THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES FAIRER PAID PARENTAL LEAVE BILL 2016 EXPLANATORY MEMORANDUM

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1 2016 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES FAIRER PAID PARENTAL LEAVE BILL 2016 EXPLANATORY MEMORANDUM (Circulated by the authority of the Minister for Social Services, the Hon Christian Porter MP) 1

2 FAIRER PAID PARENTAL LEAVE BILL 2016 OUTLINE This Bill introduces the revised arrangements for the Paid Parental Leave scheme announced in the Mid-Year Economic and Fiscal Outlook which replaces the Fairer Paid Parental Leave Bill 2015, announced in the 2015 Budget. The Bill also, includes a measure previously introduced in a 2014 Bill. Fairer paid parental leave The 2015 Budget measure was previously introduced on 25 June 2015 in the Fairer Paid Parental Leave Bill The revised package introduced by this new Bill responds to community concerns and addresses feedback provided by relevant stakeholders. In the revised package, government-funded parental leave pay will be targeted at individuals who have no employer-provided paid primary carer leave, or whose employer-provided paid primary carer leave is for a period less than 18 weeks or is paid at a rate below the full-time National Minimum Wage. Under the new measure, parents access to government-funded parental leave pay will be limited according to the number of weeks of employer-provided paid primary carer leave they receive, if any. This means that, where a person is entitled to employer-provided leave of less than 18 weeks, the government scheme will provide the residual number of weeks of government-funded parental leave pay up to the maximum period of 18 weeks. Parental leave pay will continue to be provided to parents who receive employer-provided paid primary carer leave at a rate lower than the National Minimum Wage. In these circumstances, the person s employer-provided paid primary carer leave will be topped up to the National Minimum Wage for a period of up to 18 weeks. Minor amendments to the Paid Parental Leave scheme are made, including providing more flexible backdating provisions so that the four-week backdating rule will apply to parents who complete their claim process more than four weeks after the birth of their child. In addition, the paid parental leave work test will be amended to take into account the circumstances of pregnant employees who are unable to continue in their job because the hazardous nature of their employment presents a risk to their pregnancy and there is no safe job alternative available. The permissible break in the paid parental leave work test will also be extended to allow parents to have a gap of up to 12 weeks between two working days and still meet the paid parental leave work test. This change will enable more working parents, particularly those in irregular employment, to be eligible for paid parental leave. 2

3 The new measure will be implemented from the first 1 January, 1 April, 1 July or 1 October after the Bill receives Royal Assent. Removal of employer paymaster role in administering the Paid Parental Leave scheme As with the original Bill, this new Bill includes the measure to remove the requirement for employers to administer Government-funded parental leave pay to their eligible long-term employees. This measure was previously introduced on 19 March 2014 in the Paid Parental Leave Amendment Bill 2014, to ease administrative burdens on business. Employees will be paid directly by the Department of Human Services, unless an employer opts in to provide parental leave pay to its employees and an employee agrees to their employer paying them. The measure will be implemented from the first 1 January, 1 April, 1 July or 1 October after the Bill receives Royal Assent. Financial Impact Statement The financial impact over the forward estimates of the revised measures in this Bill is an indicative saving of $1,179.9 million based on a 1 January 2017 commencement date. REGULATION IMPACT STATEMENT The regulation impact statement for the removal of the employer paymaster role was published by the Office of Best Practice Regulation on 9 January STATEMENTS OF COMPATIBILITY WITH HUMAN RIGHTS The statements of compatibility with human rights appear at the end of this explanatory memorandum. 3

4 FAIRER PAID PARENTAL LEAVE BILL 2016 NOTES ON CLAUSES Abbreviations used in this explanatory memorandum Paid Parental Leave Act means the Paid Parental Leave Act 2010 PPL scheme means the Paid Parental Leave scheme Clause 1 sets out how the new Act is to be cited that is, as the Fairer Paid Parental Leave Act Clause 2 provides a table setting out the commencement dates of the various provisions of the new Act. Clause 3 provides that legislation specified in a Schedule is amended or repealed as set out in that Schedule. 1

5 Schedule 1 Adjustment for primary carer pay and other amendments Summary This Schedule ensures that Government-provided parental leave pay is more fairly targeted to ensure eligible working parents have access to a base level of financial support on the birth or adoption of their child. Parents will no longer receive both employer-provided paid primary carer leave (such as maternity leave pay) and the full amount of parental leave pay under the Government-provided PPL scheme. Parents who are entitled to receive employer-provided paid primary carer leave totalling at least 18 weeks at the National Minimum Wage will not receive any parental leave pay under the PPL scheme. Parents who are entitled to receive employer-provided paid primary carer leave totalling less than 18 weeks, will continue to receive some parental leave pay under the PPL scheme, but the amount will be reduced by length of the employer-provided paid primary carer leave they receive. However, where parents employer-provided paid primary carer leave payments (other than lump sum payments) are paid at a rate below National Minimum Wage, a Government-provided parental leave pay supplement will be paid valued at the difference between their primary carer pay and the rate of the National Minimum Wage. These changes will commence from the first 1 January, 1 April, 1 July or 1 October after the Bill receives Royal Assent. Background Currently under the Paid Parental Leave Act, the PPL scheme provides working parents and adoptive parents, with access to up to 18 weeks parental leave pay at the National Minimum Wage, while they stay at home to look after their baby or adopted child. Payments under the current PPL scheme are made irrespective of whether an individual receives employer-provided paid primary carer leave and regardless of the amount of such payments. Parental leave pay, under the PPL scheme, is paid over an 18-week period at the National Minimum Wage. Parents who lodge a claim before the birth of a child, or a child entering their care, currently receive an initial eligibility determination stating whether they will be eligible for parental leave pay. Under these amendments, a person must inform the Secretary (or delegate) of any primary carer pay they are entitled to from their employer. The PPL period of a person is then proportionately reduced by the length of the paid primary carer leave period they are entitled to from their employer. If a person receives 18 weeks or more paid primary carer leave that is valued at equal to or more than the National Minimum Wage, the person will not be entitled to receive 2

