Bills Digest No.
95, 2019–20
PDF version [628KB]
Don Arthur
Social Policy Section
David Markham
Law and Bills Digest Section
11
May 2020
Contents
Purpose of the Bill
Structure of the Bill
Background
Committee consideration
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Date introduced: 6
February 2020
House: House of
Representatives
Portfolio: Social
Services
Commencement: Sections
1 to 3 of the Bill (the technical sections) to commence on the date of Royal
Assent. Schedules 1 and 2 will commence on 1 April 2020.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at May 2020.
Purpose of
the Bill
The purpose of the Paid Parental Leave Amendment
(Flexibility Measures) Bill 2020 (the Bill) is to amend the Paid Parental Leave
Act 2010 (the Act) to create a new flexible period of Parental
Leave Pay. The Bill proposes to reduce the continuous paid parental leave
period from 18 weeks to 12 weeks, while introducing six weeks (30 days) of
flexible paid parental leave days which may be taken after the continuous paid
parental leave but before the child’s second birthday. Alternatively parents
may opt to continue using the existing 18 week continuous leave arrangements.
The total period, and the rate of pay (national minimum wage), would remain
unchanged.
The Bill also makes consequential amendments to the A New Tax System
(Family Assistance) Act 1999 and changes to the A New Tax System
(Family Assistance) (Administration) Act 1999 (the Family
Assistance Acts).
The measure was announced in the 2018 Women’s Economic Security
Statement and included in the Mid-Year Economic and Fiscal Outlook 2018–19.[1]
Structure of
the Bill
The Bill is divided into two schedules
- Schedule
1 contains changes to the Act and the Family Assistance Acts to
implement the proposed changes to Parental Leave Pay and
- Schedule
2 contains transitional provisions.
Background
Despite its name, the current paid parental leave scheme
does not provide an entitlement to parental leave. In their guide to parental
leave, Erin McCarthy, Elise Jenkin and Andrew Stewart explain, the Paid
Parental Leave Act 2010:
... does not in fact confer any entitlement to parental
leave. Instead, it permits eligible carers to apply for what is, in effect,
a social security payment that is spread over up to 18 weeks, so long as the
carer does not return to work during that period.
Being able to receive this payment may help fund time away
from work. But it does not of itself mean that a carer can take leave
from their job, and be guaranteed that it will still be there when they want to
return to work.[2]
Workers’ entitlements to unpaid parental leave are part of
the Fair Work system created by the Fair Work Act 2009.
Under the Fair Work Act, parents (on a gender neutral basis) may access
up to 12 months of continuous unpaid parental leave,[3]
and may request an additional 12 months of leave.[4]
The Fair Work system is a national workplace relations system that covers most
Australian workplaces.[5]
Many parents access ‘paid leave’ by combining their
entitlements to Parental Leave Pay under the Paid Parental Leave Act
with their entitlements to unpaid parental leave under the Fair Work Act.
Under the Fair Work Act, unpaid parental leave may only be taken in a
single continuous period and cannot be taken on a flexible basis in the same
way that the Bill’s proposed flexible PPL period can.[6]
Alan Tudge, Minister for Population, Cities and Urban
Infrastructure, recognised this in his second reading speech for the Bill:
Pending passage of the changes to the Paid Parental Leave
Scheme, the government also intends to make complementary amendments to
increase the flexibility of the existing unpaid parental leave entitlement in
the Fair Work Act 2009. This will help ensure that parents who wish to
access their parental leave pay flexibly will have access to a corresponding
flexible unpaid parental leave entitlement.[7]
At the time this Digest was written, the Government had
not provided information on these complementary amendments.
Parental
Leave Pay under the Paid Parental Leave Act 2010
The Paid Parental Leave Act provides eligible
working parents with up to 18 weeks of payment at the National Minimum Wage
(currently $740.80 per week)[8]
when they take leave from work to care for a newborn or recently adopted child.
The payment is known as Parental Leave Pay.
Parental Leave Pay is administered outside the workplace
relations system. Policy responsibility for the scheme lies with the
Commonwealth Department of Social Services (DSS) and the scheme is administered
by Services Australia.[9]
These are the agencies responsible for the income support and family assistance
systems.
Parental Leave Pay is available to parents who are
self-employed as well as those who are employees. It covers employees outside
the Fair Work System (such as some state public servants) as well as those
covered by the Fair Work Act.
