engaged in any of the following and
still meet the work test requirements:
• be a part time, casual or seasonal worker,
• be a contractor or self-employed,
• have multiple employers,
• have recently changed jobs or left a job, or
• have worked overseas.
For previous periods of PLP or DaPP that fall within the 13 month work test period,
each weekday counts as 7.6 hours of work.
The Income Test
To be eligible for PLP, the claimant must have an individual adjusted taxable
income of:
• $150,000 or less in the 2019-20 financial year, or
• $151,350 or less in the 2020-21 financial year, or
• $156,647 or less in the 2021-22 financial year.
In establishing whether a person meets the income test, Services Australia look at
the claimant's income from the financial year before either:
• the date of birth or adoption, or
• the date the person lodges their claim (whichever date is earlier).
The Residency Test
The claimant must also meet residency rules. When their child is born
or adopted they must be living in Australia, and have one of the following:
• Australian citizenship
2 For more information see: Exceptions to the Parental Leave Pay work test - Parental Leave Pay - Services Australia
5
• a permanent visa
• a Special Category visa3
• a certain temporary visa, for example a partner provisional or temporary
protection visa.
Newly arrived residents may have to wait for two years before accessing PLP, with
some exemptions. The two year period needs have ended before the birth or
adoption of the child. For example, if a person's child was born on 1 April 2021, the
parent would have to have been in Australia as a resident since 1 April 2019 to
qualify.
Claim hierarchy
A primary claimant for PLP must be the birth parent of the child, an adoptive parent,
or others in exceptional circumstances. A claim in exceptional circumstances can be
made by a person who has become primary carer of the child because the parent is
incapable of caring for the child. A father or partner can claim PLP as a secondary
claimant. In order for a secondary claimant to receive PLP, both the primary claimant
and the secondary claimant must satisfy income, work and residency tests and
NARWP requirements (if relevant).
If a birth parent does not satisfy the work and residency requirements or is serving a
NARWP without an exemption, a father or partner cannot be eligible for PLP, even if
they does meet these requirements.
Similarly, if a birth parent has an income over the relevant income limit, a father or
partner cannot receive PLP, even if their income is below the income limit.
Conversely, a birth parent with an income below the relevant income level can
receive PLP, regardless of her partner's income.
Current policy settings for Dad and Partner Pay
DaPP provides eligible working fathers or partners with up to two weeks' pay at a
rate based on the national minimum wage.
The objective of DaPP is to provide financial support to fathers and partners caring
for newborn or newly adopted children, in order to:
• increase the time that fathers and partners take off work around the time of
birth or adoption,
• create further opportunities for fathers and partners to bond with the child, and
• allow fathers and partners to take a greater share of caring responsibilities
and to support mothers and partners from the beginning.
To receive the payment, fathers or partners must:
• be caring for the child on each day of the period they receive DaPP,
• have met the income test (as per PLP requirement),
• have met the work test (as per PLP requirement),
• have met the residency rules and NARWP requirements, and
3 For more information see: Residence descriptions - Parental Leave Pay - Services Australia
6
• not be working or taking paid leave during the DaPP period (except
for allowable reasons). The role of employers in DaPP is to provide unpaid
leave so that their eligible employees can access the payment.
DaPP claimants can receive their Government-funded payment before or after, but
not at the same time as, their employer provided leave.
There is no claim hierarchy for DaPP as it cannot be transferred. Birth parents
cannot be eligible for DaPP.
For the purposes of this payment, father or partner is defined as:
• child's biological father;
• partner of the birth parent;
• adoptive parent;
• partner of an adoptive parent, or
• person caring for a child born of a surrogacy arrangement.
In some circumstances, the person can also be eligible if they are the partner of the
biological father or the partner of a new carer where care arrangements have
changed (other than a foster care or permanent care arrangement). For more
information on relationship types see: Your relationship status - Dad and Partner Pay
- Services Australia.
A person can still receive DaPP if they work during the period they are receiving
DaPP for allowable reasons. For example, if the person needs to work to comply
with a court ordered summons, is a defence force or law enforcement officer working
due to a compulsory recall to duty, or is a health professional, emergency services
worker or other essential worker, responding to a state, territory or national
emergency.
Employer-provided paid parental leave
Both PLP and DaPP can be complemented by employer parental leave schemes.
That is, employers can provide additional paid parental leave, either through
company policy or enterprise agreements. While superannuation is not included in
the PPL scheme, legislation does not prevent individuals from making voluntary
superannuation contributions, or employers from choosing to pay superannuation on
PLP and DaPP.
Around 81% of employers offering paid parental leave also pay superannuation for
parents while on paid leave: almost three quarters pay superannuation during the
employer-funded parental leave, and 7% pay superannuation on both employer-
funded and government funded parental leave.
History of this Regulation Impact Statement
On 25 March 2022, the RIS - Enhanced Paid Parental Leave for Families - Second
Pass Final Assessment was submitted to the OBPR. On 27 March the RIS was
assessed as adequate by the Executive Director of the OBPR.
Since this submission, the proposed changes to the PPL scheme have been
substantially amended. The new proposal is titled Increased Equality Under the Paid
7
Parental Leave scheme (per this document). Option 1 has remained the same
between the Enhanced Paid Parental Leave for Families RIS and this RIS. Option 2
and 3 of the Enhanced Paid Parental Leave for families RIS have been combined to
form Option 2 of this RIS. Option 3 of this RIS is novel and reflects the additional
proposed amendments to the PPL scheme.
2022-23 March Budget Measure - Enhanced Paid Parental Leave for Families
Changes to the PPL scheme were announced as part of the 2022-23 March Budget
measure4 - Enhanced Paid Parental Leave for Families to:
• combine DaPP and PLP into a single 20 week payment;
• broaden the income test to allow those who do not meet the individual income
threshold (currently $156,647 per annum) to qualify for payment if they meet a
family income threshold of $350,000 per annum; and
• make PLP fully flexible so that the entire entitlement can be taken in multiple
blocks as small as one day at a time with periods of work in between, within two
years of the birth or adoption.
These changes have not been legislated.
Note that the combination of DaPP and PLP will remove the requirement that fathers
and partners take their parental leave days while on unpaid leave from their
employment.
2022-23 October Budget Measure - Increased Equality Under the Paid Parental
Leave scheme
The October Budget measure retains the changes put forward by the March Budget
measure, and make the following additional changes:
• claimants may take PLP days concurrently
• gender neutral claiming, in which either parent may claim PLP first, will be
introduced
• reserving a period of the PLP entitlement on a 'use it or lose it' basis for each
parent, essentially capping entitlements at 18 weeks per parent (single parents
will receive the entire entitlement)
• a phased increase in length of PLP to 26 weeks by 1 July 2026.
4 Budget Paper No. 2 | Budget 2022-23
8
1. What is the problem you are
trying to solve?
Improving gender equality by supporting women's workforce participation
In Australia, and in many other countries around the world, social and cultural
expectations still place the responsibility of caring for children primarily on women.
Women taking on responsibility of care often leads to them being more likely to work
part time, or remain out of the workforce for longer periods of time (often affecting or
postponing their career aspirations). Men, on the other hand, tend to remain in full-
time work.5
This, in turn contributes to the gender wage gap, and reinforces the stereotype of a
male breadwinner and a female carer. Without adequate financial and cultural
support for fathers to take periods of leave when their children are born, families
usually revert to the more familiar traditional gendered roles in caring and working.
The Commonwealth Treasury's internal analysis shows that the arrival of children
creates a large and persistent increase in the gender gap in earnings (the
'motherhood penalty'), averaging 55 per cent in the first five years following birth.
This results from a result of the combination of mother's lower participation rates,
reduced working hours and reduced hourly wage. These differences are not driven
purely by economic reasons or differences in preferences between the genders.
Around one-third of mothers are the primary breadwinner in their household prior to
birth but these mothers experience a similar decline in earnings to mothers who are
secondary earners prior to birth. Rather, they reflect cultural norms that reinforce the
allocation of caring responsibilities in Australia. KPMG estimates that care and
family duties account for 39 per cent of the gender pay gap.
In contrast, the proportion of men who use primary carer parental leave in Australia
is very small (0.5 per cent of parents using the scheme in 2017-18 were men). In
2020-21, only 89,784 fathers and partners received DaPP (this accounts for only
around 30% of births each year, and around 35% of all PPL claimants).
Consistent with trend observed among DaPP claimants, men are less likely to take
primary carer's leave. 2020-21 WGEA data shows that, while there has been an
increase in the uptake of primary carer's leave by men (particularly amongst men in
management roles), men are still less likely to use these benefits. Women account
for 88% of all primary carer's leave taken and men account for just 12%.6 The
current PPL policy settings have received recurring criticism for reinforcing gender
5 "Parental leave: Where are the fathers?" OECD Publication 2016; "Fathers' childcare and parental leave policies: Evidence
from Western European Countries and Canada" Reich et al. Hamburgisches WeltWirtschaftsInstitut (HWWI) Research
Paper 115, 2012; "Promoting gender equality through regulation: the case of parental leave" Miriam Rocha, The Theory
and Practice of Legislation, 2021.