6 parental leave pay from the Government. If the person s paid primary carer leave is paid at a rate less than the National Minimum Wage, the person will be entitled to a lump sum supplement of paid parental leave representing the difference between their paid leave (up to 18 weeks) and the National Minimum Wage for that period. The purpose of these changes is to provide fairer parental leave pay by creating a base level of paid parental leave entitlement for all eligible working parents. Primary claimants will no longer be able to access parental leave pay at the same time as they are taking employer-provided paid primary carer leave. This change is consistent with the above change, to better target the Paid Parental Leave scheme and ensure working parents have access to at least 18 weeks of paid time off work to care for their child. Provision is made for a primary claimant to nominate a start day 28 days before the day they make their claim for parental leave pay or verify their child s birth, to provide greater flexibility for parents to make their claim after the birth of their child but without delaying their receipt of parental leave pay. This Schedule will commence on the first 1 January, 1 April, 1 July or 1 October after the Bill receives Royal Assent. Part 1 Amendments Explanation of the changes Amendments to the Paid Parental Leave Act Items 1 and 2 amend section 4, which sets out the Guide to the Act. The second and third paragraphs under the heading Overview are omitted and replaced with three new paragraphs to state that parental leave pay is paid to a person for a particular period, or as a lump sum supplement. Where parental leave pay is for a period, that period is called the PPL period. The full PPL period is 18 weeks. However, a person may not be eligible for the full 18 weeks if they are not eligible for the entire period or they receive primary carer pay from their employer. Parental leave pay may be paid as a lump sum supplement because the person received employer-provided primary carer pay for up to 18 weeks at less than the National Minimum Wage. Parental leave pay is paid in instalments, at the National Minimum Wage for each week during a person s PPL period or, in the case of a lump sum supplement, one instalment. Payment can be made either by the Secretary or the person s employer. The last paragraph under the heading Chapter 2 When parental leave pay is payable to a person is omitted and replaced with a paragraph stating that there are three types of claims: a primary claim, a secondary claim and a tertiary claim. The claims relate to one another. However, a secondary and tertiary claim cannot be made without a primary claim. Often, only a primary claim is made. 3

7 Item 3 amends section 6 by inserting a signpost to the definition of adjustment for paid PC leave at section 11J inserted by item 17 below. Item 4 amends section 6 by repealing the definition of initial eligibility determination and replacing it with a signpost to the definition of initial eligibility determination at section 115BL, which relates to dad and partner pay. Item 5 amends section 6 to amend the definition of maximum PPL period end day. This is a technical amendment to signpost the definition of maximum PPL period end day at section 11B, inserted by item 17 below. Item 6 amends section 6 to amend the definition of maximum PPL period start day. This is a technical amendment to signpost the definition of maximum PPL period start day at section 11A, inserted by item 17 below. Item 7 amends section 6 to include a signpost to the definitions of maximum supplement period and supplement period at section 11H, inserted by item 17 below, paid PC leave, paid PC leave period, PC pay, and primary carer pay at section 11F, inserted by item 17 below, paid PC leave reduction number at section 11D, inserted by item 17 below, PC leave and primary carer leave at section 11E, inserted by item 17 below, provisional entitlement determination at section 26 and parental leave pay supplement at section 11G, inserted by item 17 below. Item 8 amends section 7, which is the Guide to Part 2-1 of the Act, to specify that parental leave pay can be paid under the Act as a lump sum supplement as well as for a particular period. It also specifies that a person s PPL period may be for a lesser period than 18 weeks, not only in cases where the person is not eligible for the full 18-week period, but also in cases where the person is entitled to primary carer pay in respect of the child. Items 9, 10, 11, 12 and 13 are minor amendments to sections 8, 9 and 10 to delete the following phrases: for a period at sections 9 and 10, or that period at section 8 and during the period at section 9. These amendments reflect the fact parental leave pay may not necessarily be payable for a period if it is paid as a lump sum supplement. Items 14 and 15 are minor amendments to subsections 11(1) and (3) respectively to include the respective headings PPL period and Maximum PPL period. Item 16 repeals subsections 11(4) and 11(5) because new sections 11A and 11B, inserted by item 17 below, will give the meanings of maximum PPL period start day and maximum PPL period end day. Item 17 inserts new sections 11A, 11B, 11C, 11D, 11E, 11F, 11G, 11H and 11J. 4

