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2008-2009-2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PAID PARENTAL LEAVE BILL 2010
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Minister for Families, Housing, Community Services and Indigenous Affairs,
the Hon Jenny Macklin MP)
PAID PARENTAL LEAVE BILL 2010
OUTLINE
This bill introduces Australia's first national, Government-funded Paid
Parental Leave scheme (the scheme) from 1 January 2011. Parental leave pay
of up to 18 weeks at the national minimum wage will be paid to eligible
primary carers who have or adopt a child on or after 1 January 2011 and who
can satisfy work, income and residency tests. In most cases, the mother
will be the primary carer, but allowance is also made for transfers of all
or part of the payment to the other parent, or to another carer, in
exceptional circumstances.
From 1 October 2010, parental leave pay may be claimed through the Family
Assistance Office, along with other family assistance payments, up to three
months before the birth or adoption. The Government will fund employers to
pay their eligible long-term employees as part of the scheme.
The participation of employers in the scheme is being phased in. Employers
may opt to provide any eligible employee with parental leave pay from
1 January 2011. The requirement for employers to pay parental leave pay to
their employees will take effect from 1 July 2011. Eligible claimants who
are not paid by their employers will be paid by the Family Assistance
Office.
This bill also contains integrity provisions, such as compliance rules for
employers and right of review for employees to ensure that parental leave
pay is paid to eligible parents in a timely manner. Any delays, disputes
or debts that may arise in the payment process will be managed
appropriately by the Family Assistance Office and the Fair Work Ombudsman.
Other family payments such as the baby bonus and family tax benefit will
remain available for families not eligible for the scheme, and for those
who choose not to participate in the scheme. An eligible parent could also
receive family tax benefit Part A while participating in the scheme.
This bill is part of a package of bills which includes consequential
amendments to related legislation, including family assistance, income tax
and child support.
Financial impact statement
The Paid Parental Leave scheme will have a net cost to the Government of
$1.042 billion ($1,042.4 million) over five years.
Total net cost
|2009-10 |2010-11 |2011-12 |2012-13 |2013-14 |
|$13.6 m |$196.7 m |$269.8 m |$279.0 m |$283.3 m |
REGULATION IMPACT STATEMENT
The regulation impact statement appears at the end of this explanatory
memorandum.
PAID PARENTAL LEAVE BILL 2010
NOTES ON CLAUSES
Abbreviations used in this explanatory memorandum
. 'Child Support Registration and Collection Act' means the Child
Support (Registration and Collection) Act 1988;
. 'Fair Work Act' means the Fair Work Act 2009;
. 'Legislative Instruments Act' means the Legislative Instruments
Act 2003; and
. 'Privacy Act' means the Privacy Act 1988.
Background
Overview of the Paid Parental Leave scheme
This bill introduces a Paid Parental Leave scheme (the scheme) for parents
who are primary carers of a child born or adopted on or after 1 January
2011. The scheme will be funded by the Government and is the culmination
of over two years of policy development and public consultation to develop
a scheme to respond to Australia's social and economic circumstances. The
scheme will provide working mothers, and the initial primary carers of
adopted children, 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.
Parental leave pay will complement parents' entitlements to unpaid leave
such as unpaid parental leave under the National Employment Standards. It
can be received before, after, or at the same time as existing entitlements
such as employer-provided paid leave such as recreation, annual and
employer-provided maternity leave.
Parents will be able to lodge their claims up to three months prior to the
expected date of the birth or adoption. Families will be able choose
whether to participate in the scheme depending on their individual
circumstances.
Families electing to participate in the scheme will not receive baby bonus
(except in multiple birth cases) or family tax benefit Part B while they
are receiving parental leave pay. The dependent spouse, child housekeeper
and housekeeper tax offsets also will not be available during this period.
Interactions between the new and existing entitlements, such as the matters
described here, will generally be covered by consequential amendments to be
introduced in separate bills.
Eligibility
To be eligible for parental leave pay, claimants will need to meet the work
test, income test and residency requirements. A primary claimant parent
will not be able to work from the date of birth until ceasing to receive
parental leave pay, but may 'keep in touch' with the workplace for up to 10
days during this period while receiving parental leave pay.
To be eligible for the payment, the primary carer (usually the mother) must
have:
. been engaged in work for a total period spanning at least 10 of the
13 months prior to the expected birth or adoption of the child with a
break of no greater than eight weeks between any two consecutive work
days; and
. have undertaken at least 330 hours of paid work during the 10-month
period (an average of around one day of paid work a week).
An income limit of $150,000 (indexed in line with the baby bonus) will
apply based on the primary carer's adjusted taxable income in the previous
full financial year before the claim or birth, whichever is the earlier.
Parents generally will need to be living in Australia and an Australian
citizen or resident from the date of birth of the child and remain so for
the parental leave pay period.
Full-time and part-time employees, as well as casual workers, contractors
and the self-employed, may be eligible.
If a primary carer returns to work before they have received all of their
parental leave pay entitlement, the person's partner (usually the father)
may receive the unused part of their parental leave pay, provided the
partner meets the eligibility criteria and is the primary carer of the
child.
People may become eligible in exceptional circumstances, where the mother
or both parents are unable to care for the baby, based upon criteria
prescribed by subordinate legislation, the PPL rules.
Level and period of pay
Eligible working mothers will receive parental leave pay for up to 18 weeks
at the national minimum wage, which is currently $543.78 a week. In most
cases, the person will receive the payment through their employer and it
will be taxable, like salary and wages. The only other deductions allowed
from parental leave pay will be for child support obligations and
deductions authorised by the recipient.
Parents can nominate the period over which they wish to receive their
parental leave pay. The start date cannot be before the child's birth or
date of placement for adoption. Parental leave pay must be taken in one
continuous 18 week period. All of the parental leave pay must be received
before the child's first birthday, or within 12 months of the date of
placement for adoption.
How will parental leave pay be paid?
In most cases, parental leave pay will be paid by the employer. The role
of employers is being phased in over the first six months of the scheme, to
help employers transition to the new arrangements. Employers can choose to
provide parental leave pay to their employees from the commencement of the
scheme with their employees' agreement. Employers may be required to
provide parental leave pay to eligible employees from 1 July 2011.
Employers will only be required to pay their long-term employees, that is,
people who will have been their employee for 12 months or more prior to the
expected date of birth or placement in the case of adoption, or the actual
date of birth or placement, depending on when the claim is made.
In other cases, the Family Assistance Office will make the payment directly
to the parent.
How will Paid Parental Leave funding be provided to employers to enable
them to pay eligible employees?
The Family Assistance Office will advise an employer if they are required
to provide parental leave pay to an employee. Employers will have a right
of review of the decision that they pay parental leave pay.
Paid Parental Leave funding will be provided to employers before the
employer is required to pay their employee. There will be no obligation on
employers to provide parental leave pay to their employees until they have
received a sufficient funding amount from the Family Assistance Office.
Funding amounts will be paid to employers before the cut-off day for any
changes to an employee's pay for that pay period.
Parental leave pay will be funded by the Australian Government out of
Consolidated Revenue. It is expected that the cost of the scheme will be
offset by increases in tax revenue and by reductions in baby bonus and
family tax benefit Part B outlays and tax offsets for people receiving
parental leave pay.
Chapter 1 - Introduction
Part 1-1 - Introduction
Division 1 - Preliminary
Clause 1 - Short title
This clause sets out how the new Act is to be cited, that is, as the Paid
Parental Leave Act 2010.
Clause 2 - Commencement
This clause provides that the new Act will commence on 1 October 2010.
Clause 3 - Act binds the Crown
This clause states that the new Act binds the Crown in each of its
capacities.
However, the new Act does not make the Crown liable for an offence. This
does not prevent the Crown from being ordered to pay a pecuniary penalty
for contravention of a civil penalty provision (new section 147 refers) or
to pay a pecuniary penalty under an infringement notice (new section 159
refers).
Division 2 - Guide to this Act
Clause 4 - Guide to this Act
This clause provides a Guide to the new Act. It sets out the broad
structure of the Act and a summary of how the Paid Parental Leave scheme
works.
Part 1-2 - Definitions
Division 1 - Guide to this Part
Clause 5 - Guide to this Part
This clause gives the reader a brief outline of the matters dealt with in
Part 1-2. Part 1-2 is about the terms used in the new Act and provides a
Dictionary of those terms. The terms are either defined in the Dictionary
or the Dictionary provides a signpost to the provision that defines the
term.
Division 2 - The Dictionary
Clause 6 - The Dictionary
This clause defines the terms that are used in the new Act. In this
explanatory memorandum, the defined terms will be addressed in the context
in which they appear.
Chapter 2 - When parental leave pay is payable to a person
Background
This Chapter sets out when parental leave pay is payable to a person. If a
person makes an effective claim for parental leave pay, meets the required
eligibility criteria, and meets various other criteria (including verifying
and, if required, demonstrating that they have sought registration of the
child's birth), the Secretary may make a payability determination that
parental leave pay is payable to the person. If the Secretary is not
satisfied that the person meets the eligibility criteria, the Secretary
will make a payability determination that parental leave pay is not payable
to the person. A determination that parental leave pay is payable will
establish the period for which parental leave pay is payable. Whether
parental leave pay is to be paid to the person by the person's employer or
by the Secretary is dealt with in Chapter 3.
