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Changes to paid parental leave scheme

On 11 June 2020 the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 passed both houses of Federal Parliament.

The Bill received Royal Assent on 16 June 2020, and its changes will take effect from 1 July 2020.

What is changing?

Designed to improve women’s workforce participation, the Bill changes the paid parental leave (PPL) period from a single fixed 18-week period to a fixed 12-week period and a flexible 6-week (30 day) period.

The fixed 12-week period will, as under the current scheme, be required to be taken from the commencement of the parental leave period.

However, should the employee wish, the 6-week (30 day) flexible period can be taken at any point, and in any number of periods, within 24 months after the commencement of the parental leave period.

What this means in practice?

Eligible parents can still choose to take 18 consecutive weeks of PPL by opting to take the 30-day flexible PPL period straight after the 12-week period of PPL.

However, should they wish, parents can use the flexible PPL component to preserve their income during a return to work process. For example, a parent returning to work on a part-time basis, three days a week, can elect to be paid PPL for the two days each week that they are not working, up to a maximum of 30 days.

Other alternatives include the employee electing to be paid the flexible PPL component in discrete “chunks” during a period of what would otherwise be unpaid leave, up to a maximum of 30 days.

What changes for employers?

Fortunately, Parliament has been conscious not to increase the administrative burden upon employers. For the initial 12-week period of PPL the scheme will continue to operate in its current fashion where the government makes payment to the employer who in turn passes the PPL payment onto the employee.

For the new flexible 30-day PPL period the employee will receive payment from the government directly, thereby absolving the employer of any further administrative responsibility.

Such changes will hopefully assist business to retain workers who would otherwise resign due to parental responsibilities.

For any questions regarding employee entitlements be sure to contact our workplace relations advisors on 1800 572 679.