6 "2020-21 Data Snapshot", February 2022, Workplace Gender Equality Agency
9
inequities in caregiving and discriminating against fathers and partners who wish to
take up a caring role (see section 6).
As anticipated by the Paid Parental Leave Act 2010, there are a number of health
reasons connected to birth parents' (mostly women) uptake of leave following a birth.
This includes time to recover from birth and to breastfeed a child. These
requirements influence the ways in which parents split leave, and are understood to
be amongst the key drivers of birth parents using the majority of parental leave
entitlements.
Data on take up of PPL indicates that in most families, it is women who access the
government-funded scheme. The current policy settings, which provide a separate
two week DaPP payment to fathers and partners that cannot be taken in conjunction
with other paid leave, may make it harder for fathers and partners to take significant
time from their jobs to bond with and care for their baby.
Similarly, the claim hierarchy, which requires the birth mother to be a primary
claimant and the father/partner to be a secondary claimant for PLP may make it
more difficult for fathers and partners to access some or all of the PLP entitlement.
The Workplace Gender Equality Agency reported that that when paid parental
leave is available, men are more likely to take it, and employers play a key role in
normalising parents' utilisation of paid parental leave and of flexible working
arrangements for families.7
Reserving two weeks of the PLP entitlement for each parent will mean that fathers
and partners will continue to be supported to access at least two weeks of payment
under the PPL scheme, but in a more accessible and flexible form.
Introducing a more gender neutral claim process will also support fathers and
partners to access PLP by making it easier for them to claim the payment and
helping to address cultural factors that reinforce gender inequality.
Simplifying access to the PPL scheme for fathers and partners, and supporting both
parents to access the PLP entitlement, may encourage more fathers and partners to
take time off work after a birth allowing mothers to return to work where they wish to
do so.
Address the common assumption that the primary carer, usually the mother, is the
lower income earner in a relationship
Current PPL policy settings do not fully reflect the fact that the composition of the
workforce is changing. Under existing income testing rules, disparity in eligibility has
emerged over time, depending on income distribution within a family. There are more
women in work, and many work more hours than ever before. Based on annual
income data published by the Australian Bureau of Statistics, we know that between
2010-11 and 2019-20 the number of women with a taxable income of over $150,000
increased 2.5 times, from 99,800 to 249,723.
7"Towards gender balanced parental leave: Australian and international trends", 2017, Workplace Gender Equality
Agency; "Developing a Leading Practice Parental Leave Policy: A guide for employers", 2022, Workplace Gender Equality
Agency.
10
Under the current income testing rules, families in which a mother earns up to
$156,647 can access PLP even if her partner earns a high income. Whereas, a
family in which the mother has earned a little more than $156,647 (even where the
partner had no income or the partner income was much lower) would not be entitled
to PLP, creating a disparity across families with different combined incomes. There
are criticisms that the current scheme is unfair to families where the mother is the
higher income earner, and her partner will be the primary carer for a child. Removing
the expectation that the primary carer (usually the mother) is the lower income
earner in the relationship would help to address those criticisms.
Businesses and Paid Parental Leave
Employer-funded paid parental leave (either to both women and men, or to women
only), is offered by 3 in 5 employers (60%). The Government-funded scheme is
offered in addition to these arrangements (Workplace Gender Equality Agency
(WGEA), 2022).8
Access to parental leave continues to be highly dependent on the size and industry
of the employer. Half of all employers reporting in the WGEA 2020-21 dataset offer
paid parental leave for secondary carers--the average length of primary carer's
leave is 10.8 weeks while the average length of secondary carer's leave is 2.3
weeks.
The data also showed that most employers offer paid parental leave regardless of
gender. While 91% of organisations that provide primary carer's leave make no
distinction between women or men taking that leave, 9% of organisations provide
primary carer's leave solely to women.9
Paid parental leave is most likely to be offered by large organisations, with 8 in 10
employers with 5,000 or more staff offering primary carer's leave to all, regardless of
gender.
In terms of length of primary carer's leave, the most common length of paid primary
carer's leave offered is between 7-12 weeks (23%). Less than 1 in 10 employers with
paid parental leave offer 18 weeks or more.10
Flow on impacts to businesses and the economy
Parents taking time away from the workforce to care for a newborn or newly adopted
child may have some impact on businesses, particularly due to parents taking longer
periods of unpaid leave following their paid parental leave. It is an objective of the
Paid Parental Leave Act 2010 is to signal that this is part of the usual course of life
and work for all parents.
8
"2020-21 Data Snapshot", February 2022, Workplace Gender Equality Agency; "Australia's gender equality scorecard",
February 2022, Workplace Gender Equality Agency.
9
"Australia's gender equality scorecard", February 2022, Workplace Gender Equality Agency.
10
"Australia's gender equality scorecard", February 2022, Workplace Gender Equality Agency.
11
We are not able to quantify the impact this may have upon businesses in terms of
women's workforce participation and any impacts on the functioning and profits of
businesses.
2. Why is Government action
needed?
The PPL scheme is intended to complement employer-provided parental leave
entitlements in order to extend the average length of leave taken by employed
parents after childbirth and to provide a minimum entitlement for self-employed
women, and women without access to employer-provided leave. The PPL scheme is
fully funded by general revenue and administered by the Commonwealth
Government. The objectives of government action are outlined below.
Government objectives
Improve gender equality by removing the "default" of PLP assuming that birth
parents are primary carers
Currently, under the PPL scheme, PLP 'defaults' to the birth mother, who can
transfer PLP to the father or partner as a secondary claimant. This perpetuates the
societal expectation that women should have primary responsibility for raising
children. As a result, women are routinely disengaged from paid employment
following the birth or adoption of their child.
The PPL scheme is only one of a number of mechanisms that may influence the
cultural change required to remove the assumption that caring for children is
primarily the work of women (see challenges and barriers section below). This policy
aims to address this issue by encouraging working families to engage actively with
PLP and decide how they will share the available entitlement to support caring for
their child.
When the PPL scheme was introduced on 1 January 2011, an effective
communication campaign was conducted to alert new or expecting parents to the
existence of the scheme and encourage them to apply for payments. Similar
messaging was used leading up to and following the introduction of DaPP on 1
January 2013. This messaging has continued, to attempt to encourage fathers and
partners (usually men) to access the two week DaPP entitlement.
As a prominent announcement as part of the Budget, media attention afforded to
changes to the PPL scheme will also be of assistance in publicising the new features
and eligibility criteria.
Increase flexibility for families by allowing parents to take PLP concurrently
Under the current PPL scheme, claimants sharing PLP are not able to take PLP on
the same day as each other, which limits the extent to which parents are able to care
for a new child simultaneously. Under the new proposal, claimants may take days
12
concurrently, which will improve the flexibility of the scheme and allow new parents
to use their leave in the way that best suits their family and work obligations.
Encourage more parents to take time off work after a birth by reserving two weeks of
PLP as a 'use it or lose it' entitlement for each parent
Currently under the PPL scheme, a two week use it or lose it entitlement is reserved
for use by fathers and partners in the form of DaPP, which cannot be taken at the
same time as employer-paid leave. Under the new proposal, each parent must take
at least two weeks of PLP in order for the family to receive the full 20 week
entitlement. This signals that parenting is an equal partnership that should be shared
between parents. Further, research shows that reserving periods of leave specifically
for men results in increased uptake of leave.
Alternatives to Government action
As an alternative to amending the Government-funded PPL scheme, the role of
businesses in paying parental leave could be encouraged - either by policy or
legislation. Businesses who have the capacity to do so may be encouraged to
increase paid parental leave to employees as an incentive in the absence of a more
generous government scheme.
At present, businesses that do not offer paid parental leave (around 40% of all
employers according to 2021 WGEA reporting) claim they do not provide payment
on the basis that they are unable to afford it and/or that the current government
scheme is sufficient for employees.
Challenges and barriers
There a number of barriers to improving gender equality, women's workforce
participation, and encourage shared caring of children.
Cultural and societal norms
At present and historically, an expectation has been placed upon women to leave the
workforce following the birth of a child, and assume responsibility for the care of that
child and of the home. This issue is not specific to Australia, and is prevalent across
the world.11
The proposed changes (see options 2 and 3) aim to change these norms, and
encourage women's reengagement with paid work and increase men's engagement
with childcare.12 Shifting societal norms is difficult and these changes will take time
to have an effect. In the immediate term, these changes will provide families with the
opportunity and flexibility to make decisions that suit them while also encouraging
greater sharing of parental responsibilities.
Administrative complexities
The increased flexibility of the PPL scheme may pose administrative concerns to
families and businesses, who will need to balance parental leave against work
requirements. The intended flexibility may not be achievable for all businesses or all
11 "Promoting gender equality through regulation: the case of parental leave" Miriam Rocha, The Theory and Practice of
Legislation, 2021.
12 "Parental leave: Where are the fathers?" OECD Publication 2016 (OECD).
13
employees as business continuity must be maintained, particularly for small
businesses.