This Chapter sets out how an effective claim for parental leave pay is
made, and how the Secretary will determine the claim in both normal and
exceptional circumstances. It covers the eligibility criteria and
situations in which parental leave pay is to be shared between the primary
claimant and partner, as a secondary claimant, or, in exceptional
circumstances, with a subsequent claimant. Claims for parental leave pay
by adoptive parents are also included. More unusual cases of claims for
parental leave pay by people other than a child's birth mother, and sharing
of the parental leave pay with someone other than the birth mother's
partner, will generally be dealt with under legislative instruments
subordinate to the Act, known as the PPL rules.
Critical to the determination provisions is whether or not a particular
claimant is a primary claimant, secondary or tertiary claimant for parental
leave pay for a particular child. The primary claimant's claim will
generally be the first claim for parental leave pay for the child, and will
generally be made by the child's birth mother or adoptive parent. If a
determination is made that parental leave pay is payable to the primary
claimant, and then care arrangements for the child change such that the
primary claimant is not able to be paid the full 18 weeks of parental leave
pay for the child, a secondary claimant may claim and a determination may
be made that the balance of the 18 weeks' parental leave pay under the
primary claim to which the secondary claim relates is payable to the
secondary claimant.
A secondary claim relates to a particular primary claim by virtue of
claiming eligibility for a period of time that would otherwise be, or fall
within, the 18 week period of parental leave pay established by the primary
claim. In exceptional circumstances, a tertiary claim may relate to a
particular primary and secondary claim by claiming eligibility in relation
to a period of time within the 18 weeks that remains after other claimants
have been paid.
Part 2-1 - Key provisions
Division 1 - Guide to this Part
This new Division sets out a Guide to this Part.
Division 2 - When parental leave pay is payable to a person
Clause 8 - A determination must be made for parental leave pay to be
payable to a person
Clause 9 - For the determination to be made, the person must be eligible
Clause 10 - For the determination to be made, the person must claim
Clause 11 - The determination must specify the person's PPL period
Clause 8 provides that parental leave pay is payable to a person for a
child for a period if a determination of the Secretary that parental leave
pay is payable to the person for that period is in force under new section
13, 14, 15, 16 or 17. The determination cannot be made unless the person
is eligible for parental leave pay during the period (clause 9).
(Eligibility for parental leave pay is dealt with at Division 2 - when a
person is eligible for parental leave pay.) New sections 13, 14, 15, 16
and 17 also provide for a determination to be made by the Secretary that
parental leave pay is not payable.
The period for which parental leave pay is payable must be specified in the
determination. This period is set under clause 11. That period is the
person's PPL period. The person's PPL period must be the same as, or
inside, the maximum PPL period for the child (subclause (2)). The maximum
PPL period for the child is established by the primary claimant claim for
parental leave pay for the child. The maximum PPL period for a child is
the period that starts on the maximum PPL period start day, and ends on the
maximum PPL period end day (subclause (3)).
In order for the determination to be made, the person must make a claim for
parental leave pay (clause 10). If the person has made an effective
primary claim for the child, the person is the primary claimant (paragraph
(a)). If the person makes an effective secondary claim for the child, the
person is the secondary claimant (paragraph (b)). If the person makes an
effective tertiary claim for the child, the person is the tertiary claimant
(paragraph (c)). 'Primary claim', 'secondary claim' and 'tertiary claim'
are all defined in the Dictionary by reference to new section 53.
Similarly, 'primary claimant', 'secondary claimant' and 'tertiary claimant'
are defined in the Dictionary in each case as a person who has made an
effective claim of that type for parental leave pay for a child.
New Division 2 of Part 2-4 deals with claims for parental leave pay, and
when they are effective. It requires that, to be effective, a primary
claim nominate a start date (see sections 55 and 57). As a result, only a
primary claim can establish a maximum PPL period for a child, such that
amounts of parental leave pay may potentially be available to the primary,
and subsequent secondary or tertiary, claimants.
The maximum PPL period start day for a child is defined by subclause 11(4).
The start day, and whether the claimant's nominated start date will have
effect depends upon whether or not various things have happened by the day
that is 28 days after the birth of the child (the 'relevant day'). If both
an effective primary claimant claim was made and the child's birth was
verified by the primary claimant on or before the relevant day, the start
day can be the date of the child's birth, or a later date nominated by the
primary claimant. If the claim is made before the relevant day, but the
child's birth is not verified by this day, the earliest start day available
is the date upon which the birth was verified. If the claimant has
nominated a start date that is after the date the birth was verified, then
the start day will be the nominated date. If the claim is made after the
relevant day, then the start day can be no earlier than the date of claim.
If the claimant has nominated a start date that is later than the date of
claim, then this date can have effect as the start day.
The maximum PPL period end day for a child (subclause 11(5)) depends upon
whether there are 125 days remaining after the maximum PPL period start day
before the child's first birthday (which is 18 weeks from that start day,
once the start day is included). If there are 125 days remaining, then the
end day will be the day that is 125 days after the start day, that is, the
full 18 weeks. If not, the maximum PPL period will end on the day before
the child's first birthday. In this case, a full 18 weeks of parental
leave pay cannot be paid to the claimant.
Part 2-2 - Determinations about whether parental leave pay
is payable to a person
Division 1 - Guide to this Part
Clause 12 - Guide to this Part
Clause 12 sets out a guide to this Part.
Division 2 - Determinations about whether parental leave pay is payable to
a person
This new Division provides for determinations to be made on claims,
depending upon whether they are a primary, secondary or tertiary claim, and
depending upon whether the claim is a primary claim made at the same time
as a secondary claim. A determination under this new Division that
parental leave pay is payable to a claimant will set the PPL period for
that claimant. Parental leave pay may then be paid to the claimant for the
days in their PPL period either by their employer, or by the Secretary,
under new Chapter 3.
Determinations that parental leave pay is not payable are also made under
these provisions.
Notes to each section refer the reader to new Division 3, which may prevent
the Secretary from making a determination until additional matters are
satisfied.
Clause 13 - Determination on a primary claim made alone
Clause 13 deals with determinations on a primary claim made alone.
Subclause (1) provides that the Secretary must make a determination under
this section if a primary claimant has made an effective primary claim for
parental leave pay for a child and another person has not made an effective
secondary claim for parental leave pay for the child at the same time.
Under subclause (2), if the Secretary is satisfied that the primary
claimant was or will be eligible for parental leave pay for each day in the
period that starts on the day the child was born, and ends on the last day
of the primary claimant's PPL period, then the Secretary must determine
that parental leave pay is payable to the primary claimant for this period.
If the Secretary is not satisfied that the primary claimant was or will be
eligible for each day from the child's birth until the start of the maximum
PPL period for the child, then the Secretary must determine that parental
leave pay is not payable to the primary claimant (subclause 13(4)). If the
Secretary is satisfied that the primary claimant will be eligible from
birth until at least the start day of the maximum PPL period for the child,
then the Secretary must specify the primary claimant's PPL period under
subclause 13(3).
The primary claimant's PPL period must start on the maximum PPL period
start day for the child (for 'maximum PPL period start day' see new
subsection 11(4)). The Secretary must then specify that the primary
claimant's PPL period will end on the last day of the child's maximum PPL
period, if the Secretary is satisfied that the primary claimant was or will
be eligible for parental leave pay on each day in that period. If not
satisfied, the Secretary must specify a period that is shorter than the
child's maximum PPL period, ending on the last day in the child's maximum
PPL period that the primary claimant was or will be eligible for parental
leave pay for the child.
Clause 14 - Determination on primary and secondary claims made jointly -
claimants sharing parental leave pay
Clause 14 deals with determinations on primary and secondary claims made
jointly, where the claimants are to share parental leave pay. It applies
(subclause 14(1)) where a primary claimant has made an effective primary
claim and a secondary claimant has made an effective secondary claim at the
same time, and the primary claimant has requested that parental leave pay
that is or may be payable for the child be shared between the primary
claimant and the secondary claimant. In this case, the Secretary must
determine the primary claim and the secondary claim under this clause.
First, the Secretary must make a determination in relation to the primary
claimant's claim. The Secretary must determine that parental leave pay is
payable to the primary claimant (subclause 14(2)), if the Secretary is
satisfied that the primary claimant was or will be eligible for parental
leave pay on each day in the period that starts the day the child was born
and ends on the last day of the primary claimant's PPL period. The
Secretary will do this by applying the same approach as set out above at
new section 13.
However, in the case of a primary and secondary claim made jointly, the
Secretary will have been advised the date from which the secondary claimant
will take over the primary care of the child and start being eligible for
parental leave pay. If this occurs, the primary claimant will cease to be
eligible for parental leave pay on that day. If the Secretary is satisfied
that the primary claimant will cease to be eligible on a particular day,
the Secretary must determine that the primary claimant's PPL period ends on
the last day on which the primary claimant will be eligible for parental
leave pay (subclause 14(3)).
Provided the Secretary has made a determination that parental leave pay is
payable to the primary claimant, the Secretary will then consider the
eligibility of the secondary claimant. It cannot be determined that
parental leave pay is payable to the secondary claimant if it has not
previously been determined that parental leave pay is payable to the
primary claimant. In order to be eligible as a secondary claimant, the
secondary claimant must be eligible on each day in their PPL period, which
must start on the first day after the end of the primary claimant's PPL
period (subclause 14(6)). This ensures that parental leave payments for a
child are paid in an unbroken block of up to 18 weeks.
If the Secretary is satisfied that the secondary claimant was or will be
eligible for parental leave pay for the child on each day that remains in
the child's maximum PPL period, the end day of the secondary claimant's PPL
period is the maximum PPL period end day. Otherwise, the end day of the
secondary claimant's PPL period is the last day in the maximum PPL period
for the child that the Secretary is satisfied that the secondary claimant
was or will be eligible for parental leave pay for the child (subclause
14(6)).
