Paid Parental Leave Scheme – important changes as and from 1 July 2011
MST has previously advised on the federal government funded Paid Parental Leave Scheme (‘PPLS’) that commenced operation on 1 January 2011.
For the uninitiated, the PPLS entitles eligible employees to receive up to 18 weeks of government funded paid parental leave based on the national minimum wage.
The PPLS is means tested. Eligibility under the PPLS is further subject to a number of criteria, details of which we have previously advised by MST, most recently in our article of 17 February 2011.
Importantly, as and from 1 July 2011:
- The Family Assistance Office (‘FAO’) will advance benefits under the PPLS directly to an employee; however an employer may opt to pay those benefits directly to an employee. An employer is not obliged to make any benefit payment unless the FAO has first paid the benefit to the employer.
- The employer should provide PPLS benefits to an employee in the same way it provides salary or wages. PAYG must be made with respect to all benefits paid.
- The employer must give the employee written notification each time a benefit under the PPLS is made to an employee.
- An employer is not being required to make superannuation contributions on PPLS benefits, nor will it increase an employer’s payroll tax liability or workers compensation premium liability.
As previously advised, it is critical that employers:
- review their existing employment agreement templates and policies and procedures to ensure .they are consistent with the new PPLS requirements
- update their payroll systems to reflect PPLS benefits paid
Author: Herbert Fischbacher