Paid Parental Leave Bill
9 Feb | '2023
The question is, of course: does the coalition support this bill, the Paid Parental Amendment (Improvements for Families and Gender Equality) Bill 2022? And the answer is yes. We’ve heard from many in the coalition about their support for this very important measure. There are a few reasons for that. Primarily, the coalition supports measures that support families, especially young families and those with young children. The coalition believes in the family as the building block of society and believes passionately that, when families do well and small and family business does well, communities do well and regions and cities do well, and then so too does our great country. This is a core value of the Liberals and the Nationals.
That’s why we also supported the Family Assistance Legislation Amendment (Cheaper Child Care) Bill 2022, which passed through this place late last year. We of course took the opportunity to outline the deep flaws in that bill, which is one of the privileges of being in opposition. Those flaws included the lack of new access—places for children—for the $4.7 billion price tag to the Australian taxpayer, and the utterly disgraceful lack of detail and lack of work done by the Labor government to support a tired and undervalued workforce that has real concerns now about the government’s lack of preparedness for 1 July this year.
That’s why we are so bitterly disappointed with the Prime Minister and the Labor Party for misleading Australians by promising, before the election, to support families. ‘Life will be cheaper under me,’ he said. ‘There will be a $275 reduction in power bills,’ he said. But—newsflash—it’s not, is it? Who can put their hand on their heart and say, ‘My life is cheaper now than it was in May last year, under the coalition? Nobody. Inflation is at a 33-year high, and that’s not bad luck. That’s Labor, as they always do when in government, making the situation worse for families and the cost of living. Higher interest rates are predicted to hit approximately 800,000 mortgage holders who will come off fixed-rate mortgages to virtually double their payments under a variable rate—and that will go up further. It’s an economic hot mess. Make no bones about it: every decision this Labor government is making will impact cost-of-living expenses and so inflation. Life is not and will not be easier under Albanese.
But, importantly, this bill extends the Paid Parental Leave scheme, or PPL measures, that the coalition put in place in March last year—another one of our good policy ideas that Labor has taken and added to. It gives both parents more paid time with their newborns to build their family unit. The scheme consists of parental leave pay, PLP, a 12-week PPL period and six weeks of flexible PPL, and dad and partner pay, DAPP, a two-week period. Financial support provided by PPL is intended to complement and supplement existing entitlements to paid or unpaid leave and is paid at a rate based on the national minimum wage, which is currently $812.45 a week. In 2021 and 2022 the PPL schemes together cost the nation around $2.58 billion.
I’ll just go through some of the rules, for those who might be listening at home on the ABC. There are some rules surrounding eligibility. Currently there is a work test, and the claimant must have worked for 10 of the 13 months before the birth or adoption of their child, with a minimum of 330 hours in that 10-month period, and have a gap of no more than 12 weeks between working days. There is also an income test. The claimant must have an individual adjusted taxable income, ATI, of $150,000 or less in the 2019-20 financial year, or $151,350 or less in the 2020-21 financial year, or $156,647 or less in the 2021-22 financial year. There is also a residency test. When their child is born or adopted, they must be living in Australia and have one of the following: Australian citizenship, a permanent visa, a special category visa or another temporary approved visa.
This bill makes amendments to the Paid Parental Leave Act which the government says will make the payment more accessible, flexible and gender neutral. The bill provides amendments to extend PLP from 18 weeks to 20 weeks from 1 July. It will combine the PLP and DAPP, forming a single payment of 20 weeks that can be shared between parents, making that easier. This measure seeks to make the sharing of parental leave between parents a central part of the scheme. Two weeks of PLP will be reserved on a ‘use it or lose it’ basis for each claimant. A claimant who does not have a partner at the time of the claim will be able to receive a maximum of 20 weeks PLP.
It also removes the notion of primary, secondary and tertiary claimants. Under the amendments, either parent will be able to claim the PLP first, and the bill seeks to improve gender equality by removing the default of PLP assuming that birth parents are the primary carers. Currently the Paid Parental Leave Act distinguishes between primary, secondary and tertiary claims and claimants. This bill removes this distinction by allowing fathers and partners to claim parental leave pay without requiring birth mothers to make claims.
Under the current arrangements, a mother must make a successful claim for PPL and then transfer the payment to her partner if she wishes to share it. This process is administratively burdensome and complex, with less than one per cent of mothers transferring some of their payment to fathers or partners in 2021. An eligible non-birth parent or partner can receive the PLP if a birth parent doesn’t meet the income test or residency test or is serving a newly arrived resident’s waiting period.
The bill expands access by introducing a $350,000 income test. To put that into context, between the 2010 and 2017 financial years the number of women with a taxable income of more than $150,000 has in fact doubled. I might point to the woman’s workforce participation rate at the time, which was at an historic high of 62.3 per cent under the coalition government, and I remind those in the House that when Labor last left office it was at 58.7 per cent. We’ll see how that women’s workforce participation rate goes over the coming months and years. Currently families can be treated differently depending on which parent has the higher income. There could be two families, each with an identical household income, one of which is eligible because the father is the primary income earner while the other is ineligible because the mother is the primary income earner. The bill addresses this issue by introducing a $350,000 family income limit against which families can be assessed if they do not meet the individual income test, which is $156,647.
A family will no longer be denied access to payments just because of the income of the mother, with the introduction of a family income limit. It’s expected that nearly 3,000 additional parents will become eligible each year due to this measure. This family income limit is to be indexed annually from 1 July 2024, and the individual income limit will continue to be indexed annually on 1 July. This is to complement the existing $156,647 individual income test, with single parents able to access their family income test.
It increases flexibility and expands eligibility to allow claimants to best use their parental leave payments in the manner that best suits them and their family. Paid parental leave will consist only of flexible PPL days. This measure allows parents to take paid parental leave in blocks as small as a day at a time, with periods of work in between if they need them, during the period starting on the day the child is born and ending on the day before the child’s second birthday or anniversary of care. This flexibility seeks to support mothers to return to work whenever they wish and will benefit parents who work part time or are self-employed and wish to continue working after a birth or an adoption.
The bill also allows eligible claimants to take a maximum of two weeks parental leave pay concurrently, assisting parents to share caring responsibilities and also providing an opportunity for dads and partners to provide care for birth parents, supporting their health. Concurrency is limited to ensure that parents are encouraged to return to work. This bill also expands eligibility to allow an eligible father or partner to receive parental leave pay regardless of whether the birth mother meets the income tax or residency requirements or is serving a newly arrived resident’s waiting period, as I outlined.
This bill extends the paid parental leave from 18 weeks to 20 weeks. It supports parents and children, therefore the coalition supports the extension to our measures contained in this bill, and I congratulate Labor for finally coming to the party on this very important measure for Australian families.