8 New section 11A The maximum PPL period start day for a child New section 11A defines the maximum PPL period start day for a child. Subsection 11A(1) provides that the maximum PPL start day for a child is the latest of: the day the child was born; the nominated start date; where a primary claimant has a paid primary carer leave period and the nominated start date is during that period, the first day after the end of that period; 28 days before the primary claimant made an effective claim for parental leave pay for the child; or 28 days before the day on which the primary claimant verified the child s birth. This new definition has the effect of allowing a claimant to backdate their PPL period start day by 28 days before the date of an effective claim or verification of the child s birth and prevents a primary claimant s PPL period commencing during a period of paid primary carer leave for the child. The more generous backdating provisions will provide more parents with the flexibility to backdate their claim to a date before they lodged their claim. Currently, a person can only backdate a claim if they fulfil all claim requirements within 28 days of birth. If a person lodged a claim after this time, currently they cannot backdate their claim, and, if the person has already returned to work, they will be ineligible for parental leave pay, despite potentially having had a period off work after the birth. The new provision addresses this issue. Subsections 11A(2) and (3) provide that the Secretary can make a determination, specifying an earlier start day if satisfied that there are exceptional circumstances for doing so, but cannot specify a day before the child s date of birth. New section 11B The maximum PPL period end day for a child New section 11B gives the meaning of maximum PPL period end day. Subsection 11B(1) defines the maximum PPL period end day as the earlier of the day that is 125 days after the maximum PPL period start day (which is 18 weeks from and including that start day), or the day before the child s first birthday. Subsection 11B(2) provides that, where the primary claimant has a paid primary carer leave reduction number, the maximum PPL period end day is in accordance with paragraph 11B(2)(a) the earlier day resulting from the reduction in the number of PC leave days in section 11D, that is the adjustment for paid PC leave worked out in accordance with section 11J. This provision has the effect of substituting an earlier maximum PPL period end day, calculated with reference to the number of week days in the paid PC leave period the person is entitled to. The number of weekdays in the person s paid PC leave period (worked out under section 11D) is subtracted from the maximum PPL period. Example: Jo is entitled to eight weeks of paid primary carer leave at $1,000 per week. Jo s baby is born on 11 July

9 Jo started her paid primary carer leave on 27 June 2017, and ends her paid primary carer leave on 21 August Jo s paid PC reduction number is 40 week days (calculated in accordance with section 11D). Jo s maximum PPL period start day is her nominated start date of 22 August Jo s maximum PPL period end day is the 126th calendar day of the PPL period (this is the number of calendar days in an 18 week period), reduced by 40 week days (determined in accordance with section 11J), which is the 50th week day in the PPL period which is 28 October If the person s maximum PPL period start day is before the first day of a person s paid primary carer leave, paragraph 11B(2)(b) applies. This provision provides that the maximum PPL period end day is the earlier of the day before the first day of the paid primary carer leave period or the day determined by paragraph 11B(2)(a). This provision has the effect that, where a person elects to commence their PPL period prior to taking their employer-provided paid primary carer leave, their PPL period will end prior to the commencement of their paid primary carer leave. This provision and new section 11A, inserted by item 17, have the effect that a primary claimant cannot receive Government-funded parental leave pay and employer provided primary carer pay at the same time. Example: Emma is entitled to six weeks of paid primary carer leave at $1,000 per week. Emma s baby is born on 4 July Emma plans to start her paid primary carer leave on 1 August 2017, and end her paid primary carer leave on 11 September Emma s maximum PPL period start day is her nominated start date of 4 July 2017, before she starts her paid primary carer leave. Emma s maximum PPL period end day is the day before the first day of the paid primary carer leave period, which is 31 July Subsection 11B(3) provides that the Secretary has a discretion to make a determination under subsection 11B(4) that a different day is the person s maximum PPL period end day in respect of claim made by a secondary claimant. Subsection 11B(4) provides that the day determined by the Secretary must be later than a day determined under paragraph 11B(2)(b), and not later than a day worked out under paragraph 11B(2)(a). The effect of this is that the Secretary can determine that a secondary claimant will have a later maximum PPL period end day where their maximum PPL period is shortened by a period of paid primary carer pay of the primary claimant. However, the determination of a later day cannot result in the secondary claimant having a maximum PPL period of more than 125 days (18 weeks) minus any adjustment calculated in accordance with new section 11J. 6

10 New section 11C No PPL period etc. if excessive paid PC leave reduction number Section 11C provides that, where the primary claimant has a paid PC leave reduction number that is equal to or exceeds the number of week days in the maximum PPL period, there is no PPL period. New section 11D Paid PC leave reduction number for a child Subsection 11D(1) provides that a primary claimant will have a paid PC leave reduction number if they have a paid primary carer leave period. Subsection 11D(2) calculates the paid PC leave reduction number. First, the number of days in the paid PC leave period is divided by seven. Then, if the result is not a whole number and is greater than one, round it down to the nearest whole number. If the result is not a whole number and is between one and zero, round it up to one. Next, multiply the result by five. The purpose of the new section 11D is determine the number of week days in the person s PC leave period, to the nearest week, by which their maximum PPL period will be reduced. Example: Jo is entitled to eight weeks of paid primary carer leave. Jo started her paid primary carer leave on 27 June 2017, and ends her paid primary carer leave on 21 August The number of calendar days in this period is 56. Fifty-six divided by seven equals eight (paragraph 11D(2)(a)). Eight multiplied by five equals 40 (paragraph 11D(2)(c)). Jo s paid PC leave reduction number is 40 weekdays. Example: Angela is entitled to four days of paid primary carer leave. Four divided by seven equals 0.57 (paragraph 11D(2)(a)). As 0.57 is not a whole number and is between one and zero, it is rounded up to one (subparagraph 11D(2)(b)(ii)). One multiplied by five equals five (paragraph 11D(2)(c)). Angela s paid PC leave reduction is five weekdays. Example: Leesa is entitled to 26 days (3.7 weeks) of paid primary carer leave. Twenty-six divided by seven equals