Eligibility
Generally, to be eligible for Parental Leave Pay, a person
must be the primary carer of the child and be on leave or not working. The person
must also satisfy a work test, an income test and an Australian residency test.[10]
Work test
Parental Leave Pay is not restricted to employees or to
those who have an entitlement to unpaid parental leave under the Fair Work
Act. It may also be available to independent contractors, people who are
self-employed and employees who have been with their current employer for less
than 12 months.
According to the Department of Social Services’ Parental
Leave Pay Guide:
To meet the work test for [Parental Leave Pay], a claimant
must have performed, whether in Australia or not, 330 hours of qualifying work
over a period spanning at least 295 days (around 10 months) within the 392 day
period (around 13 months) prior to the expected or actual [date of birth] or placement
of the child for adoption.
... A birth mother may also satisfy the work test if Centrelink
is satisfied they would have met the work test but for the fact that the child
was born prematurely and/or they had pregnancy-related illness or complications
that prevented them from performing paid work.[11]
The Parental Leave Pay work test does not require a
minimum period of continuous service with a single employer.[12]
Income test
Under the income test, claimants are not eligible for
Parental Leave Pay if their adjusted taxable income is more than $150,000 in
the relevant year. This is a ‘sudden death’ income test—that is, there is no
taper.[13]
A claimant who earns $150,001 per annum will receive nothing as their income is
above the threshold.
When introducing the Parental Leave Pay scheme in 2010,
Jenny Macklin, then Minister for Families, Housing, Community Services and
Indigenous Affairs, explained that the income test is ‘consistent with the
principle of targeting government support to those most in need.’[14]
The principle of targeting according to need is widely used in the income
support and family assistance systems.
Residency test
Claimants must also meet a residency test to be eligible
for Parental Leave Pay (broadly speaking, this requires that the claimant be an
Australian resident). The conditions are similar to those in place under family
assistance law.[15]
How Parental
Leave Pay is paid
To receive Parental Leave Pay a claimant must lodge a claim
with Services Australia. For employees, Services Australia will normally pay
the claimant’s employer and the employer will pass the payments onto the
employee. However, in some cases, Services Australia will pay the employee
directly.[16]
Services Australia will also pay a claimant directly if the claimant is self employed.[17]
Unpaid leave
entitlements under the Fair Work Act
Currently the Fair Work Act provides employees with
an entitlement to at least 12 months unpaid parental leave as part of the
National Employment Standards.[18]
An employee can take unpaid parental leave when:
- they
give birth
- their
spouse or de facto partner gives birth
- they
adopt a child under 16 years of age.[19]
The unpaid parental leave provisions in the Fair Work
Act recognise same sex relationships.
Eligibility
To be eligible for unpaid parental leave an employee must have
completed at least 12 months of continuous service with a single employer. This
can include long term casual employees.[20]
Because unpaid parental leave only covers employees, it does
not provide any entitlements for independent contractors.
Both
partners can be entitled to leave
Where both members of a couple are employees they may each
be entitled to 12 months unpaid parental leave. The couple can take leave at
the same time for a maximum of eight weeks. The rest of the leave entitlements
must be taken at different times.[21]
An employee who takes 12 months unpaid parental leave can
ask for an extension of a further 12 months. However, an employee couple cannot
take more than 24 months of unpaid parental leave between them.[22]
‘Use it or
lose it’
An employee must take their leave entitlement in a single
continuous period.[23]
If an employee returns to work before the end of the leave period, they forfeit
the remainder of their entitlement.[24]
Comment
Because most employees rely on both the Fair Work Act
and the Paid Parental Leave Act in order to access ‘paid leave’,
employees would receive more benefit from the measures in this Bill if
complementary amendments were made to the Fair Work Act.
When the measures in this Bill were first announced in the
Women’s Economic Security Statement, the Government focused on the benefits of
flexibility for women who were self-employed.[25]
However, in his second reading speech Alan Tudge announced that the Government
‘intends to make complementary amendments to increase the flexibility of the
existing unpaid parental leave entitlement in the Fair Work Act 2009.’[26]
Currently, unpaid parental leave may generally only be taken
in a single continuous period, on a ‘use it or lose it basis’. Unpaid parental
leave then cannot be taken for flexible PLP days. This is acknowledged by the
Explanatory Memorandum:
Currently, eligible employees are entitled to take up to 12
months’ [unpaid parental leave] UPL associated with the birth or adoption of a
child. UPL must generally be taken in a single continuous period starting no
later than the birth or adoption of the child. This means, under the existing
framework, that once an employee returns to work they will usually forfeit any
remaining untaken UPL.
If an employee wishes to access flexible Parental Leave Pay
they will general (sic) need to negotiate time off work or a part time return
to work with their employer.[27]
It is not clear what amendments to the Fair Work Act
the Government will propose. The desirability of complementary amendments to
the Fair Work Act was also raised by a number of interested parties in
commenting on the Bill (see below in the Position of Major Interest Groups
section).