Economic concerns
While the proposed changes intend to encourage more equal use of PPL by both
parents, as PPL is paid at a rate based on the national minimum wage it is likely that
the higher earner in a couple (often the father) will return to work earlier in order to
maintain the family's financial stability.
3. What policy options are you
considering?
Three policy options have been considered:
• Option 1 proposes to retain current policy settings (as described in the
Background section of this document)
• Option 2 proposes to implement settings in the 2022-23 March Budget measure
to: combine DaPP and PLP into a single payment, introduce a family income test
($350,000), and make PLP entitlements fully flexible.
• Option 3 proposes to build on the changes in Option 2 to:
o introduce gender neutral claiming, such that either parent can claim PLP
first;
o reserve two weeks of PLP as a 'use it or lose it' entitlement for each
parent; and
o allow parents to take PLP concurrently.
Each of the options is described in detail below.
Option 1 - Status Quo
Under this option, no amendments would be made to the PPL scheme, leaving the
current policy parameters (as described in the background section) in place.
This option would see the PPL scheme continue to operate closely based on the
Productivity Commission's 2009 recommendations and settings. This option would
not have any additional costs and would continue to support fathers and partners of
the birth mother through their own specific payment and eligibility requirements,
supporting all eligible claimants with a newborn or adopted child to make a claim for
payment, without the explicit need for an eligible birth mother.
It would also provide the Government more time to consider and evaluate the
introduction of the 1 July 2020 flexibility measure (which introduced 6 weeks of
flexible PPL), and if take up of the option and transfers of payments to secondary
claimants increases as more families become aware of these arrangements.
Services Australia continues to alert PLP recipients of their ability to access six
weeks of their PLP flexibly at the time they claim. In 2020-21, less than 10 per cent
of PLP recipients used their entitlement flexibly.
For a detailed description of current policy settings please refer to the Background
section.
14
Option 2 - Implement the settings announced in 2022-23 March
Budget to combine DaPP and PLP into a single payment, add a
family income limit of $350,000 and increase the flexibility of
PLP
This proposal would seek to combine the current payments under the PPL scheme
into a single, flexible 20-week entitlement, that working families can use to support
their specific circumstances.
This proposal would simplify sharing PLP, supporting families to better balance work
and caring responsibilities. Eligible working parents will be able to share PPL
entitlements between them as much, or as little, as works for their specific
circumstances within two years of their child's birth or adoption.
A single payment under the PPL scheme will assist to further promote equality
between mothers and fathers, by providing equality of opportunity in relation to both
work and care. It also continues to support the health and wellbeing of birth mothers,
with women able to take the amount of PLP that works for them.
The health and development objectives of the PPL scheme would also continue to
be supported by retaining the current claim hierarchy, which requires that a birth
mother claim as a primary claimant first, with the ability to transfer all or part of the
entitlement to the father or partner, provided both meet the eligibility criteria. This
allows the birth mother to keep the entitlement if she chooses.
The claim hierarchy is described below:
• The primary claimant (birth mother) must meet the work test and residency
requirements.
• The primary claimant (birth mother) will be assessed against the individual
income test (currently $156,647).
• If the primary claimant (birth mother) fails the individual income test, the
claimant can be assessed under a family income test of $350,000.
• If found eligible, the primary claimant (birth mother) can transfer PLP to an
eligible father/partner, who also needs to meet the work, income and
residency tests.
Once eligibility has been determined through the claim hierarchy, families in which
both parents are eligible will be able to share 20 weeks of PLP flexibly between
them.
The family income test is at a level that ensures that families in which both parents
are earning over the individual income test by a small amount will still be able to
access the scheme.
Option 3 - Introduce gender neutral claiming, 'use it or lose it'
PLP, concurrency, and additional weeks
From 1 July 2023, this proposal would seek to improve gender equality and flexibility
of the PPL scheme, by reforming the claim hierarchy to make it more gender neutral,
15
reserving two weeks of PLP for each parent and allowing parents to take PLP
concurrently. These changes would be implemented in addition to settings outlined
in Option 2.
These changes will make it easier for fathers and partners to access PLP, as the
entitlement will no longer "default" to the birth parent. Rather, families can decide
who should lodge their claim for PLP first.
The permission of the birth parent will be required for the non-birth parent to become
the primary claimant, to help mitigate instances of family and domestic financial
violence being perpetrated by an abuser claiming the majority of PLP entitlements.
This will prevent non-birth parents from using the majority of the payment without
awareness or permission from the birth parent, which may be used to perpetrate
financial abuse or coercive control. There is no similar risk of this being done without
the birth parent's knowledge under the status quo or option 2.
The removal of the claim hierarchy will also extend eligibility for PLP to fathers and
partners who are currently excluded when their partner is not residentially qualified.
This change will address a recurring criticism of the current setting as being
discriminatory.
Similarly, the income test will be applied to claimants individually, meaning non-birth
parents will not be precluded from accessing PLP on the basis of their partner's
income.
Eligibility criteria regarding the work test will remain unchanged; if the birth parent
does not meet the work test, the non-birth parent will not be able to access PLP.
This amendment will also reserve two weeks of PLP for each parent to use on a 'use
it or lose it' basis. This will result in a maximum entitlement of 18 weeks per parent.
This is intended to incentivise parents to take at least two weeks of PLP each, and
signals that caring for a new child is the responsibility of both parents.
The flexibility of the scheme will be improved by allowing parents to take PLP days
concurrently, which is not possible under the current arrangements, or under Option
2.
The length of the scheme will be increased in a phased approach to a maximum of
26 weeks by 1 July 2026.
4. What is the likely net benefit
of each option?
Option 1 - Status Quo
The PPL scheme is intended to complement employer-provided parental leave
entitlements in order to extend the average length of leave taken by employed
16
parents after childbirth, and to provide a minimum entitlement for self-employed
women and women without access to employer-provided leave. The PPL scheme is
closely based on the scheme proposed by the Productivity Commission, an
independent research and advisory body. In its 2009 inquiry report, the Productivity
Commission recommended a Government-funded parental leave payment of 18
weeks, noting that the benefits of funding a payment for more than 18 weeks would
not be worth the additional costs of forgone spending on other areas such as health
and child care. The Productivity Commission also recommended a paternity leave
payment of two weeks for fathers and partners.
The current PPL scheme is designed to ensure the primary carer of a child, whoever
that may be, is supported. The PPL scheme was amended in 2020 to increase the
flexibility of the PPL scheme by making it easier for the last six weeks of PLP to be
shared between parents, and allowing it to be used any time within two years of the
birth or adoption of a child, in blocks as short as one day. It is important to note that
many women may choose to take the full 18 weeks of PLP to maximise their time
with their baby.
The significant take-up rate of PLP by women suggests that the PLP component has
been effective in supporting working women financially. Latest data shows that since
1 January 2011, nearly 1.75 million people have received PLP, and the rate of take-
up continues to increase over time. Data shows that the number of PLP recipients
has grown from around 132,000 in 2012-2013 financial year, to around 170,000
annually, since 2015-16 financial year.
Similarly, there has been an increase in DaPP claims, with around 750,000 fathers
or partners receiving the payment since the measure was introduced. Take-up of
DaPP has also increased steadily over time, from around 75,000 claimants per year
following its introduction, to around 90,000 recipients each year at present, while the
birth rate has remained relatively static.
The 'use it or lose it' characteristic of the DaPP component of PPL may have
incentivised many fathers and partners to take leave where they would not have
otherwise. It has also allowed fathers and partners to take leave concurrently with
mothers (who may be taking PLP) to support child-caring duties while mums recover
from childbirth.
Evidence from an independent PPL evaluation, conducted by University of
Queensland over a four year period, from 2010 to 2014, found that the introduction
of PPL allowed mothers to take additional time away from paid work following the
birth of their children. The main effects of the scheme arise from the additional time
mothers were able to take, and the financial security that was provided by a
guaranteed income for up to 18 weeks.
Key evaluation findings were that:
• PPL delayed mothers' return to work during the first six months following a
birth, so that more mothers stayed at home for at least 18 weeks after the
birth of their baby.
• PPL also slightly increased mothers' tendency to return to work in the longer-
term, so that more mothers had returned to work by 12 months after the birth
of their baby.
17
• The impact of PPL in delaying mothers' return to work was most pronounced
amongst lower income mothers and those with lower formal education,
including those on casual employment contracts.
• PPL had a large effect in extending self-employed mothers' time off work
during the first six months.
• PPL increased employers' retention of mothers when they returned to work.
This effect was most pronounced amongst mothers with lower levels of formal
education.
• PPL produced small improvements in mothers' health, extended
breastfeeding duration, and probably improved babies' health slightly.
• The additional time and income security provided by PPL reduced the
proportion of mothers who felt rushed and pressed for time, thus enhancing
work-life balance.
This option will have no regulatory impacts.
Option 2: Implement the settings announced in 2022-23 March
Budget to combine DaPP and PLP into a single payment, add a
family income limit of $350,000 and increase the flexibility of
PLP
Regulatory impacts
It is estimated that in the first year of implementation, around 181,000 parents would
be impacted under this option, including around 2,200 new entrants who would not
have qualified under current policy settings.