For both the primary and secondary claimant, the Secretary must determine
that parental leave pay is not payable if the Secretary is not satisfied of
their eligibility as set out above (subclauses 14(4) and (7)).
Clause 15 - Determination on primary and secondary claims made jointly -
secondary claimant to get all the parental leave pay
Clause 15 applies where the primary claimant and secondary claimant seek
payment of all 18 weeks of parental leave pay to the secondary claimant,
that is, the primary claimant is to receive nothing. The primary claimant
must still have made a primary claim for parental leave pay for the child,
but will have requested, in the claim, that the full amount of parental
leave pay that is or may be payable for the child be paid to the secondary
claimant (subclause 15(1)). Because of this, the Secretary must first
determine that parental leave pay is not payable to the primary claimant.
However, the Secretary must be satisfied of some particular aspects of the
primary claimant's eligibility before the Secretary may determine that
parental leave pay is payable to the secondary claimant.
The Secretary must be satisfied that the primary claimant satisfies the
work test and income test on the day the determination is being made
(subparagraph 15(3)(a)(i)). He or she must also be satisfied the primary
claimant satisfied the Australian residency test on the day the child was
born (subparagraph 15(3)(a)(ii)). The Secretary must be satisfied the
secondary claimant is eligible for parental leave pay on each day in the
secondary claimant's PPL period (paragraph 15(3)(b)).
The secondary claimant's PPL period must start on the maximum PPL period
start day for the child and may end either on the maximum PPL period end
day for the child, if the Secretary is satisfied that the secondary
claimant is eligible for all days in that period, or, otherwise, on the
last day in the maximum PPL period for the child that the Secretary is
satisfied the secondary claimant was or will be eligible for parental leave
pay for the child (subclause 15(5)).
The Secretary must consider the eligibility for parental leave pay of the
primary and secondary claimant during any period between the day the child
was born and the maximum PPL period start day for the child (established by
new subsection 11(4)). During this period, either the primary or secondary
claimant must be eligible for parental leave pay for the whole period, or
it must be the case that the primary claimant was or will be eligible for
parental leave pay on each day in the first part of the period, and the
secondary claimant was or will be eligible for parental leave pay on each
day in the last part of the period. This provides flexibility where the
secondary claimant has other paid leave available, to allow them to start
receiving parental leave pay from a day after they became the child's
primary carer.
Clause 16 - Determinations on a secondary claim made after the primary
claim
Clause 16 covers a situation where a secondary claimant makes a claim for
parental leave pay for a child other than jointly with the primary claimant
(subclause 16(1)). This may apply in situations where, for example, the
primary claimant claims and intends to take the full amount of parental
leave pay, but 12 weeks into her PPL period decides to go back to work and
give primary care of the child to her partner. The secondary claimant
cannot be eligible unless the Secretary has first made a determination on
the primary claimant's claim (subclause 16(2)) and is satisfied that
parental leave pay is payable to the primary claimant for a PPL period that
ends on the day before the day the secondary claimant's PPL period starts
(subclause 16(4)). In a case where the primary claimant's PPL period does
not already end on the required day, if the Secretary is satisfied that the
primary claimant has ceased to be eligible on the day prior to the first
day the secondary claimant is eligible for parental leave pay, the
Secretary may review and vary the PPL period set by the primary claimant's
determination under new Chapter 5.
If the Secretary is satisfied that the secondary claimant will be eligible
for parental leave pay for each day in their PPL period, the Secretary must
determine that parental leave pay is payable to the secondary claimant
(subclause 16(3)). The secondary claimant's PPL period must start on the
day in the maximum PPL period for the child that is the first day after the
day the primary claimant's PPL period ends. The secondary claimant's PPL
period must then end on the last day of the maximum PPL period for the
child, or such earlier day that the Secretary is satisfied is the last day
that the secondary claimant will be eligible for parental leave pay
(subclause 16(4)).
If the Secretary is not satisfied as set out above, then the Secretary must
determine that parental leave pay is not payable to the secondary claimant
(subclause 16(5)).
Clause 17 - Determination on a tertiary claim
Tertiary claims may only be considered when determinations have been made
that parental leave pay is payable to both a primary and a secondary
claimant in respect of a particular child and of a particular maximum PPL
period for the child. Tertiary claims may only be made in circumstances
that are exceptional, by virtue of new subsection 54(3).
A claim is made in 'exceptional circumstances', according to the Dictionary
(section 6) if it is made by a person who satisfies paragraph 54(1)(c)
(which deals with primary claims), paragraph 54(2)(d) (which deals with
secondary claims), or subsection 54(3) (which deals with tertiary claims).
These paragraphs allow the PPL rules to prescribe circumstances as
exceptional circumstances in which a claim may be made.
If the Secretary is satisfied that a determination that parental leave pay
is payable to the secondary claimant was or will be in force on the day
before the start of the tertiary claimant's PPL period (which can only
arise under new sections 14, 15 and 16 where a secondary claim has been
made and determined), then the Secretary may determine that parental leave
pay is payable to the tertiary claimant where the Secretary is satisfied
that the tertiary claimant is eligible for each day of the tertiary
claimant's PPL period. New Part 2-3, at paragraph 31(4)(b), allows a
person to be eligible for parental leave pay if they satisfy the conditions
prescribed by the PPL rules. This will allow for the prescription of
conditions in relation to cases which are unusual and exceptional, to allow
the Secretary to determine that parental leave pay is payable to such
claimants.
The tertiary claimant's PPL period must start on the day after the end of
the secondary claimant's PPL period. If the Secretary is satisfied that
the tertiary claimant is eligible for all remaining days in the child's
maximum PPL period, then the tertiary claimant's PPL period ends on the
child's maximum PPL period end day. Otherwise, the tertiary claimant's PPL
period ends on the last day in the child's maximum PPL period for which the
Secretary is satisfied that the tertiary claimant was or will be eligible
(subclause 17(3)).
If not so satisfied, the Secretary must determine that parental leave pay
is not payable to the tertiary claimant (subclause 17(4)).
Division 3 - When the Secretary cannot make a determination that parental
leave pay is payable
Because an effective claim may be made prior to the birth of the child to
whom the claim relates, the claimant may be required to provide additional
information before the Secretary may determine that parental leave pay is
payable. In other circumstances, the Secretary should not determine that
parental leave pay is payable to the person because they have already been
paid parental leave pay for the child or another related child. This new
Division sets out these restrictions.
Clause 18 - The child's birth has not been verified
Subclause 18(1) restricts the Secretary from making a payability
determination that parental leave pay is payable to a person for a child
unless the primary claimant has verified the child's birth. An effective
claim for parental leave pay may be made prior to or shortly after the
birth of the child when the claimant has not provided, or cannot at that
time provide, verification of the birth. This section requires that the
Secretary wait until verification of the birth has been provided before
making a payability determination that parental leave pay is payable for
the child. This does not restrict the Secretary from determining earlier
than verification is provided that parental leave pay is not payable to the
claimant for the child.
Subclause 18(2) provides that a person verifies a child's birth if the
person gives the Secretary a completed birth verification form for the
child, and, if applicable, gives the Secretary information showing that the
child's birth has been registered under the law, or that the person has
applied to have the birth of the child registered under the law.
The provision of information about the registration of the birth is only
required if the claimant is a parent, other than an adoptive parent, of the
child, the child is not a stillborn child, and the claimant is, under a law
of a State or Territory, responsible (whether alone or jointly) for
registering the birth of the child under the law.
'Parent' is defined in the Dictionary, new section 6, to have its ordinary
meaning except in particular circumstances. When used in relation to a
child who has been adopted, it means an adoptive parent of the child. When
used in relation to a child born because of the carrying out of an
artificial conception procedure - it means a person who is a parent of the
child under section 60H of the Family Law Act 1975. When used in relation
to a child born because of a surrogacy arrangement - includes a person who
is a parent of the child under section 60HB of that Act.
A 'stillborn' child is defined in the Dictionary, section 6, to mean a
child who weighs at least 400 grams at delivery or whose period of
gestation was at least 20 weeks, and who has not breathed since delivery,
and whose heart has not beaten since delivery. This definition mirrors the
definition of stillborn child in the family assistance law. The
requirement for registration of birth is the same as, and applies to the
same people as, the equivalent requirement for baby bonus under the family
assistance law.
The effect of this section is modified by new section 275 in respect of
adopted children, to provide that reference to a birth verification form
for a child is a reference to information required by the Secretary about
the adoption of the child (paragraph 275(d)). The Secretary may approve a
birth verification form for the purposes of verifying the birth of a child,
and, as the result of new section 275, may decide what information may be
required about the adoption of a child to satisfy the requirements of this
new section.
Clause 19 - The child was born before 1 January 2011
This clause restricts the Secretary from making a payability determination
that parental leave pay is payable to a person for a child if the child was
born before 1 January 2011, when the Paid Parental Leave scheme is to
commence. The effect of this new section is varied in relation to an
adopted child by new section 275, such that parental leave pay may still be
paid in respect of an adopted child born prior to 1 January 2011 but placed
with the adoptive parents of the child on or after 1 January.
Clause 20 - Multiple births
This clause provides that the Secretary must not make a payability
determination that parental leave pay is payable to a person for a child if
the child and another child are born during the same multiple birth, and
parental leave pay is or was payable to the person or another person for
the other child. This restriction applies even if children born during the
same multiple birth are being cared for within different families, for
example, as the result of their parents separating. Baby bonus may be
available for other children born during the same multiple birth.