Women’s Economic
Security statement
The measures in this Bill were announced as part of the 2018
Women’s Economic Security statement.[28]
The statement emphasised the benefits to women who were self-employed. In a November
2018 interview, Kelly O’Dwyer, the Minister for Jobs and Industrial Relations
and Minister for Women, said:
... we know that there are thousands of parents that don't
access all of their parental leave payment, which means they are missing out.
It’s a pretty rigid system right now. You have got your 18 weeks and use it or
you lose it. We know that families actually want more choices about their
family arrangements. It doesn't take into account that there are many women who
are self-employed, who are running their own small-businesses and who can't
spend 18 weeks away from their business. So we want to give them the
flexibility to choose to take that parental pay leave payment in blocks in a
way that suits them. We also recognise that there are many fathers who also
want to spend time as the primary care-giver with their families as well.[29]
The Women’s Economic Security statement did not mention complementary
amendments to the Fair Work Act to improve flexibility for employees.
Committee
consideration
Senate
Community Affairs Legislation Committee
The Bill was referred to the Senate Community Affairs
Legislation Committee for inquiry and the Committee reported in March 2020.
Details of the inquiry are at Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020.[30]
The Committee recommended that the Senate pass the Bill.[31]
In their additional comments, both the Labor Party Senators and Greens Senator
Rachel Siewert recommended that the Bill be passed.[32]
The Committee noted that while the submissions they
received supported the measures in the Bill, they also put forward a number of
proposals ‘to further enhance the paid parental leave scheme.’[33]
In their additional comments, Labor Senators noted
proposals to further improve the Paid Parental Leave Scheme and recommended:
Labor Senators call on the Government to bring forward significant
improvements to Australia’s PPL system, in light of the evidence provided to
the committee and reforms that have been implemented in similar countries.[34]
While supporting the Bill, Australian Greens Senator
Rachel Siewert argued that ‘additional reforms are needed to facilitate gender
equality, value care work, and maximise the flexibility parents have to
determine care arrangements for their children.’[35]
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
had no comments on the Bill.[36]
Policy
position of non-government parties/independents
In her second reading speech on the Bill, Shadow Minister
for Families and Social Services Linda Burney said that Labor supported the
changes in the Bill.[37]
As noted above, Labor Senators supported the Senate Community Affairs
Legislation Committee recommendation that the Bill be passed.
In the second reading debate in the House of
Representatives, the Leader of the Australian Greens Adam Bandt MP was supportive
of the Bill, noting that ‘this bill goes some way towards addressing some
problems’. However he considered that other changes to parental leave and
industrial relations laws would be desirable.[38]
As noted above, Senator Siewert expressed her support for the Bill in
additional comments in the Senate Community Affairs Legislation Committee’s
report into the Bill, while calling for additional reforms.[39]
In the same debate, the Member for Indi, Helen Haines MP,
supported the Bill, and stressed the desirability of increased flexibility that
it provided. However, she suggested that paid parental leave legislation could
be further improved by abolishing the distinction between primary and secondary
claimants, so that parents could themselves decide how the provisions should be
used, and that men might be encouraged to take a greater role in child care.[40]
The Member for Warringah, Zali Steggall MP, also supported
the Bill. She also suggested further improvements could be made in future, such
as increasing the number of weeks’ paid parental leave and implementing
policies that supported men who wanted to take time off work to care for their
children.[41]
Position of
major interest groups
21 interest groups made submissions to the inquiry by the Senate
Community Affairs Legislation Committee.[42]
None of these groups opposed the Bill, however, several suggested further
changes to the Parental Leave Pay scheme as well as changes to the Fair Work
Act.
Suggested
changes to the Parental Leave Pay scheme
A number of submitters argued that Australia’s Parental
Leave Pay scheme could be improved by changes in addition to those in the Bill.
