The new Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 (the Bill) was passed through the House of Representatives on 9 February 2023.
Pending passage through the Senate, the Bill will need to be passed by March 2023, so parents expecting to give birth or adopt, on or after 1 July 2023, have the option to pre-claim to receive their government entitlement as soon as they are eligible.
These changes to the Bill aim to improve gender equality by supporting women’s workforce participation and addresses the common assumption that the primary carer, usually the mother, is the lower income earner in a relationship.
THE MAIN CHANGES
- From 1 July 2023, the Parental Leave Pay (18 weeks) and Dad Partner Pay (2 weeks) schemes are combined to create a single parental leave payment (PLP) available for 20 weeks. This is paid at the current minimum wage.
- Couple parents cannot claim more than 18 weeks PLP each.
- Single parents will be eligible to claim the full 20 weeks.
- There is flexibility for both parents to access two weeks of PLP concurrently.
- The Bill removes the three categories of primary, secondary and tertiary claimant, and the requirement that the primary claimant must be the birth parent.
- There is now flexibility for fathers and partners to claim PLP in their own right.
- The income limit has increased to $350,000 for the family assessment if the parents do not meet the individual income test. This will be indexed from 2024.
Who is eligible?
Income test
The PLP income test is now a family income test with an increased limit to $350,000. Families can be assessed if they do not meet the individual income test.
One effect of the changes in the Bill, is that a single parent who fails the individual income test shall be assessed against the new family income limit.
The changes to Division 4 of part 2-3 PPL introduce new income testing arrangements, under the new proposed section 37, with parents being eligible:
- If the person’s income is not more than the individual PPL income limited proposed subsection 37 (1);
- If the person does not have a partner and their income is not more than the family PPL income limit proposed subsection 37 (2); or
- If the person has a partner and the total of the persons’ income and the partner’s income is not more than the family PPL income limit proposed subsection 37 (3).
Gender neutral claims
This amendment allows fathers and partners to claim a payment without the birth parent having to make a successful claim first.
Fathers and partners will be eligible to make a claim for PLP in their own right.
Work and residency tests continue
PLP claimants must satisfy a work test and residency test.
Work test
A claimant must have performed 330 hours of qualifying work over a period of at least 295 days (approximately 10 months) within their work test period. The work test period is a 395-day period (approximately 13 months) prior to the expected or actual date of birth or place of child for adoption.
Residency test
A claimant must be living in Australia when their child is born or adopted, and they must have Australian Citizenship, a permanent visa, or certain visa categories.
There will be a newly arrived waiting period for migrants who may have to wait two years before they are eligible for PLP.
Further legislation will be introduced to progressively increase the PLP scheme by two weeks from July 2024 to 26 weeks by 2026.
If you have any questions, give us a call on 02 9021 9699.
This summary is a guide only and is not legal advice.