Published 17 May 2015
As part of the 2015 budget, the Abbott government has announced that employees will not be able to “double dip” by receiving parental leave pay from both their employer and the government.
Under the paid parental leave scheme currently, parents who are the primary carer of a newborn or recently adopted child and earn less than $150,000 are entitled to 18 weeks’ pay at the national minimum wage, a total of $11,538.90. The primary carer is also entitled to receive pay from their employer for parental leave if there is such a policy in place in their workplace, without jeopardising the entitlements received from the government.
However, under the proposed new scheme, employees will not be able to access the government paid parental leave if they receive more than $11,538.90 from their employer. For employees who receive less than $11,538.90 from their employer, they will only be able to claim the difference from the government.
Treasurer Joe Jockey said:
“People can claim parental leave payments from both the government and their employers so they are effectively double dipping. We’re going to stop that. You can’t double dip, you can’t get both parental leave pay from your employer and from taxpayers.”
It is estimated that 27% of parents, about 45,000 per year will only be able to access a partial government payment as they receive some employer entitlements. 20% of parents, approximately 34,000, will lose the government parental leave pay entirely as their workplace scheme is more generous than the government pay. It is estimated that 50% of parents will be unaffected by the proposed changes.
Kate Carnell from the Australia Chamber of commerce stated:
“It’s hard to see why employers would keep paying parental leave if it meant the government stopped paying… the reason employers are paying additional leave entitlements is to give employees additional reason to work for them.”
The changes will be implemented on 1 July 2015 if they pass the Senate.
The content of this publication is general in nature and provides a summary of the issues covered. It is not intended to be, nor should it be relied upon, as legal or professional advice for specific employment situations. PCC Employment Lawyers recommend that specialist legal advice should be sought about specific legal issues.