Combine DaPP and PLP into a single payment, increasing the PLP entitlement
to 20 weeks
Impact on Individuals
Under this Option, it is expected that around 94,000 DaPP claimants will no longer
need to separately claim DaPP as well as PLP. Estimating that it takes an average
of 1 hour to complete a DaPP claim form, and using the non-work-related labour cost
of $36/hour, this would result in a regulatory save for individuals of 1 hour x $36 x
94,000 individuals = $3,384,000.
However, it is expected that around 70,500 of these 94,000 claimants will claim PLP
as a secondary claimant instead of claiming DaPP. Note that 23,500 former DaPP
recipients will be precluded from accessing the scheme due to the work status of the
birth parent. Estimating that it takes an average of 1 hour to complete a PLP claim
form, and using the non-work-related labour cost of $36/hour, this would result in a
regulatory burden for individuals of 1 hour x $36 x 70,500 individuals = $2,538,000.
In addition, it would take approximately 10 minutes for a primary claimant to transfer
PLP to each of these secondary claimants. This would result in an additional
regulatory burden for individuals of 0.17 hours x $36 x 70,500 individuals =
$431,460.
The total regulatory save for individuals under this Option is $414,540.
18
Impact on Business
Currently, around 65 per cent of PLP recipients receive their payment from their
employer under the scheme's employer role. It is expected that there will be around
181,000 PLP recipients under this measure. Assuming 65 per cent of these also
receive PLP from their employer, approximately 117,650 individuals will receive PLP
from their employer. Under this measure, it is expected that these employers will
continue to provide PLP to these recipients, but for a period of up to 20 weeks rather
than 18 weeks. The regulatory impact of this is expected to be minimal, as the extra
two weeks for eligible claimants would be provided under existing systems and
processes. It is estimated that it will take employers approximately an additional 10
minutes to process the additional 2 weeks payment to their employees. Using the
work-related labour cost of $79.63/hr, the regulatory burden is expected to be 0.17
hours x $79.63/hr x 117,650 employees = $ 1,592,640.
The total regulatory burden for business under this measure is $1,592,640.
Amend the income test to allow claimants who do not meet the individual
income threshold of $156,647 to still qualify under family income test of
$350,000
Impact on individuals
Under this measure it is expected that an additional 2,200 individuals will be eligible
for PLP. Based on an estimated 1 hour to complete the claim form, this would result
in an estimated regulatory burden for individuals of 1 hour x $36 x 2,200 individuals =
$79,200.
The total regulatory burden for individuals under this measure is $79,200.
Impact on Business
An additional 2,200 claimants will become eligible to access PLP under this
measure. Applying the same 65 per cent rate of employer payment, approximately
1,430 additional individuals will receive PLP from their employer. It is estimated that
it will take employers approximately 100 minutes to process these payments to their
employees. Using the work-related labour cost of $79.63/hr, the regulatory burden is
expected to be 1.67 hours x $79.63/hr x 1,430 employees = $190,164.
The total regulatory burden for businesses under this measure is $190,164.
19
Regulatory burden estimate (RBE) table
Average annual regulatory costs
Change in costs ($ Individuals Business Community Total
million) organisations change
in cost
Total, by sector $ $ $ $
Combine DaPP and 0.41 1.59 1.18
PLP into a single
payment, increasing
the PLP entitlement to
20 weeks
Amend the income test 0.79 0.19 0.27
to allow claimants who
do not meet the
individual income
threshold of $156,647
to still qualify under
family income test of
$350,000
Total -0.34 1.78 $0 1.45
Social and Economic Impacts
Costs
By combining DaPP with PLP, families will be given more choice, but some fathers
may also be disincentivised to access PPL. Both domestic and global evidence
suggests that when given a choice to nominate a primary carer to take leave after a
birth, fathers would commonly transfer their rights to mothers (please refer to Risks
and Sensitivities below for impacts). Mothers may benefit from this transfer in the
interests of health and breastfeeding (mentioned above). Despite the increased
flexibility for fathers to use PPL under this option, the likelihood of fathers using the
scheme without a 'take it or leave it', non-transferrable component is small according
to current usage patterns.
An equal system of PPL is just one step of the journey to a parent equality model.
Cultural change is essential. For example, it is important that men do not feel a
stigma for taking leave after the birth of a child.
It is expected that around 23,500 DaPP recipients, who under the current scheme
can access two weeks of DaPP payment when their partner does not meet the work
test, would not be eligible under this Option. These are mostly fathers who are the
sole income earners of the family, whose partners do not meet the primary
claimant's work test to qualify for the revised PLP scheme. This represents a real
save of $38 million, assuming that all DaPP recipients would use the entire period.
Benefits
Increasing the eligibility, access and duration of payment under the scheme aim to
further assist families with cost-of-living pressures. In particular, in 2023-24, around
181,000 families who would typically access PLP but not DaPP, would benefit from
the policy change. This is particularly beneficial to single mothers, who currently
20
have access to PLP but not DaPP. The changes to the income threshold will also
provide access to the payment to around 2,200 new entrants (typically higher income
mothers) who previously could not access the scheme. Increased flexibility to
balance work and care in a way that best suits family needs may also assist families
to have the more productive and higher paid member of the household return to
work, regardless of their gender, boosting family incomes and productivity in the
broader economy.
These changes would also equalise access to PPL. Unlike the current DaPP policy,
fathers and partners would be able to access payment under the PPL scheme at the
same time as any employer-funded leave, as is the case for PLP, which is currently
predominantly used by mothers.
Changing the scheme will assist individuals by increasing the fairness of the income
test, and removing the incorrect assumption that mothers are never the primary
breadwinner in a heterosexual relationship. The current PPL has been criticised for
not supporting gender equality.
The composition of the workforce is changing and under existing income testing
rules gender disparity in eligibility is evident. Depending on income thresholds, a
mother who earns more than the father/partner can be ineligible for PLP. Mothers
who earn up to $156,647 can access PLP even if her partner earns a high income,
but a family in which the mother has earned more than $156,647 (even where the
partner had no income or the partner income was much lower) is not be entitled to
PLP. Addressing the income test to allow mothers to access the family income test, if
needed, increases the flexibility, which aims to better support equality of opportunity
for working mothers and fathers/partners and alleviate the risk of the scheme being
seen as discriminatory.
Generous and flexible paid parental leave policies are used by many businesses to
recruit and retain skilled staff. However, many Australians work for small businesses
or are self-employed, and are therefore unlikely to be able to access these schemes.
Increasing the generosity, flexibility and eligibility for the Government scheme
increases the base on conditions parents are entitled to after birth, and helps small
businesses to continue to retain valued staff after childbirth. Increasing the flexibility
of the scheme also increases the likelihood that the government scheme
complements employer-funded schemes. It may also encourage more private
employers to increase the generosity and flexibility of those schemes,
complementing the Government scheme, further benefiting new parents.
A single, flexible payment under the PPL scheme will help address expectations that
women are predominantly responsible for child care post birth, and taking time out of
the labour force to care for children. Creating a single payment seeks to support
increased equality of opportunity in relation to both work and care. These changes
would also equalise access to PPL, with eligible fathers and partners being able to
access the Government's PPL scheme at the same time as employer-funded leave,
as is the case for PLP, which is currently predominantly used by mothers. One
reason why take-up of DaPP was relatively low may be because the replacement
wage of the payment at minimum wage was unaffordable for some families. Under
current policy settings, DaPP cannot be taken at the same time as other paid leave.
21
The ability to receive paid leave from an employer concurrently with PLP increases
the replacement wage available to fathers, and may therefore encourage more
fathers to utilise PPL, where it best suits their family. Encouraging more equal
sharing may have significant benefits for women's participation and the broader
economy. Greater engagement of fathers early in children's lives is also beneficial
for child development, and to the mental wellbeing of fathers.13
Second round economic impacts
There is a possibility that these policy changes will impact the gender pay gap,
women's workforce participation, children and their wellbeing, and society as a
whole. Should the policy have the desired behavioural impact, children may benefit
from additional care in the home and time to bond with both parents. However, the
evidence available to date is not sufficient to make a concrete assessment of the
impact or quantitative outcome of these changes against these metrics.
Risks and Sensitivities
While the PLP entitlement defaults to the birth parent, they are able to transfer some
or all of it to their partner, if they take on primary care of the child and meet the
eligibility requirements. This will allow fathers to access all 20 weeks of PLP, if that is
the family preference. There is a risk that one parent may use all 20 weeks
entitlement, and it is more likely that the birth parent will use the entirety of the
entitlement. While the Government considers that families should be in charge of
their choices, advocates of greater engagement by both parents may see this as a
step backwards in the pursuit of gender equality in childrearing, particularly in
encouraging men's engagement in childcare. This may represent an opposite effect
to the intentions of the policy and reinforce caring stereotypes.
The exclusion of 23,500 claimants from the former DaPP cohort may be criticised as
being unfair for families where the birth mother does not meet the work test.