Sex Discrimination Commissioner Kate Jenkins described the
Bill as ‘a further step forward in bringing the scheme of paid leave in
Australia in line with international best practice ...’[43]
The Australian Association of Social Workers (AASW) submission stated: ‘While
the AASW supports this Bill, we see it as an interim measure given that
Australia’s paid parental leave scheme is deeply lacking if we compare it
internationally to similar countries.’[44]
Suggested changes to the scheme include:
- extending
the Parental Leave Pay period[45]
- raising
the rate of Parental Leave Pay[46]
- adding
superannuation contributions to Parental Leave Pay[47]
- making
leave gender neutral.[48]
Changes to
the Fair Work Act
A number of submitters argued for amendments to the Fair
Work Act. For example, the Australian Council of Trade Unions recommended:
The Fair Work Act should be amended to provide for a
guaranteed, enforceable right to flexible working arrangements for parents and
carers, with a right to revert to former hours once caring responsibilities
have ceased.[49]
Financial
implications
According to information provided in the Explanatory
Memorandum, the financial impact for the Bill is a cost of $25.183 million over
the forward estimates.[50]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[51]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights has no
comments on the Bill.[52]
Key issues
and provisions
A basic summary of the amendments
The purpose of the Bill generally is to
change the nature of the Paid Parental Leave scheme. Under current legislation,
Paid Parental Leave is paid for up to 18 continuous weeks. This leave may be
taken in the year after the birth of a child. The new scheme separates this 18
weeks into two separate periods—an initial block of 12 weeks (the continuous
period), with the other six weeks (30 working days) being flexible days that
can be taken within two years after the birth of the child.
It will still be possible under the new provisions to take
Paid Parental Leave as an 18 week block by taking all of the flexible days
immediately after the continuous 12 week period ends, but this is no longer the
only option. Instead the flexible days can be taken at a time of the
applicant’s choosing.
Additionally, flexible PPL days, other than those that are
taken as a block in combination with the continuous period, are paid directly
by the Secretary (in practical terms Services Australia) to the claimant.[53]
This differs from continuous payments which are paid by the employer with funds
either paid in advance or later reimbursed by the Secretary (as is the case for
most claimants that have an employer during the continuous period).[54]
The Explanatory Memorandum states:
This is to avoid putting an additional, unnecessary
regulatory burden on employers.[55]
The introduction of flexible PLP, however, will mean that,
in some cases, claimants will first be paid through their employer for the
continuous period, before being paid by the Secretary directly for their
flexible PLP days.
The Paid Parental Leave scheme is still a government
funded scheme. All PLP paid to a person, even if paid through an employer, is
ultimately paid by the government.[56]
The rate of pay and maximum number of permissible days remain the same as the
current Act.
The current Act is already a somewhat complex piece of
legislation, with over 300 sections. The task of adding flexibility for scheme
recipients has, to some extent, added to this complexity, with the provisions
in the Bill necessarily set out in detail. As far as is possible, this Digest
will describe the new provisions in simple terms.
Naming
convention
It should also be noted that there are two similar, but
separate, acronyms with different meanings used in respect of this scheme—PPL
is an abbreviation of Paid Parental Leave, and describes the scheme as a whole.
PLP is an abbreviation of parental leave pay and refers to specific payments
made under the PPL scheme.
Thus, a person accessing their PPL entitlement will be
paid PLP.
Amendments to the Act
Dictionary & Outline Changes
Section 6 of the Act is entitled ‘The Dictionary’, and
contains definitions of terms used in the Act. Many of the terms are not fully
defined in section 6, but are rather defined by reference to other sections of
the Act.[57]
Items 17 to 24 inclusive of Schedule 1 to the Bill either add
definitions of terms not previously used, or amend current definitions to
include references to changes elsewhere in the Act proposed by the Bill. Item
19 adds definitions for new terms, including expected PPL period, flexible
PPL day, and flexible PPL period, by reference to other proposed new sections,
which are discussed below.
Claimants
The new provisions in regard to flexible PPL speak of
three types of claimant – primary, secondary and tertiary. These terms are
already defined in the Act.
The primary claimant is:
- the child’s birth mother;
- an adoptive parent of the child;
- a
person who satisfies the circumstances prescribed by the PPL rules as being
exceptional circumstances in which a primary claim can be made.[58]
A secondary claimant is:
- the partner of a primary claimant;
- a person who:
- is a parent of the child; and
- is not the primary claimant;
- a partner of a person covered by paragraph (b);
- a
person who satisfies the circumstances prescribed by the PPL rules as being
exceptional circumstances in which a secondary claim can be made.[59]
A tertiary claimant is:
Only a person who satisfies the circumstances prescribed by
the PPL rules as being exceptional circumstances in which a tertiary claim can
be made can make a tertiary claim for a child.[60]
A tertiary claimant might be, for example, a person who
was previously, but for specified reasons is no longer, the child’s primary
carer.[61]
Effective
continuation of current scheme, where applicant wishes
Item 25 of Schedule 1 to the Bill also proposes to
add new section 6A into the Act, which effectively preserves the
current PPL provisions. This section describes what will now be called ‘a
continuous PPL period and a continuous flexible period’. This continues to
allow, under the new regime of two payment streams, a person to take the full
amount of PPL in an 18 week block. If the PPL is taken in this manner, the last
possible day of PPL is the day before the child’s first birthday, as is now the
case.[62]
Flexible PPL
Eligibility Provisions
Proposed new sections 31AA and 31AB of the Act, at item
96 of Schedule 1, set out when a person is, and is not, eligible for PLP on
a flexible day for a child. These follow the current provisions in the Act, where
section 31 relates to general eligibility for parental leave pay, and section
31A contains provisions concerning a waiting period for newly arrived
residents. Item 96 of the Bill adds to this by inserting the eligibility
criteria for PLP on a flexible day in proposed section 31AA, including a
residency test, a care test, and a work and income test,[63]
in regard to the day for which payment is claimed. If the claimant is the
primary claimant (normally the birth mother) they must also satisfy the
residency test at the birth date.
