PAID PARENTAL LEAVE – How Much and Who Pays?

By Amy Lyden

9 February 2012 | No Comments

working mum with bottle and briefcaseWith the Coalition introducing amendments to the Paid Parental Leave scheme (PPL) this week, the Minister for Small Business Mark Arbib and Minister for Families, Community Services and Indigenous Affairs, Jenny Macklin, put out a media release this week condemning the proposed PPL changes.

Senator Arbib describes the PPL as a tax on business that will have a detrimental affect on small businesses, particularly small retailers.

Before we look at the Coalition’s proposed PPL, let’s review the current PPL which came into place January 2011:

  • 18 weeks paid parental leave at federal minimum wage (approx. $570/week)
  • no superannuation paid
  • must have worked for a least 10 of the 13 months prior to birth or adoption of child
  • must have worked for at least 330 hours in that 10 month period with no more than an eight week gap between two consecutive working days
  • fully funded by the government
  • administered by businesses (meaning that businesses will pay directly to PPL recipient)

The Coalition’s gripe with the existing scheme is that it is a burden to businesses to administer.

Also, 18 weeks at minimum wage and no superannuation (approx. $10,000) is not going to make a big difference to many families.

Let’s now examine the Coalition’s proposed PPL, which was released in 2010:

  • 26 weeks paid parental leave at FULL salary up to $150,000 per annum
  • including superannuation of 9%
  • utilising the same work test and eligibility conditions as the current PPL
  • be funded by a 1.5% levy on companies with taxable’s incomes OVER $5 million
  • be paid and administered by the Family Assistance Office (not by the employer as is currently in place with the government’s PPL)

This is certainly a more generous scheme, with less red tape for businesses. Businesses with a taxable income over $5 million will fund the scheme. Smaller businesses will not be affected.

Yes, this PPL scheme will cost more.

But it will help support families better than the existing paid parental leave scheme.

It also acknowledges the importance of superannuation, which for many women is just simply not enough to retire on.

The bottom line is that if we want more women to participate in Australia’s workforce, we MUST provide workable solutions to help them manage as they have and adopt children. This WILL cost money. But the overall benefits to Australia economically and socially will by far outweigh the dollars spent.

What do you think?

Amy Lyden


Amy Lyden

Amy Lyden

An entrepreneur and specialist in ecommerce and online strategy, Amy has had over 13 years of practical experience in these areas. Launching her first website in 1998 Amy was at the forefront of an online revolution without even realising it. Within a year this site became and remains today a #1 ra...

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