11 As 3.7 is not a whole number and is greater than one, it is rounded down to three (subparagraph 11D(2)(b)(i)). Three multiplied by five equals 15. Leesa s paid PC reduction is 15 weekdays. New section 11E Primary carer leave (or PC leave) Subsection 11E(1) defines primary carer leave (or PC leave) as leave an employee is entitled to take under the terms and conditions of their employment: because the employee is expecting to give birth to a child; or to allow the employee to be the primary carer for a child who has not turned one; or to allow the employee to be the primary carer for a child who has been entrusted to the care of the employee within the last 12 months as part of a process for the adoption of the child; or to allow the employee to care for an adopted child; or where the employee would have been entitled to such leave but for the fact the child is stillborn or died. This is intended to include any enforceable entitlement that is part of the employee s terms or conditions of employment, including entitlements that arise in an enterprise agreement, modern award or workplace policy (incorporated by reference or impliedly in a contract of employment), entitlements that are implied by action, and entitlements from other sources. Subsection 11E(2) provides that primary carer leave does not include personal or carer s leave, annual leave, long service leave or bereavement leave, or leave purchased by the employee in accordance with the terms and conditions of their employment. It also does not include leave where the main purpose is to support the primary carer of the child and not to provide care directly for the child itself; or develop initial bonds with a child, such as a newborn or newly-adopted child (such as some forms of paternity leave). To avoid doubt, subsection 11E(3) makes it clear that paragraph 11E(2)(c) does not apply to leave the main purpose of which is to allow an employee to be the primary carer for a child. 8

12 New section 11F Primary carer pay, paid PC leave and paid PC leave period for a child Subsection 11F(1) defines primary carer pay (or PC pay) as an amount that a person is entitled to be paid by their employer under the terms and conditions of their employment whilst on primary carer leave as defined by new section 11E. Where a person receives primary carer pay during primary carer leave, that leave is defined as paid PC leave. The paid PC leave period for a child is defined as the length of the paid PC leave, rounded down so that any part of that period that does not represent a whole day of the employer s entitlement to PC leave is not included. This is not intended to affect employees whose entitlement to PC leave is based on part-time working arrangements. Subsection 11F(2) provides that subsection 11F(1) is subject to subsections 11F(3) to (11). Subsection 11F(3) provides that the PPL rules may prescribe classes of payment provided by an employer that are or are not to be taken to be primary carer pay. Subsection 11F(4) and 11F(5) apply where, under the terms and conditions of a person s employment, the amount of primary carer pay they receive is calculated based on the amount of Government-funded parental leave pay they receive. The effect of the provisions is that it is deemed that the person will receive an amount of primary carer pay that is calculated on the basis of them receiving Government-funded parental leave pay that is not adjusted for the purpose of primary carer pay. Subsection 11F(4) provides that subsection 11F(5) applies where the amount of an employee s primary carer pay is calculated based on the amount of Government-funded parental leave pay they receive. Subsection 11F(5) provides that the amount of primary carer pay received for each day of this type is treated as the amount that it would be disregarding subsection 11B(3), inserted by item 17. Example: Linda is entitled to 18 weeks of paid primary carer leave, paid at the difference between the amount of Government-provided parental leave pay she receives and her usual salary. Linda s usual salary is $1,000 per week that is, $200 per day (assuming a five day work week). Linda s PPL entitlement, disregarding any adjustment for paid primary carer leave, is 18 weeks (90 week days) at $ per day. Subsection 11F(7) treats Linda s employer s contribution as Linda s primary carer pay. That is, $200 minus $131.40, which results in $68.60 per day being Linda s primary carer pay. 9