New section 275 modifies the operation of this new section in the case of
an adopted child, where the child was adopted during the same multiple
adoption as other children. This will restrict the Secretary such that
parental leave pay may only ever be payable in respect of one of the
adopted children adopted during the same multiple adoption. Baby bonus may
be available for other children adopted during the same multiple adoption.
Clause 21 - The person etc. has already been paid parental leave pay
This clause prevents the Secretary from determining that parental leave pay
is payable to a person for a child if the person has been paid parental
leave pay for the child under a different claim, whether a primary or
secondary claim.
Further, the Secretary cannot determine that parental leave pay is payable
to a person for a child if the person is the primary claimant, and either
the person's current partner has been paid parental leave pay for the
child, or a former partner was paid parental leave pay for the child when
he or she was the person's partner.
If the person is the secondary claimant, the person's partner has been paid
parental leave pay for the child (other than as the primary claimant to
which the person's secondary claim relates), or a former partner of the
person was paid parental leave pay for the child (other than as the primary
claimant to which the person's secondary claim relates).
The limitations in this new section do not apply to a claim made in
exceptional circumstances. For these cases, limitations will be
established by the PPL rules.
Division 4 - General provisions applying to determinations about whether
parental leave is payable
Clause 22 - Assumptions when making the determination
This clause provides that, in deciding whether to make a payability
determination, the Secretary may act on the assumption that the state of
affairs known to the Secretary when making the determination will remain
unchanged. This would not prevent the Secretary from reviewing the
determination if the Secretary becomes aware that the state of affairs has
changed or was different.
Clause 23 - When the determination is in force
This clause provides that a payability determination comes into force on
the day it is made and continues in force unless it is revoked or set
aside. Revocation of a determination may occur under new section 25, or
the determination may be set aside under new Part 5-2 when a decision is
being reviewed.
Clause 24 - Notice of the determination
This clause requires the Secretary, if he or she makes a payability
determination, to give notice of the determination to the claimant, stating
whether parental leave pay is payable; and, if parental leave pay is
payable - the claimant's PPL period, and that the claimant may apply for
review of the determination in the manner set out in new Part 5-2.
However, in all such cases, new subsection 306(4) provides that the
determination is not ineffective just because this notice requirement has
not been complied with.
Clause 25 - Revoking the determination on request
This clause allows a claimant to request a revocation of their payability
determination that parental leave pay is payable, where, for example, the
claimant has decided that they would prefer to receive baby bonus for their
child. Subclause (1) provides that, if a payability determination has been
made that parental leave pay is payable to a person and the person requests
the Secretary to revoke the determination before the start of the person's
PPL period, then the Secretary must revoke the determination. The
revocation must be in the form approved by the Secretary.
The revocation is taken to have come into force on the day the person
requested the Secretary to revoke the determination (subclause (2)).
Division 5 - Initial eligibility determinations
Initial eligibility determinations may be made where an effective claim for
parental leave pay has been made, but the Secretary cannot yet make a
determination that parental leave pay is payable to the claimant, for
example, because the child has not yet been born and hence the birth
verified as required by new Subdivision 3. The Secretary may determine
that parental leave pay is not payable to the claimant if the Secretary is
not satisfied of the matters required for the claimant to be eligible for
parental leave pay for the required period at that time.
However, if the claimant appears likely to be eligible and parental leave
pay likely to be payable, the Secretary may make an initial eligibility
determination in order to allow the Secretary to make an employer
determination under new Chapter 3, and start engaging the claimant's
employer. An initial eligibility determination will also allow the person
to know early on that they are likely to be eligible, to allow them to plan
ahead financially.
The establishment of eligibility criteria by the making of an initial
eligibility determination does not remove the requirement that these
criteria be reconsidered when the Secretary is making a payability
determination.
Clause 26 - Initial eligibility determinations
This clause allows the Secretary to make an initial eligibility
determination. Subclause (1) deals with initial eligibility determinations
for primary claimants. The Secretary may determine that the person is
initially eligible for parental leave pay for a child if, when making the
determination, the Secretary is satisfied that the person satisfies the
work test, the income test and the Australian residency test.
Subclause (2) deals with initial eligibility determinations for secondary
claimants. The Secretary may determine that a person is initially eligible
for parental leave pay for a child if, when making the determination, the
Secretary is satisfied that the person satisfies the work test, the income
test and the Australian residency test, or will satisfy those tests on the
day the person becomes the child's primary carer. This is a more generous
timeframe over which the person may meet these eligibility criteria
because, in general, the time at which the Secretary may be considering an
initial eligibility determination may be well in advance of the day upon
which the secondary claimant will become the child's primary carer. It
will also allow the primary and secondary claimants to claim at the same
time and receive notification that they are both likely to be eligible for
parental leave pay. This will help them to plan in advance how they will
organise their caring and work arrangements.
Clause 27 - Assumptions when making the initial eligibility determination
This clause provides that, in deciding whether to make an initial
determination, the Secretary may act on the assumption that the state of
affairs known to the Secretary when making the determination will remain
unchanged. This does not prevent the actual state of affairs being looked
at again when a payability determination is being made.
Clause 28 - When the initial eligibility determination comes into force
This clause provides that an initial eligibility determination comes into
force on the day it is made.
Clause 29 - Notice of the initial eligibility determination
This clause provides that, if the Secretary makes an initial eligibility
determination under new section 26, the Secretary must give a notice of the
determination to the claimant. However, new subsection 306(4) provides
that the determination is not ineffective just because this requirement has
not been complied with.
Part 2-3 - Eligibility for parental leave pay
Division 1 - Guide to this Part
Clause 30 - Guide to this Part
This clause sets out a Guide to this Part.
Division 2 - When a person is eligible for parental leave pay
Clause 31 - when a person is eligible for parental leave pay
This clause deals with when a person is eligible for parental leave pay for
a child on a day.
Subclause (2) deals with the most common case, when the child is not
stillborn, and the circumstances are not otherwise exceptional. In this
case, a person is eligible for parental leave pay on a day if, on that day,
the person satisfies the following tests:
. the work test;
. the income test;
. the Australian residency test;
. the person is the primary carer of the child;
. the person has not returned to work;
. the person and the person's partner are not entitled to baby bonus for
the child, and a former partner of the person was not entitled to baby
bonus for the child when he or she was the person's partner.
Each of these tests is set out in subsequent Divisions of this new Part.
Subclause (3) provides that a person is eligible for parental leave pay for
a child who was stillborn, or has died before that day if, on that day, the
person would be eligible for parental leave pay for child under new
subsection (2), disregarding whether the person has returned to work, and,
instead of considering whether the person is the primary carer for the
child, considering whether the person would have been the child's primary
carer on that day had the child not been stillborn or died.
Subclause (4) provides that a person is eligible for parental leave pay for
a child on a day if, on that day, the person satisfies the conditions
prescribed by the PPL rules (although, for a primary claimant, the person
must still satisfy the work test, the income test and the Australian
residency test). This gives flexibility to allow tailored eligibility
criteria to be determined for exceptional situations. For example, a navy
officer claims PPL, is found eligible and her PPL period starts on the date
of birth. Ten weeks into her PPL period she is recalled to active duty.
In this situation, as she is unable to refuse to return to duty, PPL rules
could be made to enable the Secretary to disregard her return to work and
continue to pay her parental leave pay for the remaining eight weeks.
Subclause (5) makes it clear that, despite subsections (2), (3) and (4), a
person is not eligible for parental leave pay for a child on a day if, on
that day, the person is deceased. If the primary carer is deceased, a
secondary carer may be eligible.
Division 3 - The work test
Clause 32 - When a person satisfies the work test
This clause sets out a method statement for working out whether a person
satisfies the work test on a day. The work test applies by reference to
work performed prior to the birth of the child. Hence, the result of the
work test in relation to a particular day will be the same result for all
days in the person's PPL period.
Step 1 is to work out the person's work test period under new section 33.
Clause 33 - The work test period
Subclause (1) provides that a primary claimant's work test period is the
392 days (which is broadly equivalent to 13 months) immediately before a
specified date that is either the expected or actual date of birth of the
child. When this test is being applied prior to the birth of the child for
the purposes of an initial eligibility determination, the expected date of
birth of the child will be used (subclause (2)). If the test is being
applied for the purposes of a payability determination after the birth of
the child, the period is immediately prior to:
. if the child is born on or before the expected date of birth of the
child, the day the child is born;
. if the child is born after the expected date of birth of the child,
either the day the child is born or, if the person does not satisfy
the work test on this basis, the day that is the expected date of
birth of the child.
This is to ensure that claimants don't go back to work after the birth in
order to meet the work test, but to provide the most flexible test options
where the claimant has left work and the baby is born late. For example, a
woman who leaves work three months before the expected date of birth,
having met the work test, may no longer be eligible if the baby was born
two weeks after the expected date of birth and that date was used as the
reference date for the work test.
Subclause (3) provides that the work test period for a secondary claimant
is the 392-day (broadly, 13-month) period immediately before the person
becomes the child's primary carer. Where the claim is in relation to an
adopted child, new section 275 substitutes reference to the day the child
is placed during the process of adoption for the child's date of birth.
Similarly, where the claim is made in exceptional circumstances, new
section 276 substitutes reference to the day the claimant became the
child's primary carer for the date of birth of the child.
Step 2 in the method statement in clause 32 requires working out the days
in the work test period on which the person has and has not performed
qualifying work. A note advises the reader that 'qualifying work' is
defined in new section 34.
