Paid Parental Leave
The purpose of this document is to provide an introduction to Paid Parental Leave (PPL), giving a general overview of when PPL applies, when it can be taken, what evidence must be provided by an employee and what must be paid to an employee.
PPL applies to the primary caregiver and in some cases may apply to the non-primary caregiver of a child. However, this fact sheet will only discuss PPL applicable to the primary caregiver.
This information is for Businesses in South Australia and the Northern Territory and the information provided is in relation to the Paid Parental Leave Act 2010 (Cth) (the Act). For information about relevant other States or Territories please call the relevant MTA branch.
Please note that PPL does not interact with or affect an employee’s entitlement to unpaid parental leave under the Fair Work Act 2009 (Cth).
This fact sheet is intended for the purpose of providing information only and is not to be considered advice.
Entitlement to Paid Parental Leave for Primary Caregivers (Maternity Leave)
Pursuant to the Act, an employee will be entitled to PPL as a primary caregiver where a determination is made that PPL is payable to the employee.
It is the obligation of the employee to make an application for PPL to Centrelink – no determination will be made without an application.
For an employee’s application for PPL to be successful, they will need to:
- satisfy the work test – the employee needs to have worked for 10 of the 13 months before the birth or adoption of your child and a minimum of 330 hours, around one day a week, in that 10 month period;
- satisfy the income test – the employee earns less than $156,647.00 per year;
- satisfy the Australian residency test – the employee is an Australian resident;
- register the birth of the child;
- be the primary carer of the child; and,
- be absent from work for the purpose of caring for the child.
Where an employee satisfies the above criteria, it is likely that their application for PPL will be approved. Please note that PPL usually starts after the child’s birth or date of adoption.
Entitlement to Dad and Partner Pay (Paternity Leave)
An employee who is the father of a new or adopted child or the partner of a new mother is entitled to apply for Dad and Partner Pay (DAPP) for a period after the child’s birth or adoption.
To be entitled to DAPP, an employee must make an application to Centrelink. For an employee’s application for DAPP to be successful, they will need to:
- satisfy the work test – the employee needs to have worked for 10 of the 13 months before the birth or adoption of your child and a minimum of 330 hours, around one day a week, in that 10 month period;
- satisfy the income test – the employee earns less than $156,647.00 per year;
- satisfy the Australian residency test – the employee is an Australian resident;
- register the birth of the child; and,
- be absent from work without pay for the purposes of caring for the child.
An employee may be entitled to a maximum of 2 weeks’ DAPP. This is paid at the Federal Minimum Wage by Centrelink to the employee. Where an employee is receiving DAPP payments, they are not entitled to any pay from their employer.
Payment for Paid Parental Leave
An employee who has successfully made an application for PPL is entitled to be paid at the Federal Minimum Wage for 18 weeks from the determination taking effect. Once an employee has become entitled to PPL, Centrelink will contact their employer to arrange for payments to be made.
As the employer of a person entitled to PPL, Centrelink will provide you funds for the payment of PPL to your employee. You must:
- ensure your employee is paid their PPL as part of your usual pay cycle;
- pay the employee the full amount of the instalment provided by Centrelink less normal PAYG tax; and,
- keep records of all payments received from Centrelink and made to your employee.
If the employee returns to work while being paid PPL, you must inform Centrelink to ensure that the PPL payments stop.
If at the time of the employee returning to work, there are any unpaid funds from Centrelink relating to future payments for PPL, you must return these funds to Centrelink as soon as possible.
Please note: changes to this scheme are being implemented from 1 July 2023, whereby the entitlement to paid leave will increase from 18 weeks to 20 weeks and then increase by 2 weeks every financial year thereafter until 2026. Parental Leave Pay and Dad and Partner Pay will be combined into 1 payment. A combined family income limit of $350,000 will be introduced but the individual income limit will not change. Parents can use Parental Leave Pay until the child turns 2.