13 A note alerts the reader to a transitional provision which maintains current arrangements for such cases where the child is born or entrusted to the care of a person during the 3-year period starting on the commencement of this section. This will allow time for parents with such arrangements to renegotiate the arrangements prior to the deeming effect applying. Subsections 11F(6) provides that subsection 11F(7) applies where a person is on primary carer leave and that period contains one or more days where primary carer pay is not payable to them by their employer, and where the employee ordinarily works on that day or days and would otherwise have been entitled to pay, but for the period of primary carer leave, if they had worked. Subsection 11F(7) provides that, in the circumstances prescribed by subsection 11F(6), the paid primary carer leave period for a child is the shortest period that starts on the first day of the paid primary carer leave and contains the number of week days that primary carer pay is payable. The effect of this is that, where a person s paid primary carer leave is not taken in a continuous period, only the paid leave periods are considered for the purpose of calculating their entitlement to paid parental leave. Subsection 11F(8) provides that, if primary carer pay for a child is payable as a lump sum, but the amount of that lump sum does not depend on the length of leave taken, then the paid primary carer leave period will be taken to contain the number of week days equal to that lump sum divided by the daily National Minimum Wage amount applicable for the first day of that paid primary carer leave. Example: Mary is entitled to a lump sum payment from her employer, valued at $7,000, paid to her because she is expecting a child. Mary s child is born on 11 July Mary s primary carer pay entitlement has a paid primary carer leave period that starts on 11 July 2017 and ends on 2 October 2017, containing 60 week days. That is, $7,000 divided by $116 (assumed to be the daily National Minimum Wage rate in application on 11 July 2017 for the purpose of this example only), which is days, rounded down to 60 week days. Subsection 11F(9) provides that subsection 11F(10) applies when a person chooses to take their PC leave entitlement at a lower percentage over a longer period (such as half pay). Subsection 11F(10) provides that, in the circumstances prescribed at subsection 11F(9), the paid PC leave period is the period the person would be entitled to at full pay. 10

14 Example: Angela is entitled to a 12-week paid PC leave entitlement at her full wage. Angela elects to take this entitlement at half pay, therefore receiving 50 per cent of her usual wage over a 24-week period. Angela s PC leave period is 12 weeks. Subsection 11F(11) provides that, where a person has more than one entitlement to primary carer leave, the PPL rules may specify: how to determine the amount of primary carer pay; the paid primary carer leave; and the paid primary carer pay period. Specifying how to treat people who have multiple primary carer leave entitlements in the PPL rules will provide the flexibility necessary to deal with these unusual and varying circumstances as they become known. New section 11G Parental leave pay supplement for a child Paragraph 11G(1)(a) provides that a person is entitled to parental leave pay supplement if the person has a supplement period for the child. Paragraph 11G(1)(b) provides that, if a person has returned to work, the claim for the parental leave pay supplement must be made within 28 days of returning to work. Subsection 11G(2) provides that the amount of a person s parental leave pay supplement for a paid PC leave period is the amount by which the person s primary carer pay during the supplement period falls short of the National Minimum Wage for the supplement period. This is calculated by multiplying the daily National Minimum Wage on the last day of the period with the number of week days in the supplement period. The amount of primary carer pay the person received in the supplement period is subtracted from the National Minimum Wage. The shortfall will be the amount of parental leave supplement the person receives. Example Michelle is entitled to 6 weeks of paid primary carer leave at $400 per week. Michelle s paid primary carer leave is between 4 July 2017 and 14 August Michelle s child was born on 15 July Michelle s maximum supplement period starts on first day of her paid primary carer leave and ends 30 week days later on 12 August 2017 (worked out under section 11H). The amount of Michelle s paid primary carer pay for a day is $80 ($400 divided by 5). $116 minus $80 ($116 is assumed to be the daily National Minimum Wage rate applying on 15 July 2017 for the purpose of this example only), is $36. $36 is the daily PC pay shortfall entitlement. 11

15 Subsection 11G(4) provides that, for the purpose of the Paid Parental Leave Act and any other law of the Commonwealth, parental leave pay supplement is treated as parental leave pay, and any parental leave pay supplement that is payable is an instalment of parental leave pay. Paragraph 11G(5) is a technical amendment to clarify that any reference to paid parental leave in Division 2 of Part 2 of the Paid Parental Leave Act also includes a reference to parental leave pay supplement. Paragraph 11G(6) provides that subsection 11G(4) does not apply to section 11 of the Paid Parental Leave Act. New section 11H Supplement period and maximum supplement period for a child Subsection 11H(1) defines the supplement period as the period specified in a determination under: section 13 in accordance with subsection 13(3B); or section 14 in accordance with subsection 14(3B) or 14(6D); or section 15 in accordance with subsection 15(1B) or 15(5D); or section 16 in accordance with subsection 16(4D). Subsection 11H(2) provides that the supplement period must be the same as or within the maximum supplement period for the child. Subsection 11H(3) provides that the maximum supplement period is the shortest period that starts on the first day of the person s paid primary carer leave and: for a primary claimant, contains the number of week days in their adjustment for paid primary carer pay determined by subsection 11J(1); and, for a secondary claimant, contains the number of week days determined by subsection 11J(2). Example: Rebecca is entitled to four weeks of primary carer pay at $700 per week. Rebecca starts her paid primary carer leave period on 4 July 2017 and finishes on 31 July Rebecca s child was born on 15 July Rebecca s nominated PPL start date is 1 August There are 70 weekdays in Rebecca s maximum PPL period (worked out under subsection 11B(2)). There are 90 weekdays in Rebecca s maximum PPL period for her child. 90 days minus 70 days is 20 days. supplement period. 20 days is Rebecca s maximum 12