Clause 34 - When a person performs qualifying work
This clause provides that a person performs qualifying work if the person
either performs at least one hour of paid work on a day or the person takes
a period of paid leave of at least one hour on a day. New section 35 sets
out when a person performs 'paid work'.
Paid leave has its ordinary meaning, and would generally include paid
recreation, carer's or sick leave, or leave while receiving worker's
compensation payments. Subclause (2) provides that the PPL rules may
prescribe what is, or is not, paid leave. The PPL rules may vary the
ordinary meaning of 'paid leave'.
Clause 35 - When a person performs paid work
This clause provides for when a person performs paid work. The term
includes work as a self-employed person or work as the result of
engagement, for example as a defence force member or law enforcement
officer. Subclause (1) provides that a person performs paid work on a day
if, on that day, the person performs work (whether as an employee, a
contractor or otherwise and whether or not in Australia) for another entity
for remuneration or other financial benefit.
Other financial benefit includes non-financial remuneration. As a result,
for example, work performed on a family farm for remuneration in the form
of housing and food etc, would be included.
An 'entity' is defined in the Dictionary at new section 6 to mean any of:
. an individual;
. a body corporate;
. a body politic;
. a partnership;
. any other unincorporated association or body of persons;
. a trust.
Paid work would include jury service, or paid work performed in prison.
Subclause (2) makes it clear that a person is taken not to perform paid
work for the purposes of subclause (1) if the other entity is controlled by
the person (whether alone or with others). These cases are people who are
regarded as self-employed, and are covered by subclause (3) below.
Subclause (3) provides that a person performs paid work on a day if the
person performs work for the purpose of a business that is carried on
(whether in or outside of Australia) by the person (whether alone or with
others) or an entity that is controlled by the person (whether alone or
with others). The business must be carried on for profit, that is, not
entirely for a charitable purpose.
A person 'controls' an entity if the person has the capacity to determine
the outcome of decisions about the entity's financial and operating
policies (subclause (4)).
Subclause (5) provides that the PPL rules may prescribe what is or is not
taken to be paid work.
Step 3 in the method statement in clause 32 involves working out whether
any days on which the person has not performed qualifying work during the
work test period fall within a permissible break. A note directs the
reader to new section 36 for the definition of 'permissible break'.
Clause 36 - When there is a permissible break
This clause provides both for permissible breaks between two work days in
the work test period, and for permissible breaks at the beginning of the
work test period.
Subclause (2) provides that a break between two days on which the person
performed qualifying work (work days) in the work test period is a
permissible break if there were no more than 56 consecutive days
(equivalent to 8 weeks) between those two work days.
For example, if a woman works for three months, takes unpaid leave for six
weeks for a holiday, then returns to work for another six months before
having the baby, the holiday would be a permissible break because it was
only around 42 days in length.
Subclause (3) provides for permissible breaks where the person has
performed work on a day before the start of the work test period. Where
the work day occurs no more than 56 consecutive days prior to the first day
of work within the work test period, then the period from the beginning of
the work test period until the first work day in the work test period are
days falling within a permissible break.
For example, a woman's work test period starts on 1 February. She worked
up until 15 January, went on unpaid leave and returned to work on
15 February. She could count 15 February as the first day in her work test
period because she had a permissible break (31 days) between this day and
the previous work day even though that day was outside the work test
period.
Step 4 of the method statement in clause 32 then requires working out
whether there is a period (a 'qualifying period') of 295 days (or
approximately 10 months) in the work test period that are days on which the
person has performed qualifying work, or that fall within a permissible
break.
The 10-month rule makes it easier for mothers to qualify for PPL for second
and subsequent children. The rule is also more flexible than the more
common '12 months' continuous service' to allow for time not worked as a
result of illness or pregnancy complications prior to the birth of the
child. It provides more flexibility for casual employees and contractors.
Step 5 of the method statement in clause 32 provides that if the person has
performed at least 330 hours of qualifying work in the qualifying period
then the person satisfies the work test.
If a person works for an hour on a day, but is required under their
relevant award or similar to be paid for a greater minimum period of hours
of work, for example, three hours of work, they are still only regarded as
having performed an hour of paid work for the purposes of this test.
Similarly, if they have worked for a larger number of hours than the hours
for which they have been paid, only the hours of paid work apply for the
purposes of this test.
Division 4 - The income test
The income limit (initially $150,000) will be indexed under new Subdivision
B.
Subdivision A - The income test
Clause 37 - When a person satisfies the income test
This clause provides that a person satisfies the income test if the
person's adjusted taxable income for the reference income year is not more
than the relevant PPL income limit.
Clause 38 - A person's adjusted taxable income
This clause provides a definition of adjusted taxable income. Adjusted
taxable income is to be worked out in accordance with Schedule 3 to the
Family Assistance Act (defined in the Dictionary to mean the A New Tax
System (Family Assistance) Act 1999), disregarding subclause 2(2) and
clauses 3 and 3A of that Schedule. The disregarded clauses relate to
factoring in a partner's income for family assistance purposes, which is
not relevant for the purposes of paid parental leave. Adjusted taxable
income for family assistance purposes (including for the purposes of baby
bonus) broadly includes:
. taxable income;
. foreign income;
. some tax free pensions and benefits;
. adjusted fringe benefits;
. deductible child maintenance;
. total net investment loss;
. reportable superannuation contributions.
Clause 39 - The reference income year
This clause sets out the reference income year. If the person is a primary
claimant, the reference income year is the income year which ended before
the earlier of the day the person made the claim, and the day the child was
born. If the person is a secondary claimant, the reference income year is
the income year which ended before the earlier of the day the person made
the claim, and the day the person became the child's primary carer.
Where the claim is in relation to an adopted child, new section 275
substitutes reference to the day the child is placed during the process of
adoption for the child's date of birth. Similarly, where the claim is made
in exceptional circumstances, new section 276 substitutes reference to the
day the claimant became the child's primary carer for the date of birth of
the child.
Clause 40 - The relevant PPL income limit
This clause provides for the relevant PPL income limit. If the person is a
primary claimant, the relevant PPL income limit is the income limit which
applied on the earlier of the day the person made the claim, and the day
the child was born. If the person is a secondary claimant, the relevant
PPL income limit is the income limit which applied on the earlier of the
day the person made the claim, and the day the person became the child's
primary carer.
Similarly, new sections 275 and 276 may change references to the child's
date of birth to either the date of placement of an adopted child, or the
day a person became a child's primary carer in exceptional circumstances.
Clause 41 - The PPL income limit
This clause provides that the PPL income limit that applies on a day is, if
the day is on or after 1 October 2010 but before 1 July 2012 - $150,000;
and, if the day is on or after an indexation day (the relevant index day)
but before the next indexation day - the indexed amount worked out under
new Subdivision B on the relevant indexation day.
Subdivision B - Indexation of the PPL income limit
Clause 42 - Indexation of the PPL income limit
This clause provides for indexation of the PPL income limit on 1 July in
each year (the indexation day) starting on 1 July 2012.
Subclause (2) sets out a method statement for working out the indexed
amount for the PPL income limit on the indexation day. Step 1 involves
working out the amount (the previous amount) for the PPL income limit that
applied in the day immediately before the indexation day.
Step 2 uses new section 43 to work out the indexation factor on the
indexation day.
Clause 43 - The indexation factor
This clause uses a formula, namely:
Index number for the reference December quarter
Index number for the base December quarter
Each of these terms is then separately defined.
Base December quarter means the December quarter that has the highest index
number of the December quarters before the reference December quarter (but
not earlier than the December quarter 2007). This earliest quarter was
chosen in order to maintain parity with baby bonus.
Index number, for a quarter, means the All Groups Consumer Price Index
number that is the weighted average of the eight capital cities and is
published by the Australian Statistician in relation to that quarter.
Reference December quarter means the last December quarter before the
indexation day.
Subclause (2) provides that the indexation factor is to be worked out to
three decimal places, but increased by 0.001 if the fourth decimal place is
more than 4.
Subclause (3) provides that, if the indexation factor worked out under
subclauses (1) and (2) would be less than 1, that indexation factor is to
be increased to 1. This prevents the indexation factor reducing the income
limit at any stage.
Subclause (4) provides that amounts are to be worked out under this clause
using only the index numbers published in terms of the most recently
published reference base for the Consumer Price Index, and disregarding
index numbers published in substitution for previously published index
numbers (except where the substituted numbers are published to take account
of changes in the reference base).
Step 3 of the method statement in clause 42 involves multiplying the
previous amount by the indexation factor, to produce the provisional
indexed amount. Step 4 then rounds the provisional indexed amount to
produce the indexed amount, by reference to new section 44.
Clause 44 - Rounding off indexed amounts
This clause rounds the final indexed amount to the nearest dollar, rounding
50 cents up to the nearest dollar.
Division 5 - The Australian residency test
The particulars of this test are the same as the residency requirement for
eligibility for baby bonus under the family assistance law, which is
closely based upon the residency requirement in the Social Security Act
(defined in the Dictionary to mean the Social Security Act 1991). However,
unlike for baby bonus, the test applies on a daily basis, and must continue
to be met in order for the person to remain eligible for parental leave
pay. A limit of three years upon remaining an Australian resident while
overseas applies.
Clause 45 - When a person satisfies the Australian residency test
This clause provides that a person satisfies the Australian residency test
on a day if, on that day, the person is an Australian resident. The
Dictionary, new section 6, provides that 'Australian resident' has the same
meaning as in the Social Security Act. A person can be an Australian
resident even if they are physically located outside Australia if they meet
a range of factors set out in that Act.