If the claimant is a secondary or tertiary claimant they
are eligible if they satisfy the conditions prescribed by the PPL Rules (subsection
31AA(5)). The PPL Rules are defined in the Act as rules made by the
Minister under section 298 of the Act. The current Rules can be found
on the Federal Register of Legislation. These Rules will presumably need to be
amended following passage of the Bill.
Proposed section 31AB sets out situations where a
person is not eligible in respect of a particular day or days. This principally
prohibits payment for more than the maximum of flexible PPL days, or multiple
payments for the same day. The provisions also cover other situations such as
the death of the claimant, or claims for a day during a newly arrived
resident’s waiting period (NARWP). This last provision refers to provisions
already in place in the Act in section 31A.
Generally speaking, a person subject to a NARWP is not
entitled to PLP. However, there are exceptions to this where the person has
been assessed as currently eligible for certain other government payments. Item
102 proposes to add two new subsections to section 31A, subsections
31A(6A) and (6B), which also allow payment of PLP for flexible days
to a person where they are covered by one of those exemptions.
How a determination is made
(proposed sections 11A to 11C)
PLP for a flexible day is payable to a person if the
Secretary determines that it is. For a determination to be made the person must
be eligible and make a claim. For payment for a flexible PPL day the day must
be in the flexible PPL period determined under the Act. Generally, the
flexibility period occurs immediately after the end of the PPL period where
there is a single payability determination in force; where there is more than
one payability determination in force the flexible period occurs immediately
after the last PPL period in respect of the child.
Other
flexible PPL Determination Provisions
Item 76 of Schedule 1 proposes to set out the
provisions for determining whether flexible PPL days are payable to a claimant
by inserting a new Division 2A of Part 2-2 into the Act, which will
comprise sections 17A to 17D inclusive. Basically, a claim is payable
when the payee is eligible for payment on that day or days under the various
tests in the Act.
Proposed section 17A describes the decision-making
process for determining a flexible PPL days claim from a primary claimant. If
the claimant would be eligible for payment on a specific day, or days, the
Secretary must determine that PLP is payable for the claimed days (proposed
subsection 17A(2)). However, if the Secretary is not satisfied that
the claimant is eligible, under proposed subsection 17A(4) the Secretary
must reject the PPL claim in respect of certain days. In these circumstances,
if no previous decision had been made on the applicant in respect of the work
and income tests, the Secretary can determine that the claimant may be
conditionally eligible for flexible days in the event of a future claim.
Proposed section 17B sets out the process by which
the Secretary determines a secondary claim for flexible PPL days.[64]
A secondary claim can be granted either where the primary claimant has given
permission (proposed paragraph 17B(2)(a)), or where the claim was made
in ‘exceptional circumstances’ (subparagraph 17B(3)(b)(i)). ‘Exceptional
circumstances’ is not a defined term, and the Explanatory Memorandum does not
explain it. In administrative law, the expressions ‘exceptional ‘or ‘special’
circumstances are generally taken to mean unusual circumstances that cannot be
readily predicted or spelt out.[65]
As part of the decision-making process regarding payment
to a secondary claimant, the Secretary must be satisfied that the primary
claimant satisfies the work and income tests. The secondary claimant must also be
eligible for PLP on the claimed days (proposed paragraph 17B(2)(e) and subparagraphs
17B(3)(b)(ii)).
Similarly, proposed subsection 17C describes how a
tertiary claim is to be determined. The Secretary may determine that PLP is
payable to a tertiary claimant if a determination in respect of a secondary
claimant is in force, and if the tertiary claimant would be eligible for PLP on
the specified days.