16 Subsection 11H(4) provides that a person does not have a maximum supplement period for a child if the person s paid primary carer leave for the child is payable wholly as a lump sum. This subsection has the effect that the person does not have a supplement period for the child. Where parents employer-provided paid primary carer leave is paid wholly as a lump sum, there will be no Government-provided parental leave pay supplement payable. The primary carer leave payments will be calculated as a daily amount at a rate approximating that of the national minimum wage, and if that amount is less than an 18 week period, the parent will receive parental leave pay at the national minimum wage rate for the remaining days or weeks of the period New section 11J Adjustment for paid PC leave for a child Subsection 11J(1) provides that the adjustment for paid primary carer leave for a primary claimant is the number of week days calculated by subtracting the number of week days in a person s maximum PPL period (adjusted to take into account a person s paid PC leave) from the number of week days in a person s maximum PPL period for the child calculated in accordance with subsection 11B(1) (which has not been adjusted to take into account a person s paid PC leave). Subsection 11J(2) and 11J(3) provide for the calculation of the number of week days in the adjustment for paid primary carer leave for a secondary claimant. That number is determined by calculating the number of week days that would be determined under subsection 11J(1) as if the secondary claimant were the primary claimant. However, subsection 11J(3) provides that there is a cap of 90 minus the number of week days in the primary claimant s supplement period, minus the number of week days in the primary claimant s PPL period. If the number worked out under subsection 11J(1) exceeds the cap, then the number of week days in the secondary claimant s maximum supplement period will be set at the cap. This is to ensure that the PPL period for the primary claimant and maximum supplement periods for the primary claimant and the secondary claimant do not exceed 90 week days (or 18 weeks) when combined. Example: Mim is entitled to eight weeks of paid primary carer leave at $600 per week. Mim s maximum supplement period under subsection 11J(1) contains 40 week days that is, 90 week days (the unadjusted maximum PPL period) minus 50 week days (the adjusted maximum PPL period after applying paragraph 11B(2)(a)). Mim is transferring her whole PPL entitlement to her husband Todd, a secondary claimant. Todd is entitled to 12 weeks of paid primary carer leave at $400 per week. 13

17 Under subsection 11J(2), the number of week days in Todd s maximum supplement period is the number of week days that would be worked out under subsection 11J(1) if Todd were the primary claimant. The number of week days under paragraph 11J(1)(a), worked out by applying paragraph 11B(2)(a) on the assumption that Todd is the primary claimant, is 30 days. That result is achieved by subtracting 60 days (the number of week days in Todd s 12 week paid primary carer leave entitlement) from 90 days (the number of week days in the 18-week unadjusted maximum PPL period). The number of week days in paragraph 11J(1)(b) is the maximum PPL period calculated by subsection 11B(1) that is, 90 days. Therefore, the result of subsection 11J(1) is 90 days minus 30 days, which is 60 days. Subsection 11J(2) further provides that, if this result of section 11J(1), as worked out for Todd, exceeds 50 days (that is, the result of 90 week days minus the number of week days in Mim s maximum supplement period, which is 40 days), then reduce the number of week days in Todd s maximum supplement period by the difference. Therefore, as the difference between 60 days and 50 days is 10 days, Todd s maximum supplement period is reduced from 60 days, to 50 days. Subsection 11J(4) provides for the calculation of the maximum supplement period where section 11C applies and there is no PPL period. Paragraph 11J(4)(a) disregards subsection 11C(2) (that there is no PPL period). Instead, under paragraph 11J(4)(b), it is assumed that the number of week days in the maximum PPL period for the child is zero. This has the effect that, where a person has no PPL period as their paid PC leave period is 18 weeks or longer, but the person s PC pay is less than the National Minimum Wage, the person will still have a top-up PPL period calculated in accordance with section 11G. Example: Jill is entitled to 20 weeks of paid primary carer leave at $300 per week. Jill starts her paid primary carer leave period on 4 July 2017 and finishes on 20 November Jill s child was born on 15 July 2017 and her nominated PPL start date is 1 August As Jill has 100 week days in her primary carer leave period, which exceeds the 90 week days in the maximum PPL period end day prescribed at subsection 11B(1), section 11C applies, as Jill has a maximum adjustment for paid primary carer leave and therefore no PPL period. To work out Jill s maximum supplement period, subsection 11J(4) provides that subsection 11J(1) should be worked out as if the number of week days in the maximum PPL period for the child is zero. 14

18 Therefore, subsection 11J(1) takes the maximum PPL period for the child (worked out according to subsection 11B(1), which is 90 week days (18 weeks), and subtracts zero days from it, resulting in a maximum supplement period of 90 week days. Example: Jo is entitled to eight weeks of paid primary carer leave at $1,000 per week. Jo s baby is born on 11 July Jo started her paid primary carer leave on 27 June 2017, and ends her paid primary carer leave on 21 August Jo s maximum PPL period start day is her nominated start date of 22 August Jo s adjustment for primary carer pay is the number of week days in the paid primary carer leave period. The number of weekdays between 27 June 2017 and 19 August 2017 is 40. Jo s maximum PPL period end day (worked out under paragraph 11B(1)(a)) is the 126 th calendar day of the PPL period, reduced by 40 weeks days, which is the 50 th week day in the PPL period, which is 28 October Item 18 amends section 12, which sets out a Guide to Part 2-2, by repealing the paragraph relating to Division 5 and substituting a new paragraph relating to provisional entitlement determinations. Those determinations can be made by the Secretary before a payability determination if the person satisfies or will satisfy certain requirements for a payability determination. Item 19 repeals and substitutes subsections 13(2) and 13(3), regarding determinations on a claim made by a primary claimant for parental leave pay. Paragraph 13(2)(a) provides that the Secretary must determine that parental leave pay is payable where the primary claimant has a PPL period and the primary claimant meets the eligibility criteria from the day the child is born until the last day of their PPL period. Paragraph 13(2)(b) provides that the Secretary must determine that parental leave pay is payable where the primary claimant has a supplement period and the primary claimant meets the eligibility criteria from the day the child is born until the last day of the supplement period. Subsection 13(3), requires the Secretary to state in a determination for parental leave pay that the primary claimant s PPL period starts on the child s maximum PPL period start day and ends on the day worked out under subsection 13(3A). Subsection 13(3A) provides that the Secretary must be satisfied that the primary claimant is or will be eligible for parental leave pay on each day in the PPL period that starts on the child s maximum PPL period start day and ends on a day in that maximum PPL period. If the primary claimant is or will be eligible for every day in the maximum PPL period, then the end day is the last day of that period. 15