Alternatively, the test will be met if the person is a special category
visa holder residing in Australia. The Dictionary, new section 6, provides
that a special category visa has the same meaning as in the Migration Act
1958. These visas are generally held by New Zealand citizens. The
Dictionary, new section 6, provides that 'resides in Australia' has the
same meaning as in the Social Security Act.
Additionally, the test will be met if the person (subclause (2)) is the
holder of a visa determined by the Minister for the purposes of
subparagraph 729(2)(f)(v) of the Social Security Act and either the person
is in Australia, or the person is temporarily absent from Australia for not
more than 13 weeks, and the absence is an allowable absence in relation to
special benefit within the meaning of Part 4.2 of that Act.
Clause 46 - Effect of absence from Australian on Australian residency test
This clause provides an exception to new section 45. Despite that new
section, a person does not satisfy the Australian residency test on a day
if, before the relevant day, the person left Australia and, on the relevant
day, the person has been absent from Australia for more than three years
since the day the person left Australia.
Subclause (2) provides that, if the person has been absent from Australia
for more than 13 weeks but less than three years, and then returns to
Australia but leaves Australia again less than 13 weeks later, the person
is taken not to have returned to Australia for the purposes of this new
section.
Subclause (3) provides that, if the person returns to Australia after
having been absent for three years (but would have continued to satisfy the
Australian residency test while the person was absent from Australia but
for the three-year limitation), but then leaves again less than 13 weeks
later, the person does not satisfy the residency test at any time during
their return to Australia of less than 13 weeks, or the time following
their departure.
Division 6 - Primary carer
Clause 47 - When a person is the primary carer of a child
This clause provides that a person is a primary carer of a child on a day
by looking at care arrangements during the person's reference period. The
person (subclause (1)) is the primary carer of a child if the child is in
the person's care in that period and the person meets the child's physical
needs more than anyone else in that period. The reference period
(subclause (2)) is the period that is determined by the Secretary for the
purposes of making a payability determination on the person's claim. The
Secretary will generally choose a period during which the care arrangements
for the child remain stable. PPL rules for eligibility may be made for
special circumstances, for example, where the mother of a child is
hospitalised for a time and hence unable to meet this definition of
'primary carer'.
Only one person can be a child's primary carer on a particular day
(subclause (3)).
Subclause (4) provides that, despite subsection (1), a person is not the
primary carer of a child on a day if, before that day, the child has died.
However, new subsection 36(3) provides for the eligibility of a claimant in
these circumstances.
Division 7 - Return to work
This new Division is relevant to deciding whether a person has returned to
work for the purposes of the eligibility test.
Clause 48 - When a person returns to work
This clause provides that a person 'returns to work' on a day if, on that
day, the person performs an hour or more of paid work other than for a
permissible purpose. 'Paid work' is set out in new section 40, as it is
relevant both to the work test and the restriction on return to work. If a
person is performing voluntary work and not being paid, they will not have
performed paid work.
Clause 49 - When paid work is for a permissible purpose
This clause sets out when paid work is for a permissible purpose. It deals
with people who are self-employed, in a broad sense, and with people who
are not.
Subclause (1) applies to the general category of a person who performs work
for another. Work is for a permissible purpose if the person performs paid
work for an entity as an employee, defence force member or law enforcement
officer on a keeping in touch day with the entity on a day that would
otherwise be a day of leave in a period of leave granted by that entity,
and the person has not already performed paid work on 10 keeping in touch
days (whether with the entity or another entity). 'Entity' is defined in
the Dictionary, new section 6, to mean any of:
. an individual;
. a body corporate;
. a body politic;
. a partnership;
. any other unincorporated association or body of persons;
. a trust.
Performing work on a 'keeping in touch day' is defined in new section 50.
Subclause (2) applies to people covered by new subsection 35(3), who are
broadly classified as self-employed. New subsection 35(3) covers people
who perform work for the purposes of a business that is carried on by the
person, whether alone or with others, or an entity that is controlled by
the person (whether alone or with others). A person who is employed by, or
is a managing director of a company which they control, and through which
they operate their business, would fall within this definition. This would
include a person who runs a farm which is owned by a trust or other entity,
as long as the person controls that trust or entity (either on their own or
with others).
For people within this category, paid work is for a permissible purpose if
it consists of overseeing the business or is an occasional administrative
task. This reflects the reality that a small business person may still
need to oversee their business and perform administrative tasks during the
first year of their baby's life.
Clause 50 - Performing paid work on a keeping in touch day
This clause provides for when a person performs work for an entity on a
keeping in touch day. It applies to work on a day that would otherwise be
a day of leave in a period of leave granted by that entity. This applies
to people who are employees of an entity or have been engaged by an entity
as a defence force member or law enforcement officer, while they are on
leave granted by that entity. It does not cover other categories of worker
including independent contractors, appointed position-holders such as
judges or office-holders.
For people covered, a day of work is a keeping in touch day if performing
the work is to enable the person to keep in touch with his or her
employment or engagement in order to facilitate a return to that employment
or engagement after the period of leave. Activities such as training days,
planning days and conferences would meet this requirement.
Additionally, both the person and the entity must have consented to the
person performing work for the entity on that day. Consent must be freely
given, and does not include agreement extracted as the result of threats or
coercion by any person or entity.
Additionally, the day must not be within 14 days after the day the child
was born. New sections 275 and 276 may change references to the child's
date of birth to either the date of placement of an adopted child, or the
day a person became a child's primary carer in exceptional circumstances.
Similar changes to the Fair Work Act are expected to be made in a separate
bill, which would enable a person to return to work for the purposes of
keeping in touch without breaking the continuity of their period of unpaid
parental leave under that Act.
Part 2-4 - Claims for parental leave pay
Division 1 - Guide to this Part
Clause 51 - Guide to this Part
This clause sets out a guide to this Part.
Division 2 - Claims for parental leave pay
As provided by new section 10 above, the Secretary cannot make a
determination that parental leave pay is payable to a person for a child
for a period unless the person has made an effective primary claim, an
effective secondary claim or an effective tertiary claim.
Clause 52 - Who can claim
This clause provides that only a natural person can make a claim.
Clause 53 - Types of claim
This clause provides that there are three types of claim: a primary claim,
a secondary claim and a tertiary claim.
Subclause (2) provides that a primary claim is a claim in the form approved
by the Secretary for primary claims. Subclause (3) provides that a
secondary claim is a claim in the form approved by the Secretary for
secondary claims. Subclause (4) provides that a tertiary claim is a claim
in the form approved by the Secretary for tertiary claims. These clauses
allow the Secretary to determine different forms of claim for each of the
three categories, but do not require the Secretary to do so. The Secretary
may approve a single form of claim covering all three claim types.
Clause 54 - Who can make a primary claim, secondary claim or tertiary claim
Subclause (1) provides that a primary claim may only be made by the child's
birth mother, an adoptive parent of the child or a person who satisfies the
circumstances prescribed by the PPL rules as being exceptional
circumstances in which a primary claim can be made.
Subclause (2) provides that a secondary claim may only be made by the
partner of a primary claimant, a person who is a parent of the child and is
not the primary claimant, the partner of a person who is a parent of the
child and not a primary claimant, or a person who satisfies the
circumstances prescribed by the PPL rules as being exceptional
circumstances in which a secondary claim can be made.
Subclause (3) provides that a tertiary claim may only be made by a person
who satisfies the circumstances prescribed by the PPL rules as being
exceptional circumstances in which a tertiary claim can be made.
Clause 55 - How to make an effective claim
This clause provides that a claim is not effective unless the requirements
of new sections 56, 57, 58, 59 and 60, as applicable, are satisfied.
Subclause (2) provides that a claim is also not effective if it is made by
a person who is not a person who can make that type of claim under new
section 54.
Clause 56 - Requirements of the claim
This clause provides that the claim must be made in the form approved and
the manner required by the Secretary for that type of claim, contain any
information required by the Secretary, and be accompanied by any documents
required by the Secretary. In particular, the Secretary may require that
the claim contain information about the claimant's employer or the
claimant's employment with that employer, in order to allow the Secretary
to consider making an employer determination requiring that the parental
leave pay be paid by the person's employer (see new Chapter 3). It would
also be expected that the Secretary would require that essential
information to determine the claim, such as the actual birth-date of the
child where known, be included in the claim.
Subclause (2) provides that the Secretary may require that different
information be contained in, and different documents accompany, different
types of claims or different claims of the same type of claim.
Clause 57 - Nominated start date
This clause requires that a claim, if it is a primary claim, state a
specified date (the nominated start day) as the date on which the primary
claimant wants parental leave pay to start being paid. A note makes it
clear that the date of birth of the child is a specified date for this
purpose, although '6 months after the birth of the child' is not a specific
date. A further note makes it clear that even though a primary claimant
nominates a specific date, parental leave pay may not be payable from the
date because, for example, the primary claimant has not verified the
child's birth before that date: see new subsection 11(4).
Subclause (2) provides that, before a payability determination is made on
the primary claim, the person may change his or her nominated start day by
notifying the Secretary of a new nominated start day. However,
subclause (3) provides that, after a payability determination is made on
the primary claim, the primary claimant may only change his or her
nominated start day by notifying the Secretary, before the old date, of the
new nominated start day The new nominated start date cannot be a date that
is on or after the day the person notifies the Secretary of the change.
Clause 58 - Expected date of birth and expected date of primary care
This clause provides that, if the claim is a primary claim, and is made
before the child's birth, the claim must specify the child's expected date
of birth. Subclause (2) provides that, if the claim is a secondary claim
and it is made before the day the secondary claimant expects to become the
child's primary carer, the claim must specify that day.
