Changes to Paid Parental Leave Scheme

As of 1 July 2020, updates were made to the government’s Paid Parental Leave scheme, which includes a new approach to when and how the leave can be taken.

It is hoped these changes will provide new parents with flexibility around how and when they return to work, ease the burden of home duties and allow the primary carer the opportunity to return to work sooner, if they wish.

How has the Paid Parental Leave Scheme been updated?

Previously, when eligible employees wanted to take Paid Parental Leave they were required to do so in one 18-week block, which was paid at minimum wage. Going forward, eligible employees will still be entitled to take 18 weeks of Paid Parental Leave, however, they will be able to make a decision around the use of the time. Eligible employees can now split their Parental Leave Pay so they take it over 2 periods within 2 years.

Employees can claim parental leave pay for 1 set period and 1 flexible period.

The first period is a set period of 12 weeks. This set must be taken in one consecutive block, and it must also be taken within the 12 months after the birth or adoption.

The remaining 30 days (or 6 full-time working weeks) is considered to be the flexible period. The second set of 30 days does not need to be used consecutively, however, it must be used within two years of the birth or adoption. It is up to the employee and their employer to reach an agreement on how those 30 days of leave are utilised. They may be used in a number of ways.

For example, if an employee has taken 12 weeks of Paid Parental Leave and wishes to return to work while still accessing the remaining 30 days of leave, they are able to make an arrangement with their employer to take one or two days of Paid Parental Leave over an extended period of 15 or 30 weeks to capture the full amount of leave they are entitled to.

Usually, the second set of leave will only commence after the first period has ended (i.e. you cannot take thirty days of leave and bank the first set of 12 weeks for a later date).

The changes to how and when employees get Parental Leave Pay will come into effect on 14 September 2020.

Employees may still also opt to simply take the 18 weeks of Paid Parental Leave in one consecutive block.

What do the changes to the Paid Parental Leave Scheme mean for families?

With new and increased flexibility for eligible employees to choose how they use their Paid Parental Leave, parents can now space out their leave entitlements to ensure one parent is home while the other is at work, introduce another carer (such as a grandparent or nanny) into their schedule or simply decide to take a second block of leave together as a family later down the track.

The updates to the Paid Parental Leave Scheme also offer the primary carer the option of returning to work earlier than they may have on the previous scheme, while still enabling them to take further leave once they have settled back into work.

Have there been any changes to the way the leave is paid?

No. Paid Parental Leave is still paid by the government to the employer, who will need to apply for it. The payments are then passed on to the employee.

For more information about your entitlements to Paid Parental Leave or how it is paid, speak to one of our HR Consultants in Cairns or visit the Services Australia website.