19 Subsection 13(3B) requires the Secretary to state in a determination for parental leave pay that a primary claimant s supplement period starts on the first day of the maximum supplement period for the child and ends on the day worked out under subsection 13(3C). Subsection 13(3C) provides that the Secretary must be satisfied that the primary claimant is or will be eligible on each day in the supplement period. The first day in the supplement period is either: where the first day of the maximum supplement period is before the birth of the child, the day the child was born; or otherwise the first day in the maximum supplement period. The last day in the period is a day in the maximum supplement period. If the primary claimant is or will be eligible for every day in the maximum supplement period, then the end day is the last day of that period. Item 20 repeals and substitutes subsections 14(2) and 14(3), regarding determinations on claims made at the same time by primary and secondary claimants, where both claimants are sharing parental leave pay. Paragraph 14(2)(a) provides that the Secretary must determine that parental leave pay is payable where the primary claimant has a PPL period and the primary claimant meets the eligibility criteria from the day the child is born until the last day of their PPL period. Paragraph 14(2)(b) provides that the Secretary must determine that parental leave pay is payable where the primary claimant has a supplement period and the primary claimant meets the eligibility criteria from the day the child is born until the last day of the supplement period. Subsection 14(3), requires the Secretary to specify in a determination for parental leave pay that the primary claimant s PPL period starts on the child s maximum PPL period start day and ends on the day worked out under subsection 14(3A). Subsection 14(3A) provides that the Secretary must be satisfied that the primary claimant is or will be eligible for parental leave pay on each day in the PPL period that starts on the child s maximum PPL period start day and ends on a day in that maximum PPL period. If the Secretary is satisfied the primary claimant will be eligible for the entire maximum PPL period, then the end day is the last day of that period. Subsection 14(3B) requires the Secretary to specify in a determination for parental leave pay that a primary claimant s supplement period starts on the first day of the maximum supplement period for the child and ends on the day worked out under subsection 14(3C). Subsection 14(3C) provides that, if the Secretary is satisfied that the primary claimant is or will be eligible on each day in the supplement period that starts: where the first day of the maximum supplement period is before the birth of the child, the day the child was born; or otherwise the first day in the maximum supplement period, and ends on a day in the maximum supplement period. If the Secretary is satisfied the primary claimant will be eligible for the entire maximum supplement period, then the end day is the last day of that period. 16

20 Item 21 repeals and substitutes subsections 14(5) and 14(6), regarding determinations on claims made at the same time by primary and secondary claimants, where both claimants are sharing parental leave pay. Subsection 14(5) provides that the Secretary must determine that parental leave pay is payable to a secondary claimant if the Secretary is satisfied that a determination has been made for a primary claimant and subsection 14(5A) applies. Paragraph 14(5A)(a) provides that parental leave pay is payable where the secondary claimant has a PPL period and was or will be eligible for parental leave pay in that period. Paragraph 14(5A)(b) provides that parental leave pay is payable where the secondary claimant has a supplement period and was or will be eligible for parental leave pay on each day in that period commencing on or after the child is born. Subsection 14(6) provides that the Secretary must specify the secondary claimant s PPL period in the determination. That period starts on the first day after the primary claimant s PPL period ends and ends on the day worked out under subsection 14(6A). Subsection 14(6A) provides that the secondary claimant s PPL period starts on the day worked out under subparagraph 14(6)(a), which is the first day after the primary claimant s PPL period ends. If the secondary claimant does not have any paid primary carer leave, subparagraph 14(6A)(b)(i) applies and the secondary claimant s PPL period will end on the last day that the secondary claimant was or will be eligible in the maximum PPL period for a child. If the secondary claimant does have paid primary carer leave, paragraph 14(6A)(b)(ii) applies and the PPL period will end on the last day that they are continuously eligible in the maximum PPL period for a child that is followed by the number of days in the secondary claimant s adjustment for paid primary carer leave. This adjustment is made to the secondary claimant s PPL period in order to account for any paid primary carer leave that the secondary claimant is entitled to. Subsection 14(6B) provides that subparagraph 14(6A)(b)(ii), which reduces the secondary claimant s PPL period where the secondary claimant has a period of paid primary carer leave, does not apply where the Secretary is satisfied that the secondary claimant made the claim in exceptional circumstances. The effect of this is that the secondary claimant s period will not be reduced by a period of paid primary carer leave the secondary claimant takes. Subsection 14(6C) clarifies that, if the secondary claimant has a paid PC leave period for the child and the PPL period end day worked out under subparagraph 14(6A)(b)(ii) is before the PPL period start day mentioned in paragraph 14(6A)(a), the secondary claimant does not have a PPL period. Subsection 14(6D) provides that the Secretary must specify the secondary claimant s supplement period, which is determined in accordance with the PPL rules. 17