However, the core purpose of the PPL scheme is to provide support for working
families, where both parents are engaged in paid work.
Option 3 - Introduce gender neutral claiming, 'use it or lose it'
PLP, concurrency and additional weeks.
Regulatory impacts
This Option will build on the amendments to the PPL scheme in Option 2 in order to
introduce gender neutral claiming, reserve two weeks of PLP for each parent, and
allow parents to take PLP concurrently. It is estimated that in the first year of
implementation, around 181,000 parents would benefit from this measure, including
around 4,000 new entrants who would not have qualified under current policy
settings.
13"Parental leave: Where are the fathers?" OECD Publication 2016 (OECD); "Fathers' childcare and parental leave policies:
Evidence from Western European Countries and Canada" Reich et al. Hamburgisches WeltWirtschaftsInstitut (HWWI)
Research Paper 115, 2012.
22
Introducing gender neutral claiming
Impact on Individuals
Under this measure, it is estimated that an additional 4,000 non-birth parents and
partners each year will be eligible for PLP - 2,200 birth parents due to the family
income test and 2,600 fathers and partners due to gender neutral claiming.
Estimating that it takes an average of 1 hour to complete a PLP claim form, and
using the non-work-related labour cost of $36/hour, this would result in a regulatory
burden for individuals of 1 hour x $36 x 4,000 individuals = $144,000.
The total regulatory burden for individuals under this Option is $144,000.
Impact on Business
Assuming a 65 per cent rate of employer payment to the 4,000 new entrants,
approximately 2,600 additional individuals will receive PLP from their employer under
this measure. It is estimated that it will take employers approximately 100 minutes to
process these payments to their employees. Using the work-related labour cost of
$79.63/hr, the regulatory burden is expected to be 1.67 hours x $79.63/hr x 2,600
employees = $345,756..
The total regulatory burden under this Option is $345,756..
Reserve two weeks of PLP for each parent on a 'use it or lose it' basis
Impact on Individuals
It is estimated that in around 85% of families, fathers and partners will claim PLP in
order to access at least two weeks of PLP to use the 'use it or lose it' component of
the entitlement, who would otherwise not have claimed PLP. This represents the
fathers and partners who are not captured in the DaPP cohort mentioned in Option
2. Based on an estimated 1 hour to complete the claim form, and using the non-work
related labour cost of $36/hour, this would result in an estimated regulatory burden
for individuals of 1 hour x $36 x 154,000 individuals = $5,544,000.
The total regulatory burden for individuals under this Option is $5,544,000.
Average annual regulatory costs
Change in costs ($ Individuals Business Community Total
million) organisations change
in cost
Total, by sector $ $ $ $
Introducing gender 0.14 0.35 0 0.49
neutral claiming
Reserve two weeks of $5.54 0 0 5.54
PLP for each parent on
a 'use it or lose it'
basis
Including Option 2 -0.34 1.78 0 1.45
amendments
Total 5.34 2.13 0 7.48
23
Social and Economic Impacts
Costs
It is expected that around 23,500 DaPP recipients, who under the current scheme
can access two weeks of DaPP payment when their partner does not meet the work
test, would not be eligible under this Option. These are mostly fathers whose
partners (the birth mother) do not meet the primary claimant's work test to qualify for
the revised PLP scheme. This represents a real save of $38 million, assuming that
all DaPP recipients would use the entire period.
The 'use it or lose it' provision requires that each parent use at least two weeks, and
caps parents at a maximum of 18 weeks (excepting single parents). There is a risk
that some families may not claim the 'use it or lose it' period and would therefore be
financially worse off than if either parent were able to claim the full 20 weeks.
However, this must be balanced against the core policy intent of engaging both
parents in caring for a child. The Enhanced Paid Parental Leave for Families
proposal was criticised by stakeholders for removing the 'use it or lose it' period, as
advocates were concerned this would result in reduced access to payments under
the PPL scheme by fathers and partners than under current policy settings.
Benefits
Reserving two weeks of PLP for each parent will signal that taking time off work to
care for a new child is the responsibility
of both parents, contributing to changing social norms around gender roles in caring
for children after a birth. Under this Option, both parents will be supported to take at
least two weeks off work after a birth or adoption. Research has shown that there are
benefits for children in fathers taking leave after a birth, as well as flow on impacts
for the division of unpaid work and care responsibilities within a family. Each
incremental increase (from 20 weeks to 26 weeks) will add further 'use it or lose it'
weeks, encouraging and supporting new fathers to take additional time away from
work following the birth of a child. The policy intends to promote men's increased
uptake of leave and work towards balancing caring and unpaid work within the
home.
The introduction of gender neutral claiming for PLP will indicate that it is appropriate
for both parents to access the payment. The current claim hierarchy that requires a
birth parent to be a primary claimant for PLP may be interpreted as signalling that
PLP is intended for birth parents only. Under this Option, either parent will be able to
claim PLP, based on the intended care arrangements of the family.
Allowing parents to take PLP on the same day would further enhance flexibility for
parents in how they access PLP under the PPL scheme. This measure aims to
support parents to take time off together in the initial period after birth where they
wish to do so for boding, or to allow a non-birth parent to support a birth parent
during the post-birth recovery period.
It is intended that new policy settings will encourage more women to reengage with
the workforce soon after welcoming a new child. While the gender pay gap in
Australia has been linked in part to women's temporary disengagement from the
workforce after they become parents, at this stage we are unable to comment on
24
whether the policy will have immediate or direct impacts upon closing the gender pay
gap. Women's increased workforce participation may have impact on business
profitability or encourage economic growth, however this cannot be quantified.
What does this do that Option 2 does not?
Option 3 goes further towards the government objectives of flexibility and gender-
neutrality, and responds to stakeholder and advocate calls for additional weeks of
paid parental leave.
Option 3 offers significantly more flexibility than Option 2, particularly in permitting
parents to take PLP on the same day. Further, Option 3 actively removes the default
setting that the birth mother is the primary claimant of PLP for a child; fathers and
partners may access PLP first, and residentially and/or income qualified fathers and
partners may access PLP without being precluded due to the income or residency
status of the birth mother.
Finally, Option 3 will gradually provide additional weeks to new parents, in response
to advocacy from key stakeholders.
Risks and sensitivities
'Use it or lose it'
Reserving a portion of PLP for each parents means that a family cannot access the
full 20-week entitlement unless both parents take at least two weeks of PLP each.
This may not have the intended effect of increasing participation by fathers and
partners. Research has shown that longer periods of reserved leave at a higher rate
of pay are required to boost men's participation.
Introducing a 'use it or lose it' component to PLP may be criticised for reducing
flexibility for parents and the maximum number of weeks that can be used by each
parent, compared to the settings under Option 2.
25
5. Who did you consult and
how did you incorporate
their feedback?
Consultations to date
To date, the department has consulted within the government, including with the
Commonwealth Treasury, Office for Women and Services Australia.
While there have been no public consultations on the specific PPL policy proposals
put forward in this document, each option has been informed by public feedback
and calls for the Government to reform the PPL scheme, following the 2022-23
March Budget announcement and the September 2022 Jobs and Skills Summit. This
includes:
• ministerial correspondence,
• media articles,
• pre-budget submissions from stakeholders,
• petitions from members of the public (including those formally presented to
parliament),
• feedback from industry groups, and
• feedback from research bodies and think tanks.
The Jobs and Skills Summit, held 1-2 September 2022, provided an opportunity for
businesses, employers and unions to bring Government's attention to matters of
particular importance for working Australians. Among these matters was paid
parental leave. The participants collectively agreed that an extension of Australia's
PPL scheme from 18 to 26 weeks was of first priority, noting also that adding
superannuation to PPL was also a high priority, in the interests of boosting women's
superannuation balances at retirement. In requesting 26 weeks, stakeholders have
referred to the recommendation from the World Health Organisation that at least six
months be made available to new mothers to promote child and maternal wellbeing,
build strong bonds, and promote breastfeeding.
The table below lists some of those sources.
The key learnings from engagement with stakeholders are as follows:
• universal support of an increase to the length of time (generally 26 weeks,
some supporting 52 weeks) offered under the PPL scheme;
• some stakeholders are supportive of an increased rate of pay, relative to an
individual's annual income rather than National Minimum Wage;
• criticism of eligibility/access to PLP being contingent on the birth mother's
eligibility, in particular income and residency tests, which preclude working
fathers from accessing PLP; and
26
• general support for improved gender equality and gender-neutral access to
the PPL scheme, including supporting fathers to stay home with children and
mothers to return to the workforce.
This feedback was taken into account when creating the new policy settings under
Option 3, particularly when introducing gender-neutral claiming, the family income
test, improving flexibility of the scheme, and adding additional weeks.
Payment of PLP at an increased rate is not being considered; payment at a rate
based on National Minimum Wage ensures that all recipients are paid equally
regardless of their pre-birth income. Some stakeholders have pointed to schemes
used in other countries where claimants are paid at a percentage of their income;
these discussions have not accounted for the structure of these other schemes,
wherein participants contribute to the scheme as a percentage of their income rather
than receive payments from general taxation.