Proposed section 17D allows the primary claimant to
give permission, and later revoke permission, for persons to make secondary
claims for flexible PPL days, up to the legislated cap for flexible PPL days
(30 days).
Currently, section 57 states that a PLP claim must include
a starting date, which can be changed before the payability determination is
made. Item 116 of Schedule 1 proposes to add section 57A, which
introduces similar provisions in respect of flexible PPL days.
Flexible PPL
Payment Provisions
Item 42 of Schedule 1 introduces proposed provisions
that set out when parental leave pay for a flexible PPL day for a child is
payable. This can occur when a relevant determination of the Secretary under proposed
sections 17A, 17B or 17C is in effect for a person.
Payment
Provisions
Current sections 62 to 70 of the Act set out the
provisions for the payment of PLP in instalments. Instalments can be paid
either by the claimant’s employer or by the Secretary,[66]
dependent on individual circumstances.[67]
Items 122 to 127 inclusive either add to or amend the provisions in
current sections 62 to 70 to include provision for flexible PPL.
Item 129 proposes to insert subsection 72(1A)
in the Act. This provision will mean that the employer is only required to pay
a claimant for a continuous PPL period, but including flexible PPL days that
fall within that continuous period. Otherwise flexible PPL days will be paid by
the Secretary. This is to avoid putting an additional, unnecessary, regulatory
burden on employers.[68]
As noted earlier, however, whether it is the employer or
the Secretary who makes the payment, the scheme is ultimately funded by the
Commonwealth.
Claim
Provisions
Current section 60 is about when a claim for PLP should be
made. Item 121 adds proposed subsection 60(2) which specifies the
period in which a flexible PPL claim can be made. This period commences 97 days
before the expected birth date and ends on either the child’s first or second
birthday, depending on whether the primary claimant has made an effective PLP
claim before the child’s first birthday. If an effective claim has been made in
that timeframe, a flexible PPL claim can be made up to the child’s second
birthday. If it has not, a flexible PPL claim can only be made up to the child’s
first birthday.
Debt
recovery provisions
Item 205 of Schedule 1 introduces proposed
section 190A, which allows debts to the Commonwealth to be deducted from
instalments payable under the Act. ‘Debts to the Commonwealth’ are already
defined in the Act (section 181) as meaning only debts under this Act. These
can arise in the case of mistaken payment or overpayment. That definition will
also cover proposed section 190A. The significance of the inclusion of
this section is that as PLP may now be paid for different periods separated by
time, overpayments for earlier periods may be able to be offset by withholding
future instalments. In the past, debts only arose after all PLP for a child had
been paid.[69]
Other provisions
Items 1 to 8 of Schedule 1 inclusive contain changes
to the Family Assistance Acts, to incorporate reference to the new
arrangements in the Act.
Items 129 to 145 inclusive contain necessary
amendments to the current sections 72 to 82, which cover the payment of
instalments by employers and contain provisions about the obligations of
employers in these circumstances, to take into account flexible PPL. These
provisions do not include any changes to general employer obligations.
Similarly necessary amendments are made to the current
provisions in relation to the payment of instalments by the Secretary (items
146 to 154) and to the general rules regarding the payment of instalments (items
155 to 161). These amendments do not contain significant policy changes,
other than the references to the new flexible PPL payments. The most
significant change is that the introduction of flexible PPL payments will mean
that these payments will be made by the Secretary, except where they are paid
as a block immediately following the continuous period. Currently, because of
the continuous nature of the entitlement, the employer is generally the vehicle
for payment of PLP.
Items 162 to 187 inclusive amend various sections of
the Act to include references to flexible PPL to the current provisions
concerning employer determinations. These do not in the main involve
significant changes. However, item 178, which introduces proposed
subsections 108(1A) to (1D) into the Act provides for additional
circumstances in which the Secretary must revoke an employer determination. The
reasoning behind this is that it is not reasonable to make the employer pay in
these circumstances, which are:[70]
- where
a payability determination for a flexible PPL day falling within the person’s
continuous flexible period is revoked[71]
- where
the PLP claim for a continuous flexible period includes a claim for weekend
days.[72]
Proposed subsection 108(1D) allows the Secretary to
set a date of revocation of an employer determination. This can be a past date,
which is permissible because it does not adversely affect anyone’s interests.
In the case of a claimant, a retrospective revocation of an employer declaration
will only affect who pays PLP, not whether PLP is paid or not.
Items 188 to 198 inclusive contain technical
amendments to the current provisions in the Act about ‘dad and partner pay’, to
take account of the new flexibility provisions, and to ensure consistency of
language in the Act.
Other items not specifically mentioned in this
Digest contain technical changes necessitated by the substantive changes in the
Bill.
