On 29 March 2022 Federal treasurer Josh Frydenberg announced that the Morrison Government’s (the Government) 2022 budget (the Federal Budget) would be extending Paid Parental Leave (PPL) to support new parents. Mr Frydenberg revealed that the government was engaging with key stakeholders in amending the National Employment Standards (NES) to boost redundancy payouts to women and to extend unpaid leave entitlements to foster and kinship carers.
The Government has promised to provide $346.1 million over 5 years from 2021-22 to improve economic security for women by enhancing the PPL scheme. The purpose of the change is to protect women who are the primary earner and do not currently have access to employer-funded PPL. As it stands, the government will provide the primary carer of a new baby up to 18 weeks leave paid at the minimum wage and their partner can receive two weeks of payment. The mother of the child must have an income of less than $150,000 to be eligible for government PPL.
Under the proposed scheme, new parents will be able to choose how they split their 20 weeks of PPL. The PPL Scheme would enable parents to take leave at any time within 2 years of the birth or adoption of a child and the threshold would be expanded from $150,000 (mother’s income) to a household income of $350,000 per annum. The government has estimated that nearly 2,200 more families will become eligible when the changes are enacted.
To combat the low numbers of men going on parental leave, the Government has announced that fathers will be able to take government PPL in conjunction with employer-funded leave. All singles will also be entitled to the full 20-weeks of PPL. In the 2021 financial year less than 90,000 fathers used the two weeks of Dad and Partner Pay. Of those using Government PPL and accessing employer funded schemes, 99.5% for the former and 88% for the latter were women. The Government believes that the proposed changes will give families more of a choice in who cares for the baby.
A proposal to amend the NES was also put forward in the Federal Budget. The proposed amendment relates specifically to boosting of redundancy payouts for women. IR Minister Michaelia Cash said that the changes would “ensure fairness and equity in redundancy payments more fairly reflect average working hours over the course of a person’s employment”. Amendments to redundancy calculation methods under the National Employment Standards in the Fair Work Act 2009 (Cth) would ensure that redundancy payments more accurately reflect average working hours over the course of a person’s employment, the Government has claimed. As at publication, the Government is yet to implement any changes to the NES and is “consulting with key stakeholders” according to the minister. The proposal also features extra unpaid leave entitlements which may be implemented to foster and kinship carers to “recognise the contribution foster and kinship carers make to vulnerable children”.
If you have any questions about how the Federal Budget may affect your employment, do not hesitate to contact Nick Stevens, Daphne Klianis or Josh Hoggett.