Source Quotes
"Advocates call for Advocacy group The Parenthood is calling on the
expansion of paid government to increase the amount of paid parental
parental leave" leave to 52 weeks, along with allowing for universal
The New Daily access to early childhood education.
19 September 2022 It comes as the Greens flagged plans to introduce a bill
to Parliament that would entitle people to 26 weeks of
paid parental leave.
Under the party's proposal, parental leave would be
paid at the same rate as the carer's wage or salary up
to $100,000 per year - meaning a maximum of $50,000
in leave payments over the full 26 weeks.
Parents would also have "use it or lose it" incentives in
order to encourage shared parenting.
Greens Senate leader Larissa Waters said fairer paid
parental leave would benefit the broader economy as
well as parents.
"The fairer paid parental leave bill will reduce the
amount of time women are missing a pay cheque and
provide families with more incentives, and more
support, to share caring responsibilities more fairly," she
said.
Thrive by Five director Jay Weatherill has also backed
plans for an increase in paid parental leave from 18 to
26 weeks.
Mr Weatherill said a bonus two weeks should be
provided if it is shared between parents. And the
scheme should expand to 30 weeks of leave by 2025.
27
"Push for 26 weeks' "At least three groups are calling for the Australian
paid parental leave in Public Service to offer 26 weeks of paid leave to both
APS emerges in partners after the birth or adoption of a child. The
legislation review" Australian Public Service Commission is reviewing
The Mandarin parental leave through the now-outdated Maternity
Leave Act 1973, with findings to be reported to the
14 February 2022
federal government early this year"
"Dad Days" "The income and work tests that people need to pass to
Grattan Institute get leave should be changed to make leave available to
a broader range of families.
September 2022
The income test should be based on household income
rather than the mother's income. This would remove
one of the inequities in the current design, where
households with male breadwinners are favoured over
households with female breadwinners. The income
threshold would need to be increased accordingly, and
could be set as to exclude a similar proportion of very
high-income households."
"Enhancing work-life "Preferably the scheme should not be means tested and
balance: A better should be used to promote all parents to move to a
system of Paid Parental caring equality model even where one parent earns less
Leave" than another"
KPMG and Business
Council of Australia
April 2021
"Men at Work: "[T]he birth mother is still the gatekeeper... which
Australia's Parenthood creates some anomalies: if there's a family where a
Trap" woman earns $155,000 a year and her husband earns
Quarterly Essay, $40,000, and they decide that the father will be the
Annabel Crabb primary carer, they'll be ineligible for paid parental leave
because the woman earns too much to apply, and thus
September 2019
can't transfer the leave to her husband. But in a family
where the gender positions are reversed, it's not a
problem; the birth mother earns less than the cut-off and
is easily eligible,"
28
"The 'infuriating' rule The rule is an "unintended consequence" because
that penalises when the scheme was designed 10 years ago the
breadwinner mums and notion of stay-at-home fathers were "an afterthought". -
stay-at-home dads" Parents at Work chief executive Emma Walsh. New
mother Anastasia Smietanka was "infuriated" by the
Caitlin Fitzsimmons,
gender inequality. As a barrister in Melbourne she earns
Sydney Morning Herald
over the $150,000 threshold, while her partner Nick
26 January 2020 Lovelock, 33, earns half her salary as a management
consultant. If the roles were reversed, Ms Smietanka
would qualify for the payment. "I was quite outraged that
I was being penalised as someone that chose to go
back to work and the government just assumed or
expected that families would have a father that goes
back to work and the mother wouldn't," Ms Smietanka
said. "I like to work more, I wanted to go back after six
weeks and Nick wanted to stay at home."
"'It's bizarre': Calls for "This is clearly discrimination in the sense of somebody
'discriminatory' law is being treated less favourably than someone of a
which penalises female different sex because of their sex," - Sydney University
earners and stay-at- Associate Professor Belinda Smith. "I am a woman in
home dads to be re- STEM, a physicist, fortunate to be well paid. My
examined" husband is self-employed on very low income. He was
not able to get any support to be a stay-home dad,
9 News
while a couple in the same situation with genders
2 December 2021 reversed would have access without question," -
Melbourne medical physicist Leah Biffin.
"Rudd Government's "... pregnant women may attempt to manipulate their
parental pay scheme own income to meet the income test ... While this may
'unfair to high-income seem fanciful, we are aware of one instance where a
earners'" pregnant lawyer negotiated with her employer to defer
the payment of a bonus into the following tax year so
News.com.au
that she would fall within the income test.'' - Women
21 July 2013 Lawyers' Association of NSW. "If you're a woman
earning $160,000 and you are a sole mother or the
main breadwinner you don't get any payment, but a
woman earning $40,000 whose partner earns $160,000
would be eligible - it seems a bit rich.'' - Sue Price,
PwC.
29
"'Like a kick in the "A payout from her previous employer earlier in the
teeth': Growing calls to year, including long service leave entitlements, meant
change 'ridiculous' her income came in just above the $150,000 threshold.
parental leave rule" Mr Baker, who was working as an electrician at the time
and earning less than $150,000, always planned to
9 News
become a stay-at-home dad when Willow was born. "It
12 May 2021 sort of made sense with the wage gap between me and
Natasha that I would be the one to take time off work. It
was a great opportunity for me to stay at home," Mr
Baker said ... . "I don't see why the man can't be paid.
"It's not called mother's leave anymore like it used to be.
It's called parental leave ... . "It's ridiculous. Everyone is
pushing women to go back into the workforce for the
greater good and they are not rewarding them for that."
"The inherent sexism in If we want diverse businesses, equal pay and for
our paid parental leave parents to have choice on who stays home with the
scheme" baby, then we need the government to amend this
Women's Agenda scheme. Maybe we need a family income test instead,
10 June 2021 like the one used for the childcare subsidy assessment,
but if that meant that less parents would be provided
paternity leave the answer is quite simple. Remove
gender from the equation and assess the income of the
parent wanting to stay home with their child.
Sarah Bailey Petition Dr. Bailey started an online petition in 2021 calling for
changes to be made to the government's parental leave
scheme, which received over 5,500 signatures.
Workplace Gender Insights from the WGEA 2020-21 census on gender
Equality Agency equality for employers of 100 or more employees show
(WGEA) that: 3 in 5 employers are now offering paid parental
leave, the vast majority of those making paid leave
equally available for both parents. It also shows that 6
per cent of employers offer more than 18 weeks,
although the most common length of paid primary
carer's leave is between 7-12 weeks (23% of
employers). Large organisations are the most likely to
offer paid parental leave, with nearly 9 in 10 employers
of 5000+ staff (85%) paying parental leave, compared
to 54% of organisations with 250 staff and less.
The latest WGEA dataset is available to view on a new
interactive data visualiser tool from February 2022,
at data.wgea.gov.au.
30
6. What is the best option from
those you have considered?
Option 1: Status Quo
Under this option, no amendments would be made to the PPL scheme, leaving the
current policy parameters (as described in the background section) in place. This
option would see the PPL scheme continue to operate closely based on the
Productivity Commission's 2009 recommendations and policy settings. Although the
current design of the PPL scheme largely operates to support the objectives of the
scheme, issues have been identified since commencement of the scheme, as
discussed in Section 1. Continuing to operate the scheme under its current design
would leave these issues unresolved.
Option 2: Implement the settings announced in 2022-23 March
Budget to combine DaPP and PLP into a single payment, add a
family income limit of $350,000 and increase the flexibility of
PLP
Option 2 would introduce the below listed changes to the PPL scheme from 2023.
• Create a single payment under the PPL scheme, by combining DaPP with
PLP,
• Amend the income test to allow those who do not meet the individual income
threshold (currently $156,647 per annum) to still qualify for payment if they
meet a family income threshold of $350,000 per annum, and
• Increase the flexibility of PLP so that it can be taken in blocks as small as
one day at a time with periods of work in between, within two years of the
birth or adoption of the child.
The proposed changes would support increased gender equality, by making it easier
for fathers and partners to access payment under the PPL scheme, challenging
gender inequities in caregiving. Under this option, eligible fathers/partners will be
able to access PLP concurrently with paid leave from their employer, where
available, in the same way women can under the current scheme.
Creating a flexible PPL scheme seeks to support increased equality of opportunity in
relation to both work and care. It will also support increased equality of opportunity in
relation to both work and care by allowing more equal access to Government-funded
parental leave after the birth of a child.
The health and development objectives of the PPL scheme would also continue to
be supported by retaining the current claim hierarchy, which requires that a birth
mother claim as a primary claimant first, with the ability to transfer all or part of the
entitlement to an eligible father or partner. This allows the birth mother to keep the
entitlement if she chooses.
31
Combining DaPP with PLP would also provide greater opportunities for fathers and
partners to be more engaged in the early years of their child's life.
This option would also address criticisms that the current scheme disadvantages
families in which the birth parent is the higher income earner in a relationship. Under
this option, women who earn over the individual income threshold will be able to
qualify for payment, however, only if their combined family income is below the
family income threshold, ensuring that the scheme is not extended to parents with a
combined high income.