Transitional provisions
While the proposed commencement date for Schedules 1 and 2
in the Bill is in the past, it is noted that because of the drafting of the
transitional provisions this may not have the effect of adversely affecting
anyone’s interests.
The transitional provisions generally state that the old
provisions will apply to children born before 1 July 2020 and that the new
provisions will apply to children born on or after that date.[73]
Item 3 of Schedule 2 sets out a number of
items in the Bill that will not apply to parents whose children are born before
1 July 2020 to ensure that they will continue to receive the full benefit of
the current legislative regime.
This is because an unintended consequence of the changes
in the Bill could have been that the parents of children born before 1 July
2020 were adversely affected by the changes. This could have occurred because
their entitlement to PLP would have been truncated by the operation of items
40 and 77 of Schedule 1, which cap the maximum PPL period at 12
weeks and do not allow flexible PPL payments for children born before 1 July
2020. The effect of this could have been that some parents in certain
circumstances may have only been entitled to a total of 12 weeks PLP.
[1]. Australian
Government, Greater
choice for Australian women: Women's Economic Security Statement 2018,
Department of the Prime Minister and Cabinet (PM&C), Canberra, 2018, p. 22.
J Frydenberg (Treasurer) and M Cormann (Minister for Finance), Mid-year
economic and fiscal outlook 2018–19, 2018, p. 8.
[2]. E
McCarthy, E Jenkin and A Stewart, Parental leave: a user-friendly guide,
Thomson Reuters, Pyrmont, 2012, p. 2.
[3]. Fair Work Act 2009,
section 71.
[4]. The
employer may only refuse the request on ‘reasonable business grounds’ Fair
Work Act 2009 (Cth), s 76(4).
[5]. Those
not covered include state and local government employees (unless their employer
has a registered agreement in the national system) and many employees in
Western Australia. See: Fair Work Ombudsman (FWO), ‘The
Fair Work system’, FWO website, n.d.
[6]. Fair Work Act 2009,
subsection 71(2) and 72(2).
[7]. A
Tudge, ‘Second
reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’,
House of Representatives, Debates, 6 February 2020, p. 449.
[8]. Fair
Work Commission (FWC), ‘National
minimum wage orders’, FWC website, last updated 27 June 2019; subsections
63(1) and 65(1) of the Paid Parental Leave Act 2010.
[9]. Department
of Social Services (DSS), Annual
report 2018–19, DSS, Canberra, 2019, pp. 47 and 62.
[10]. There
are some exceptions and additions to the core requirements. These are detailed
in the DSS Paid Parental Leave guide (PLP guide): ‘2.2.1 PLP
eligibility overview’, Paid Parental Leave guide, DSS website, 1
July 2019.
[11]. DSS,
‘2.2.2.10
When a person satisfies the work test for PLP’, PLP guide, DSS
website, 2 January 2020.
[12]. DSS,
‘2.2.2.20
Work test for PLP’, PLP guide, DSS website, 2 January 2020.
[13]. DSS,
‘2.2.3 PLP scheme
income test for PLP’, PLP guide, DSS website, 1 July 2019.
[14]. J
Macklin, ‘Second
reading speech: Paid Parental Leave Bill 2010’, House of Representatives, Debates,
12 May 2010, p. 3207.
[15]. DSS,
‘2.2.4.10
Australian residency test for PLP’, PLP guide, DSS website, 20 March
2019.
[16]. Centrelink,
Paid
Parental Leave scheme employer toolkit, Department of Human Services,
as at October 2017, p. 6.
[17]. Services
Australia (SA), ‘Getting
your payment’, SA website, 16 September 2019.
[18]. McCarthy
et al, p. 38.
[19]. FWO,
‘Maternity
and parental leave’, FWO website, n.d.
[20]. Fair Work Act 2009,
section 67.
[21]. FWO,
Parental
leave and related entitlements and the National Employment Standards,
FWO, July 2017.
[22]. Ibid.
[23]. Fair Work Act 2009,
subsection 71(2) and 72(2).
[24]. However,
a period of unpaid leave can include up to 10 ‘keeping in touch days’ where an
employee can attend work for activities such as planning days, training and
conferences (section 79A). See: FWO, ‘Keeping
in touch days’, FWO website, n.d.
[25]. Australian
Government, Greater
choice for Australian women: Women's Economic Security Statement 2018,
op. cit., p. 22.
[26]. A
Tudge, ‘Second
reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’,
op. cit., p. 449.
[27]. Explanatory
Memorandum, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020,
p. 3.
