Changes to the Parental Leave Pay Scheme from 1 July 2020

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6 Jul, 2020

The Paid Parental Leave scheme gives government financial support through Centrelink to eligible parents to assist them in caring for their newborn or recently adopted child.

Payments are made to the employer by Centrelink, who then pays the employee.

Parental Leave Pay is for the child’s eligible primary carer.

Centrelink is the organization that determines if a person is eligible for the Paid Parental Leave scheme and not the employer.

If Centrelink decides the employee is eligible, they will transfer the payment to the employer so they can then pay the employee on their regular pay cycle.

Until now, employees could only access Paid Parental Leave as a continuous 18-week block (or 90 payable days).

From 1 July 2020, eligible employees will be able to split their Parental Leave Pay so they can take it over two periods within two years.

The first block is a fixed period of 12 weeks (60 payable days) and needs to be used within 12 months of the birth or adoption of a child.

The second period is a flexible period:

  • Of up to 30 days
  • Usually starts after the first period has ended
  • Can be used in flexible periods negotiated between the employer and the employee
  • Has to be used within 24 months a child’s birth or adoption.

Separating the period into a fixed and a flexible period is designed to help employers and employees with workplace flexibility strategies such as a graduated return to work to assist the employee in managing their family responsibilities.

One thing to note: Parents can’t receive income from both the JobKeeper Payment and Parental Leave Pay at the same time. They can receive Parental Leave Pay after the income they receive from JobKeeper ends.

A reminder also that the Paid Parental Leave scheme is in addition to any other parental leave provisions that the employer may pay under their award or individual agreement or contract with the employee.

For more information, go to Services Australia – Parental Leave Pay

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