This income test will also support more fathers and partners to access the payment
in families in which the father/partner is the lower income earner and intends on
taking on primary care of the child.
However, this option does not entirely satisfy the government intentions in amending
the PPL scheme. This is partially due to the removal of a 'use it or lose it'
component, which may result in a decrease in the number of fathers and partners
accessing payment under the scheme. This option also does not provide sufficient
gender neutrality in claiming, and unnecessarily precludes fathers and partners from
accessing the scheme due to the income or residency of their partner. Finally, this
option does not go far enough in providing flexibility and it does not allow parents to
use PPL days concurrently.
Option 3 - Introduce gender neutral claiming, 'use it or lose it',
concurrency and additional weeks.
Option 3 is the best option. This option would introduce the changes under option 2
as well as those below:
• Introduce gender neutral claiming
• Reserve two weeks of PLP as a 'use it or lose it' entitlement for each parent
• Allow parents to take PLP days concurrently
• Increasing the length of the PLP entitlement to 26 weeks.
This option fulfils the government's objectives in amending the PPL scheme. It
provides the additional benefits of a single, fully flexible payment, the introduction of
a family income test, and the benefits of the additional policy changes designed to
increase equality under the PPL scheme.
Introducing gender neutral claim rules, with parents able to nominate the primary
claimant, aims to greatly improve the gender equality of the scheme and remove the
signal that the duty to care for a child should fall on women. It will also remedy the
anomaly which excludes Australian citizens and permanent residents who are non-
birth parents from accessing any PLP due to the residency status of the birth parent.
This anomaly has recently received media attention (see section 5), with Australian
citizen fathers precluded from accessing any PLP due to the residency status of their
partner.
The new proposal also introduces 'use it or lose it' for each parent, which signals that
both parents should take time away from work to care for a child. This responds to
the concerns of stakeholders and advocates, who raised concerns that the 2022-23
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March Budget measure's full flexibility would likely result in birth parents taking all 20
weeks available, to the detriment of men's engagement in caring for children.
Allowing parents to take PLP days concurrently will further improve the flexibility for
parents under the scheme, and complement the flexibility measures contained in the
2022-23 March Budget measure.
The new proposal also responds to consistent calls from stakeholders to increase
the length of the scheme.
7. How will you implement and
evaluate your chosen option?
Implementation Process
Implementation of the preferred option (option 3) will require significant system
changes for Services Australia, who administers the payment. The department would
work closely with Services Australia to ensure the system changes accurately reflect
changes to the policy, including setting up a working group to identify and mitigate
risks and refine micro policy. Both departments have extensive experience in
working together to implement changes to the PPL, family assistance and social
security systems in general. As PPL can be claimed up to 97 days before the
expected date of birth or adoption of a child, system changes would need to be
implemented at least 97 days prior to the commencement date of the proposal to
ensure that claims received within this 97 day period can be assessed under the new
rules. Additionally, the preferred option would require significant changes to the PPL
legislation. These changes would be drafted by the Office of Parliamentary Counsel,
in close consultation with the department.
Subject to the passage of legislation, the new settings will come into force on 1 July
2023. The pre-claim period will commence on 26 March 2023.
Managing challenges
As set out in section 2, there are a number of challenges to realising the objectives
of the amended PPL scheme.
Cultural and societal norms
The inclusion of a 'use it or lose it' period will address public concerns raised
following the announcement of the 2022-23 March Budget measure. We do not
anticipate significant implementation concerns posed by cultural and societal norms
around child care.
Administrative complexities
The increased flexibility of the scheme may pose administrative concerns to small
businesses, who will be required to balance employee leave requests against the
needs of the business. Following the passage of legislation, Services Australia will
make resources available on their website to assist businesses and new parents
prepare for and adjust to the new PPL scheme.
33
Economic concerns
It is likely that some stakeholders will criticise the scheme for not going far enough in
terms of providing payment at a higher rate of pay.
A small regulatory burden may be placed on small businesses while navigating the
increased flexibility of the scheme. Services Australia will support businesses to
manage the new scheme (see above) to minimise any economic impact.
Communication and public awareness
A communication campaign will be developed in consultation with Office for Women
and Services Australia to help raise awareness about the proposed changes to the
scheme. The advertising component will commence 3 months before the
implementation of the scheme to ensure that parents who are expecting or who are
planning a pregnancy are aware of the changes to the scheme.
Services Australia has developed a communication strategy to meet their business
objectives and communication objectives throughout the roll out and delivery of the
new PPL scheme.
Key messages would be delivered through a range of channels. Channel selection
will be informed by research, but are likely to include:
• Stakeholder forums
• Stakeholder and intermediary communication
• Advertising
• Information products, including infographics, factsheets and targeted flyers
• Direct communication, including letters provided by Services Australia
• Web content and webinars
• Social media
• Media releases and engagement
• Editorials
• Third party endorsement.
It is proposed that a communication plan could be delivered in phases, and comprise
the following key activities:
• Phase 1 - market research, communication strategy and activity
development,
• Phase 2 - soft launch of communication activities to stakeholders,
• Phase 3 - launch advertising, public relations and stakeholder
communication activities,
• Phase 4 - intensive and direct communication to expecting parents and
employers informing them of the changes, and
• Phase 5 - wrap up communication activities and transition to business as
usual.
The impact on businesses in terms of administering the changes to the PPL scheme
will be minimal. Existing channels of communication with businesses established by
Services Australia will continue to be leveraged to assist businesses to manage any
challenges in fulfilling the employer role.
34
Evaluation Process
The new parental leave scheme will be evaluated, to assess parental take-up, how
families are using leave, fathers' involvement in care beyond the leave period, and
whether the scheme has yielded benefits in terms of family satisfaction, child
development, and women's workforce participation.
This evaluation should guide changes to the design of the scheme, such as
extending the duration and increasing the rate of pay to drive take-up - in line with
best practice internationally - if workforce participation and social and other benefits
are evident.
In particular, an evaluation of the scheme should consider whether significant gains
could be made from encouraging more fathers to take primary care time, which has
been found to facilitate a shift to more equitable co-parenting.
Purpose of the evaluative and data analytic activity
The evaluation and analysis are to support the department to demonstrate
accountability, assess performance and develop learnings applicable to PPL
scheme. Specifically, to provide insights on whether changes to the PPL scheme are
targeted appropriately, and whether the intended support and flexibility optimisation
has occurred.
The evaluation will be conducted in close consultation with relevant stakeholders,
including the Commonwealth Treasury, Office for Women, and Services Australia,
and key advocacy groups (refer to Question 5).
Evaluative Approach
The proposed evaluation approach is a mixed and multiple method approach
designed to develop findings through the use of:
• department analytical expertise,
• relevant existing academic and grey literature, and
• experiences of impacted PLP recipients.
The proposed evaluation strategy utilises a rapid sequential component based
approach to support the development of early insights from relevant literature to
target analytic activity. Analytic activity will support the targeting and design of
qualitative data collection from PPL recipients. This design is intended to maximise
the complementarity of the three sources of information.
The evaluation will include the following elements:
• Evaluation planning will include an evaluation inception meeting, the
development of a project plan (evaluation framework, instrument design, and
risk and stakeholder engagement strategy), and status reporting. Planning will
include revision points to allow for flexibility in approaches and design.
• HREC Ethics Approval will be required as the program deals with a variety
of clients across multiple sites.
35
• Consistent with government requirements for procuring entities to undertake
research and/or evaluation
• projects involving human subjects as part of the services, the Provider must:
o seek and obtain ethical clearance from a Human Research Ethics
Committee (HREC) prior to
o undertaking evaluation activities;
o not undertake the evaluation activities without that clearance; and
o adhere to the requirements for the protection of personal information
set out in the Privacy Act 1988.
• Literature Review to review the paid parental leave literature to target and
interpret analytical outputs and contextualise the wider evaluative activity.
• Data collection and analysis will include a mixed method (qualitative and
quantitative) approach to better develop insights regarding PPL payment
targeting, levels of support and optimisation of flexibility optimisation has
occurred. This includes primary data (interviews with key stakeholders
including recipients) and analysis of secondary data (administrative data, with
the inclusion of other relevant reviews).
• Evaluation reporting will include a presentation of findings and report.
Reporting will inform department learning, and support program accountability
and performance assessments to support decision making and identify future
improvements and opportunities for the department.
Justification
Support the Department of Social Services to meet its accountabilities and
obligations under the Public Governance, Performance and Accountability (PGPA)
Act 2013 and the enhanced Commonwealth Performance Framework, including
maximising learning from the measure.
Undertaking the evaluation activities detailed in this costing will maximise
department learnings from these innovative measures and provide information to
demonstrate accountability and assess payment targeting.
The proposed methodology (and associated costs) reflects recent 'lessons learnt'
from a variety of sources regarding best approaches to capitalise on internal
department capability and external Supplier independence. This methodology will
maximise the value extracted from both.