[28]. Australian
Government, Greater
choice for Australian women, op. cit., p. 22.
[29]. S
Lane, ‘Interview
with Kelly O’Dwyer’, ABC AM, transcript, Australian Broadcasting
Commission (ABC), 20 November 2018.
[30]. Senate
Community Affairs Legislation Committee, Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, The Senate,
Canberra.
[31]. Senate
Community Affairs Legislation Committee, Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020 [Provisions],
The Senate, Canberra, March 2020, p. 15.
[32]. Ibid.,
pp. 19 and 21.
[33]. Ibid.,
p. 14.
[34]. Ibid.,
pp. 18–19.
[35]. Ibid.,
p. 21.
[36]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 2, 2020, The Senate, Canberra, 12 February 2020, p. 5.
Parliamentary Joint Committee on Human Rights, Scrutiny
report, 2, 2020, February 2020, p. 9.
[37]. L
Burney, ‘Second
reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’,
House of Representatives, Debates, 13 February 2020, p. 1198.
[38]. A
Bandt, ‘Second
reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’,
House of Representatives, Debates, 25 February 2020, p. 1650.
[39]. Senate
Community Affairs Legislation Committee, Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020 [Provisions],
op. cit., p. 21.
[40]. H
Haines, ‘Second
reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’,
House of Representatives, Debates, 25 February 2020, p. 1647.
[41]. Z
Steggall, ‘Second
reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’,
House of Representatives, Debates, 25 February 2020, p. 1653.
[42]. Senate
Community Affairs Legislation Committee, ‘Submissions’,
Paid Parental Leave Amendment (Flexibility Measures) Bill 2020.
[43]. K
Jenkins, (Sex Discrimination Commissioner), Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, 12 March
2020, p. 1.
[44]. Australian
Association of Social Workers, Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020,
p. 4.
[45]. For
example, Australian Council of Trade Unions (ACTU), Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020,
p. 2; Queensland Nurses and Midwives' Union (QNMW), Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020,
p. 4.
[46]. For
example, National Foundation for Australian Women (NFAW),Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020,
p. 2.
[47]. For
example, Shop, Distributive and Allied Employees' Association (SDA), Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020,
p. 15.
[48]. For
example, Diversity Council of Australia (DCA),Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020,
p. 6.
[49]. Australian
Council of Trade Unions (ACTU),Submission
to Senate Community Affairs Legislation Committee, Inquiry into the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020,
p. 2.
[50]. Explanatory
Memorandum, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020,
p. 4.
[51]. The
Statement of Compatibility with Human Rights can be found at page 53 of the
Explanatory Memorandum to the Bill.
[52]. Parliamentary
Joint Committee on Human Rights, Scrutiny
report, 2, 2020, 12 February 2020, p. 9.
[53]. Proposed
subsection 84(2A) of the Paid Parental Leave
Act 2010 (the Act) at item 147 of Schedule 1 to the Paid
Parental Leave Amendment (Flexibility Measures) Bill 2020.
[54]. See
current Part 3-2, Paid Parental Leave Act 2010.
[55]. Explanatory
Memorandum, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020,
p. 2.
[56]. Paid
Parental Leave Act, section 75.
[57]. For
example, “compliance notice: see subsection 157(3)”.
[58]. Paid
Parental Leave Act, subsection 54(1).
[59]. Paid
Parental Leave Act, subsection 54(2).
[60]. Paid
Parental Leave Act, subsection 54(3).
[61]. Paid Parental Leave
Rules 2010, clause 2.20.
[62]. Proposed
subsection 6A(4)(b)(ii) of the Act.
[63]. These
tests are already listed in section 31 of the current Act.
[64]. A
secondary claim is a claim made by a secondary claimant, typically the partner
of the primary claimant.
[65]. The
Full Court of the Federal Court of Australia in Beadle v Director-General of
Social Security (unreported
version, Federal Court of Australia, Bowen CJ, Fisher and Lockhart JJ, 7 June
1985), (1985) 60 ALR 225, said ‘It would depend
upon the circumstances of the particular case
whether these constituted special circumstances.
We do not think it is possible to lay down precise limits or precise rules’.
[66]. Paid
Parental Leave Act, section 63.
[67]. Ibid.,
section 71 and the following sections describe the relevant circumstances.
[68]. Explanatory
Memorandum, op. cit., p. 2.
[69]. Explanatory
Memorandum, op. cit., p. 48.
[70]. Ibid.,
pp. 44–45.
[71]. Proposed
subsection 108(1B).
[72]. Proposed
subsection 108(1C).
[73]. Explanatory
Memorandum, op. cit., p. 50.
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