Clause 59 - Tax file number statement
This clause provides that the claim must contain a tax file number
statement. This provision is identical to the provision required by the
family assistance law for claims for baby bonus. The claimant must provide
either:-
. their tax file number, or
. authorisation to the Commissioner of Taxation to provide the
claimant's tax file number (if any) to the Secretary, or
. authorisation to the Commissioner of Taxation to advise the Secretary
of the outcome of the claimant's pending application for a tax file
number.
Tax file number information is required both to ensure that income
eligibility is correctly assessed, and to allow the remission of tax
withholdings to the Commissioner of Taxation for claimants not paid
parental leave pay by their employer.
Clause 60 - When to claim
This clause provides that the claim must be made in the period that starts
on the day that is 97 days before the expected date of birth of the child.
This is a generous three-month period, and is the earliest date from which
the claimant could satisfy the work test.
Clause 61 - Claim may be withdrawn or varied
This clause allows a claimant who has made an effective claim to withdraw
or vary the claim before the claim is determined. Subclause (2) provides
that the claimant may only do so in the manner approved by the Secretary.
Subclause (3) provides that, if a claim is withdrawn, it is taken never to
have been made.
Chapter 3 - Payment of parental leave pay
Part 3-1 - Instalments of parental leave pay
Division 1 - Guide to this Part
Clause 62- Guide to this Part
This clause gives the reader a brief outline of the matters dealt with in
Part 3-1.
Division 2 - Instalments of parental leave pay
Clause 63 - Instalments of parental leave pay
Subclause 63(1) provides that parental leave pay must be paid to a person
in instalments.
Subclause 63(2) provides that an instalment can be payable to the person by
their employer or by the Secretary. New section 72 sets out the
circumstances in which the employer pays an instalment while new
sections 84 to 87 inclusive outline when the Secretary is required to pay
an instalment.
Under subclause 63(3), an instalment is payable to a person if there are
one or more days (PPL days) in the instalment period that fall within the
person's PPL period. The Dictionary defines PPL period by reference to
new section 11. Under new section 11, where the Secretary makes a
payability determination for a person, the Secretary is required to specify
the period for which parental leave pay is payable to the person. That
period is the person's PPL period.
An instalment is payable on the payday for the instalment and more than one
instalment can be paid on a particular day. The relevant rules are in
subclauses 63(4) and (5).
Clause 64 - A person's instalment period and the payday for an instalment
This clause gives meaning to the concepts of instalment period and payday.
A note directs the reader to new sections 93 and 94, which affect when an
instalment period begins and ends in certain circumstances where the
Secretary takes over payment of an instalment.
If an instalment period is to be paid by an employer and there is a regular
period for which the person is usually paid in relation to their
performance of work, then subclause 64(2) provides that the person's
instalment period is that regular period and the payday for the instalment
is the day on which the person is usually paid. A payday could be before,
during or after the instalment period to which the instalment relates,
depending on when the employer would usually pay the person for their work.
If there isn't a regular pay period, then the instalment period is each
calendar month and the payday for the instalment is the first day after the
end of the relevant calendar month (subclause 64(3) refers).
If an instalment is to be paid by the Secretary, then the person's
instalment period is the period of 14 days starting on the day the
Secretary considers appropriate and each successive 14-day period, and the
payday is a day after the end of the instalment period considered
appropriate by the Secretary (subclause 64(4) refers).
Clause 65 - The amount of an instalment
The amount of an instalment is the total of the daily national minimum wage
amounts for each week day in the relevant instalment period that is also a
PPL day.
The Dictionary defines a week day to mean a day that is not a Saturday or
Sunday (but includes any public holiday that is not a Saturday or a
Sunday).
The daily national minimum wage amount for a day is defined as 7.6 times
the amount of the national minimum wage (expressed as a monetary amount per
hour) set by a national minimum wage order that is in operation on that
day, irrespective or whether it takes effect on that day. This clause
would provide that the daily national minimum wage amount for a PPL day is
adjusted from the day of operation of the order (that is, 1 July) and not
the day of effect.
The Dictionary defines national minimum wage order as having the meaning
given by the Fair Work Act.
A note informs the reader that the national minimum wage order comes into
operation under section 287 of the Fair Work Act. Subsection 287(5) of the
Fair Work Act provides that the national minimum wage order comes into
operation on 1 July, but does not take effect in relation to a particular
employee until the employee's next payday.
For the purposes of this definition, the national minimum wage is taken to
be the wage set by the national minimum wage order for employees in
relation to whom no exceptional circumstances exist.
To clarify, the national minimum wage amount for a PPL day is the same for
all people and is not affected by section 294 of the Fair Work Act, which
provides for special national minimum wages for junior employees, employees
to whom training arrangements apply and employees with disability.
If a determination is made to vary a national minimum wage order and the
determination comes into operation on a day that is earlier than the day
the determination is made, the determination is taken to come into
operation on the day the determination is made. Any such variation would
therefore not affect the daily national minimum wage amount
retrospectively, regardless of the date of operation specified in the
order.
Clause 66 - Protection of instalment
This clause protects an instalment from sale, assignment, charge,
execution, bankruptcy or otherwise by making it inalienable. A note at the
end of this provision directs the reader to a related provision, which also
provides protection from garnishee for an account into which an instalment
is paid.
However, this protection is subject to new sections 67 (deductions
authorised by the person), 68 (deductions for PAYG withholding) and 69
(deductions relating to child support). There are no other amounts that
can be deducted by the Secretary or employer from an instalment that is
payable to the person (new section 70 refers).
Clause 67 - Deductions authorised by person
This clause enables the employer or the Secretary to deduct an amount from
an instalment if the deduction is authorised in writing by the person and
is principally for their benefit (subclause 67(1) refers).
A note at the end of this provision makes it clear that a deduction by an
employer in accordance with a salary sacrifice or other arrangement is
permitted if made in accordance with this provision.
The Secretary may also deduct an amount from an instalment that is payable
to a secondary claimant to repay a debt owed by a primary claimant relating
to an instalment for the same child, provided the deduction is authorised
by the secondary claimant (subclause 67(2) refers).
An authorisation must be written and specify the amount of the deduction,
and may be withdrawn in writing by the person. The amount to be deducted
can also be varied by written authorisation by the person. Subclauses
67(3) and (4) are relevant.
Clause 68 - Deductions for PAYG withholding
Under this clause, an employer or the Secretary may also deduct an amount
from an instalment if required under section 12-110 in Schedule 1 to the
Taxation Administration Act 1953 (PAYG withholdings).
Clause 69 - Deductions relating to child support
Under subclause 69(1), an employer may deduct an amount from an instalment
if required under section 46 or 72A of the Child Support Registration and
Collection Act.
Subclause 69(2) requires the Secretary to make deductions from an
instalment payable to a person in accordance with a notice given to the
Secretary under section 72AD of the Child Support Registration and
Collection Act.
In this way, the Child Support Registrar will be able to collect amounts
due to the Commonwealth under a maintenance liability and child support
debts through deductions from instalments.
Clause 70 - No other deductions
Subclause 70(1) provides that an amount cannot be deducted from an
instalment except in accordance with new section 67, 68 or 69, despite any
other law of the Commonwealth, a State or a Territory.
Under subclause 70(2), an employer must comply with subclause 70(1).
A note states that this provision is a civil penalty provision.
Part 3-2 - Payment of instalments by employer
Division 1 - Guide to this Part
Clause 71 - Guide to this Part
This clause gives the reader a brief outline of the matters dealt with in
Part 3-2.
Division 2 - Payment of instalments by employer
Clause 72 - When an employer pays instalments
This clause sets out the only circumstances in which an employer must pay
an instalment to a person on a payday.
The first circumstance, set out in subclause 72(1), is where an instalment
is payable (there are one or more PPL days in the instalment period for the
instalment), an employer determination is in force on a day during the
instalment period and the employer has been paid enough to fund the
instalment as at the payroll cut-off day.
The Dictionary defines payroll cut-off as the last day the employer can
reasonably make changes to the instalment to be paid to, or in relation to,
the person on the person's payday for the instalment.
Subclause 72(2) deals with the situation where an employer becomes required
to pay an instalment after the start of a person's PPL period, where
neither the Secretary nor the employer was required to pay an earlier
instalment but would have been if one or more instalments were payable from
the start of the person's PPL period. In this situation, the instalments
are taken to have become payable under new section 91 and, provided the
employer has been paid enough to fund the earlier instalments, the employer
must also pay them with the later instalment.
Under subclause 72(3), if the employer has not been paid enough to fund an
instalment at the payroll cut-off for the instalment and this is rectified
at the payroll cut-off for a later instalment, then the employer must pay
the instalment to the person on the payday for the later instalment period.
An employer is taken to have complied with a requirement to pay an
instalment on a payday if the instalment is paid before the payday or, if
the employer cannot pay on the day, as soon as practicable after that day.
Several notes in this clause refer to new section 96, which is the relevant
provision.
These provisions are civil penalty provisions.
Subclause 72(4) makes it clear that an employer is not required to pay an
instalment to a person except in accordance with this provision.
Clause 73 - When an employer has been paid enough to fund an instalment
This clause sets out when an employer has been paid enough to fund an
instalment for a person for a child. An employer has been paid enough if
the total of PPL funding amounts paid to the employer for the person is at
least the sum of the amount of instalments previous paid to the person, the
amount of the instalment and the amount of any earlier instalment that is
to be paid to the person on the payday for the instalment.