36
References
Baker, M., Milligan, K. (2008) 'Maternal employment, breastfeeding, and health:
evidence from maternity leave mandates. Journal of Health Economics. 27 (4),
pp.871-887;
Bita, Natasha (2013) Rudd Government's parental pay scheme 'unfair to high-
income earners', News.com.au, Link: Rudd Government's parental pay scheme
'unfair to high-income earners' | news.com.au -- Australia's leading news site
Chapman, B & Higgins, T (2009) An Income Contingent Loan for Extending Paid
Parental Leave, Australian Journal of Labour Economics;
Crabb, Annabel (2019) Men at Work: Australia's Parenthood Trap, Quarterly Essay,
September 2019. Link: Men at Work | Quarterly Essay
Department of Social Services (2012) Paid Parental Leave Evaluation, Phase 1
Report, University of Queensland. Link: op44.pdf (dss.gov.au)
Department of Social Services (2013) Paid Parental Leave Evaluation, Phase 2
Report, University of Queensland. Link: Project Title here (dss.gov.au)
Department of Social Services (2014) Paid Parental Leave Evaluation, Phase 3
Report, University of Queensland. Link: op44.pdf (dss.gov.au)
Department of Social Services (2014) Paid Parental Leave Final Evaluation Report,
University of Queensland. Link: op44.pdf finalphase4_report_6_march_2015_0.pdf
(dss.gov.au)
Fitzsimmons, Caitlin (2020) The infuriating rule that penalises breadwinner mums
and stay-at-home dads. Sydney Morning Herald, Link: The 'infuriating' rule that
penalises breadwinner mums and stay-at-home dads (smh.com.au)
Grattan Institute (2021) Dad Days: How more generous gender-equal parental leave
could improve the lives of Australian families. Report No. 2021-11, September 2021.
Link: Dad days: How more gender-equal parental leave could improve the lives of
Australian families (grattan.edu.au)
Grierson, Laura (2021) The inherent sexism in our paid parental leave scheme.
Woman's Agenda, 11 June 2021. Link: The inherent sexism in our paid parental
leave scheme (womensagenda.com.au)
Hewitt B, Strazdins L, Martin B. 'The benefits of paid maternity leave for mothers'
post-partum health and wellbeing: Evidence from an Australian evaluation. Soc Sci
Med. 2017 Jun; 182:97-105.
Hewitt B, Strazdins L, Martin B. (2017) 'The benefits of paid maternity leave for
mothers' post-partum health and wellbeing: Evidence from an Australian evaluation.
Soc Sci Med. 182:97-105.
Kalb, G.; Thoresen, T.O. (2010), 'A Comparison of Family Policy Designs of
Australia and Norway using Microsimulation Models', Review of Economics of the
Household, 8, 255-87;
Kalb, G. (2018), 'Parental Leave and Female Labour Supply: A Review.' Economic
Record, Vol 94. No. 304. pp. 80-100.
KPMG (2021) Enhancing Work-Life Balance: A better system of Paid Parental
Leave, April 2021. Link: Enhancing work-life balance (assets.kpmg)
McPherson, Emily (2021) 'It's bizarre': Calls for 'discriminatory' law which penalises
female earners and stay-at-home dads to be re-examined, 2 December 2021, 9
News, Link: Paid Parental Leave: Calls for 'discriminatory' law which penalises
37
female breadwinners and stay-at-home dads to be re-examined, 'It's bizarre'
(9news.com.au)
McPherson, Emily (2021) 'Like a kick in the teeth': Growing calls to change
'ridiculous' parental leave rule. 12 May 2021, 9 news. Link: Paid parental leave pay
inequality: Growing calls to change 'ridiculous' rule, 'Like a kick in the teeth'
(9news.com.au)
OECD (2016) 'Key Characteristics of Parental Leave Systems OECD'. Directorate of
Employment, Labour and Social Affairs and
The Productivity Commission (2009) 'Paid Parental Leave: Support for parents with
newborn children' (Report No. 47);
Thevenon, O. & Solaz, A. (2013) 'Labour Market Effects of Parental Leave Policies
in OECD Countries', OECD.
Thevenon, O. & Solaz, A. (2013), 'Labour Market Effects of Parental Leave Policies
in OECD Countries', OECD.
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case studies around the world'.
38
Statement[s] of compatibility with human rights
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011
PAID PARENTAL LEAVE (IMPROVEMENTS FOR FAMILIES AND GENDER
EQUALITY) BILL 2022
The Paid Parental Leave Amendment (Improvement for Families and Gender
Equality) Bill 2022 (the Bill) 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 Bill
The paid parental leave scheme provides Government-funded financial support to
assist parents to take time off work after a birth or adoption. The scheme consists of
parental leave pay, an 18-week payment paid at a rate based on the national minimum
wage, for eligible primary carers of newborn and recently adopted children; and dad
and partner pay, a two-week payment paid at a rate based on the national minimum
wage for eligible fathers and partners caring for newborn or recently adopted children.
The Bill amends the Paid Parental Leave Act 2010 (Paid Parental Leave Act) to make
parental leave pay more accessible, flexible and gender-neutral.
The Bill combines dad and partner pay with parental leave pay to increase parental
leave pay to 20 weeks. Two weeks of parental leave pay will be reserved for each
parent, to encourage more fathers and partners to access the payment. Single parents
will have access to the entire entitlement.
The Bill will remove the notion of 'primary' and 'secondary' claimants and the
requirement that the primary claimants of parental leave pay must be the birth parent,
allowing families to decide who will claim first and how they will share the entitlement.
birth parent
Eligibility will be expanded to allow otherwise eligible fathers and partners to receive
Parental Leave Pay when the birth parent does not meet the income test, residency
test or is serving a newly arrived residents waiting period. Additionally, the Bill will
expand eligibility through the introduction of a $350,000 family income, under which
families can be assessed if they do not meet the individual income test. This will allow
more families in which the birth parent is the primary income earner to access
payment under the paid parental leave scheme.
The Bill will also allow claimants to receive a portion of their parental leave pay
entitlement at the same time, and increase the flexibility of the payment so that it can
be taken in blocks as small as a day at a time, within two years of the child's birth or
adoption. This contrasts the current settings which require the first 12 weeks of the
1
Statement[s] of compatibility with human rights
payment to be taken in a continuous period without any return to work (at risk of
forfeiting the remainder of the 12 weeks).
Human Rights Implications
This legislative instrument engages the following rights:
• the right to social security,
• the right to protection and assistance for families,
• the right to maternity leave, and
• the right to equal treatment.
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, and Article 26 of the
Convention on the Rights of Children recognises the right of every child to benefit from
social security. This Bill engages these rights by broadening the eligibility criteria for
Parental Leave Pay and increasing the number of people who can receive the
payment.
The right to protection and assistance for families
In relation to the right to protection and assistance for families, Article 10(2) of the
ICESCR recognises that special protection should be accorded to mothers during a
reasonable period before and after childbirth. During such period working mothers
should be accorded paid leave or leave with adequate social security benefits.
This Bill engages this right by broadening the eligibility criteria for parental leave pay
to allow more women to access the scheme and be supported to take time off work
after the birth of a child. Additionally, a father or partner will not be able to access
payment under the scheme without permission from the birth parent. This will
prevent the payment being used without the mother's knowledge and ensure
mothers can access as much of the entitlement as they choose.
The UN Committee on Economic, Social and Cultural Rights has commented that
Article 7 of the ICESCR, regarding the right of everyone to the enjoyment of just and
favourable conditions of work, 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'.
Changes to make the claim process more gender neutral will make it easier for
fathers to access payment under the paid parental leave scheme, and changes to
increase the flexibility will make it easier for the entitlement to be shared between
parents and support parents to better balance work and care responsibilities
following a birth or adoption, according to their own needs.
The right to maternity leave
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
2
Statement[s] of compatibility with human rights
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'.
The Bill will not reduce the amount of payment birth parents can receive under the
paid parental leave scheme. Birth parents who are partnered will be able to receive
up to 18 weeks of payment, consistent with the current parental leave pay
entitlement. Birth parents who are not partnered will be able to receive up to 20
weeks of payment. In addition, more women will be able to access payment under
the paid parental leave scheme with the introduction of the family income test.
Although changes to the claim provisions will allow fathers and partners to claim first,
the maternal health and development objectives of the scheme will be supported by
requiring birth parents to give permission for this.
The right to equal treatment
Article 3 of the ICESCR recognises ensuring the equal right of men and women to
the enjoyment of all economic, social and cultural rights.
This Bill engages these rights by introducing changes to the paid parental leave
scheme to better support both men and women to access payment under the
scheme, including gender neutral claiming, which will allow either parent to claim
first. This will allow families to make decisions on which parent works and/or cares
for the child, regardless of gender. In addition, more men will be able to access
payment under the scheme as they will no longer be ineligible when the birth parent
does not meet the income or residency test requirements or is serving a newly
arrived residents waiting period.
Conclusion
The Bill is compatible with human rights because it does not limit but, rather,
enhances access to maternity leave, social security and assistance for families.
[Circulated by the authority of the Minister for Social Services,
the Hon Amanda Rishworth MP]
3