Paid Parental Leave

How Paid Parental Leave Works

With the New Year fast approaching, so are several new initiatives from the Federal Government. One that we here at Small Business Works are receiving a lot of enquires about in the new Paid Parental Leave Scheme scheduled to take effect from the 1st January 2011.

Firstly, congratulations to all those expecting mums out there who about to embark on the journey of motherhood. We would also like to give their employers some good news today as well, and clear up any confusion floating around over how the scheme operates.

Foremost to answer the main question we’ve been hearing over the last few weeks, No employers are not responsible for having to pay for Parental Leave from their own funds.

Let’s now take this opportunity to explain what the scheme is and how Paid Parental Leave Works:

Essentially, the new Paid Parental Leave Scheme entitles mothers, primary care givers and adopted parents who have been in paid employment for at least 12 months before the expected date of birth or adoption up to 18 weeks Parental Pay Leave.

In a nutshell how the system works is that Parents will be responsible for claiming ‘Paid Parental Leave’ and must do so with the Family Assistance Office up to 3 months before the expected date of birth or adoption.

The Family Assistance Office will then provide employers with the full 18 week Government Funded Parental Leave (at a maximum of $570/wk) to be distributed to the parent during the regular pay cycle, with Pay As You Go (PAYG) tax withheld.

Any changes in the employment status, payment cycle or business operations must be reported to the Family Assistance Office. For more information on how the New Paid Parental Leave Scheme may affect your business, make an appointment with one of our Accountants or call the office on 1800 556 122.