21 Specifying how to determine the supplement period for secondary claimants in the PPL rules will provide the flexibility necessary to deal with unusual and varying circumstances, and avoid a significant level of complexity in the primary legislation. Item 22 inserts after section 15(1) new subsections 15(1A), 15(1B) and 15(1C). Section 15 applies to determinations on claims made at the same time by primary and secondary claimants, where the secondary claimant is to receive all the parental leave pay. The primary claimant may be entitled to a lump sum supplement of parental leave pay in these circumstances. Subsection 15(1A) provides that the Secretary must determine that parental leave pay is payable to the primary claimant where the primary claimant has a supplement period and the primary claimant meets the eligibility criteria from the day the child is born until the last day of the primary claimant s supplement period. Subsection 15(1B) requires the Secretary to state in a determination for parental leave pay that a primary claimant s supplement period starts on the first day of the maximum supplement period for the child and ends on the day worked out under subsection 15(1C). Subsection 15(1C) provides that, if the Secretary is satisfied that the primary claimant is or will be eligible on each day in the supplement period, starting either: where the first day of the maximum supplement period is before the birth of the child, the day the child was born; or otherwise the first day in the maximum supplement period, until a day in the maximum supplement period, then the end day is that day. If the Secretary is satisfied the primary claimant will be eligible for the entire maximum supplement period, then the end day is the last day of that period. Item 23 is a minor amendment to subsection 15(2) to state that the Secretary must determine that PPL is not payable to a primary claimant only if the Secretary is not satisfied that the person meets the requirements of subsection 15(1A), inserted by item 22 above, and is eligible for a supplementary amount. Item 24 is a minor amendment to subsection 15(3) deleting the phrase for the secondary claimant s PPL period. Item 25 is a technical amendment and repeals and replaces paragraph 15(3)(b), which required that the secondary claimant be eligible for parental leave pay on each day in their PPL period. This requirement has been moved to new subsection 15(3A). Item 26 inserts new subsection 15(3A). Paragraph 15(3A)(a) provides that parental leave pay is payable where the secondary claimant has a PPL period and was or will be eligible for parental leave pay on each day in that period. Paragraph 15(3A)(b) provides that parental leave pay is payable where the secondary claimant has a supplement period and was or will be eligible for parental leave pay on each day in that period commencing on or after the child is born. 18

22 Item 27 repeals paragraph 15(5)(b) and replaces it with a reference to new subsection 15(5A). Item 28 inserts a new subsections 15(5A), 15(5B), 15(5C) and 15(5D). These provisions relate to the calculation of the length of a secondary claimant s PPL period. Subsection 15(5A) provides that, if the Secretary is satisfied that the secondary claimant was or will be eligible for each day in the period that starts on the child s maximum PPL period start day, the period ends on the day worked out under paragraph 15(5A)(b). If the secondary claimant does not have any paid primary carer leave, subparagraph 15(5A)(b)(i) applies and the secondary claimant s PPL period will end on the last day that they are continuously eligible in the maximum PPL period for the child. If the secondary claimant does have paid primary carer leave, subparagraph 15(5A)(b)(ii) applies and the PPL period will end on the last day that the secondary claimant is eligible in the maximum PPL period for a child that is followed by the number of days in the secondary claimant s adjustment for paid primary carer leave. This adjustment is made to the secondary claimant s PPL period in order to account for any paid primary carer leave that the secondary claimant is entitled to. Subsection 15(5B) provides that subparagraph 15(5A)(b)(ii), which reduces the secondary claimant s PPL period where the secondary claimant has a period of paid primary carer leave, does not apply where the Secretary is satisfied that the secondary claimant made the claim in exceptional circumstances. The effect of this is that the secondary claimant s PPL period will not be reduced by a period of paid primary carer leave the secondary claimant takes. Subsection 15(5C) clarifies that, if the secondary claimant has a paid PC leave period for the child and the PPL period end day worked out under subparagraph 15(5A)(b)(ii) is before the PPL period start day mentioned in paragraph 15(5A)(a), the secondary claimant does not have a PPL period. Subsection 15(5D) provides that the Secretary must specify the secondary claimant s supplement period, which is determined in accordance with the PPL rules. Specifying how to determine the supplement period for secondary claimants in the PPL rules will provide the flexibility necessary to deal with unusual and varying circumstances, and avoid a significant level of complexity in the primary legislation. Item 29 repeals subsection 16(3), regarding determinations on secondary claims made after an effective primary claim, and replaces it with new subsections 16(3) and 16(3A). Substituted subsection 16(3) provides that, for parental leave pay to be payable to the secondary claimant, the Secretary must be satisfied that a determination under section 13 that parental leave pay is payable to the primary claimant was or will be in force on the day before the start of the secondary claimant s PPL period and that subsection 16(3A) applies. 19