Clause 74 - Method of payment of instalment payable by employer
An instalment payable by an employer must be paid in cash, by cheque, money
order, postal order or similar order payable to the person or by electronic
funds transfer to credit an account held by the person. This is a civil
penalty provision.
Division 3 - PPL funding amounts
Clause 75 - Payment of PPL funding amounts
Under this clause, the Secretary must pay one or more PPL funding amounts
to a person's employer where satisfied that an instalment is or is likely
to be payable to the person and the employer is or is likely to be required
to pay the instalment to the person. However, this does not require the
Secretary to pay a PPL funding amount earlier than a reasonable period
before the payroll cut-off for the instalment.
These rules ensure that PPL funding amounts are paid to employers who have
agreed to pay parental leave pay to a person (there is an employer
determination in force for the employer and the person) in advance of the
payroll cut-off for the payday for the instalment, thereby enabling the
employer to pay the instalment in accordance with the employer's usual pay
cycle. In practice, employers are likely to receive PPL funding amounts a
day or two before their payroll cut-off, to ensure that instalments are
able to be paid on the next available payday.
However, if the employer has not been paid enough to fund an instalment as
at the payroll cut-off for an instalment, there will be a positive
obligation on the Secretary to pay the required PPL funding amount to the
employer before the next payroll cut-off for an instalment for the person.
The failure of the Secretary to pay a PPL funding amount to the employer by
the required time would be a matter that can be the subject of review under
new Chapter 5.
Clause 76 - Rules affecting the amount of a PPL funding amount
This clause sets some limits around the amount of a PPL funding amount.
A PPL funding amount must not be less than the sum of the amounts of
instalments that will have become payable to the person on the next payday
after the PPL funding amount is paid that do not relate to days in the
person's PPL period for which the employer has already been paid a PPL
funding amount. This is the minimum amount for a PPL funding amount.
A PPL funding amount for a person cannot exceed the sum of the minimum
amount plus the equivalent of six weeks' advance of the person's
instalments. This rule would enable an employer to be paid three PPL
funding amounts to cover the maximum 18-week PPL period, rather than being
paid PPL funding amounts on a more regular payment cycle. While payments
of PPL funding amounts would generally follow the employer's pay cycle, the
employer could ask for their PPL funding amounts to be made in three six-
weekly payments if that would be simpler for them administratively and
would give them more flexibility.
However, the sum of PPL funding amounts paid to the employer cannot exceed
the amounts of the instalments that would be payable to the person for the
person's PPL period.
Clause 77 - Notice Requirements relating to PPL funding amounts
This clause requires the Secretary to provide written notice to the
employer each time the Secretary pays the employer a PPL funding amount.
The notice must contain the name of the person for whom the PPL funding
amount has been paid, the amount of the PPL funding amount, the PPL days
for which the PPL funding amount has been paid, the daily national minimum
wage amount for each of those days and any information prescribed by the
PPL rules.
Clause 78 - PPL funding amounts not public money
This clause makes it clear that a PPL funding amount paid by the Secretary
to an employer, other than an FMA Agency, is not public money for the
purposes of the Financial Management and Accountability Act 1997.
PPL funding amounts, once paid to the employer are legally and beneficially
the property of the employer, to do with as they wish. The employer has a
separate obligation to pay an equivalent amount to a person as instalments.
PPL funding amounts paid to an employer are not held in trust for the
Commonwealth or the person.
Clause 79 - Protection of PPL funding amounts
This clause protects a PPL funding amount against sale, assignment, charge,
execution, bankruptcy or otherwise until paid to the employer. The PPL
funding amount then becomes the employer's property to do with as they
wish. However, the employer would have a separate obligation to pay an
equivalent amount as instalments of parental leave pay on the relevant
payday.
Division 4 - Obligations of employer relating to paying instalments
Clause 80 - Giving person record of payment
This clause requires the employer, before the end of the next working day
after paying an instalment to a person, to give the person information
prescribed by the PPL rules in the form (if any) prescribed. This
information might include the amount of the instalment, any PAYG
withholdings and other deductions from the instalment and other matters
relating to the instalment.
The Dictionary defines working day as a day that is not a Saturday, Sunday
or a public holiday.
This is a civil penalty provision.
Clause 81 - Keeping records
Subclause 81(1) requires the employer to make, and keep for seven years,
records in relation to each person for whom an employer determination for
the employer comes into force. Under subclause 81(2), the PPL rules can
prescribe the form of, and information to be included in, those records.
These are civil penalty provisions.
Clause 82 - Notifying Secretary if certain events happen
If the Secretary makes an employer determination for a person and employer,
then this clause requires the employer to notify the Secretary if one of
the events listed in the provision occurs. These events are relevant to
whether the employer is required to pay an instalment, to the payment of
PPL funding amounts, to the payment by the employer of instalments, and to
whether an instalment is payable to the person. The events listed include
a change in the employer's bank details, a change in the instalment period
or payday cut-off for the instalment, the employer being paid too little or
too much of a PPL funding amount, whether the employer ceases to carry on a
business and other matters.
The employer must notify in accordance with the timeframes in
subclause 82(2). Written notice must be given as soon as practicable after
the employer becomes aware that the event has happened and, in the case of
ceasing to carry on a business, not more than 30 days before the event. A
note states that this provision is a civil penalty provision.
This clause also provides some rules around when particular notification
obligations cease to apply that link, as appropriate, to the day a decision
is made that parental leave pay is not payable or the status of the
employer determination.
Part 3-3 - Payment of instalments by Secretary
Division 1 - Guide to this Part
Section 83 - Guide to this Part
This clause gives the reader a brief outline of the matters dealt with in
Part 3-3.
Division 2 - Payment of instalments by Secretary
Clause 84 - When the Secretary pays instalments
This clause sets out the circumstances in which the Secretary is required
to pay an instalment to a person on the payday for the instalment.
The first circumstance, covered by subclause 84(2), is where the Secretary
never made an employer determination for the person and the person's
employer in accordance with new section 101.
The second circumstance, covered by subclause 84(3), is where the employer
has applied for review of the decision to make an employer determination
and the determination has not come into force before the 28th day after the
start of the person's PPL period. Where this happens, the Secretary is
required to pay the instalment that includes the 28th day and later
instalments until the instalment period that starts before the day on which
the employer determination comes into force. An employer determination
comes into force in accordance with new section 107.
The Secretary must also pay the person instalments payable for any earlier
instalment periods by virtue of new section 85 (Note 1 refers). Note 2
makes it clear that, if the employer determination never comes into force,
the Secretary will pay all instalments to the person.
The third circumstance, covered by subclause 84(4), is where the Secretary
revokes the employer determination. Where this happens, the Secretary must
pay the instalments from the instalment period that begins on or after the
day the revocation comes into force.
A note refers the reader to new sections 85 and 86, which also require the
Secretary to pay arrears for earlier instalment periods in certain
circumstances.
The revocation rules are set out in new section 108.
The fourth circumstance, covered by subclause 84(5), is where the Secretary
has referred a matter to the Fair Work Ombudsman because the employer has
allegedly not paid an instalment as required. Where this happens, the
Secretary must pay instalments from the instalment period that begins on or
after the day after the last PPL day for which the employer was paid a PPL
funding amount, if the Secretary is satisfied that it is appropriate to do
so, and provided the Fair Work Ombudsman has not notified the Secretary
that the employer has not complied with a compliance notice given for the
failure to pay.
Where the Fair Work Ombudsman has notified the Secretary that the employer
has not complied with a compliance notice given for the failure to pay one
or more instalments as required, new section 108 provides for revocation of
the employer determination and subclause 84(4) applies because the employer
determination has been revoked.
If both subclauses 84(4) and (5) apply, then the provision where the
transfer day occurs first is taken to apply. This will be the provision
that allows the Secretary to take over payment of instalments earlier.
Clause 85 - Payment of arrears - employer determination reviewed or revoked
before coming into force
This clause enables the Secretary to pay arrears in two situations.
The first is where the Secretary is required to pay instalments to a person
in circumstances where the employer has applied for review of an employer
determination made for the employer and person.
The second is where the Secretary is required to pay instalments to a
person because an employer determination that has never come into force has
been revoked. (The circumstances in which an employer determination comes
into force are set out in new section 107.) An example might be where a
payability determination and employer determination have been made for a
person who subsequently resigns, before the employer determination has come
into force.
In these situations, the Secretary must pay the person instalments payable
from the start of the person's PPL period (by virtue of new section 91) on
the payday for the first instalment period that the Secretary is required
to pay under this clause.
Clause 86 - Payment of arrears - employer determination revoked after
coming into force
This clause deals with payment of arrears by the Secretary where an
employer determination that has come into force is revoked as a result of
the Fair Work Ombudsman notifying the Secretary that the employer has not
complied with a compliance notice given for a failure to pay an instalment
as required or because the employer is insolvent and where the employer has
not paid part or all of an instalment as required. In these circumstances,
the Secretary must pay what the employer has failed to pay on the payday
that the Secretary is required to pay an instalment to the person under new
subsection 84(4). If the Secretary is not required to pay an instalment
under new subsection 84(4), then the arrears would need to be paid on the
day that would have been the payday for the later instalment period (new
section 95 refers).
The exception is if all or part of the instalment has already been
recovered by the person from their employer through legal proceedings.
The Dictionary provides a definition of insolvent.
Clause 87 - Payment of arrears - extending PPL period after review
This clause requires the Secretary to pay instalments that become payable
under new section 92 as soon as practicable after becoming required to do
so. New section 92 deals with the situation where a person's PPL period is
extended by an additional period.
Clause 88 - Method of payment of instalment payable by Secretary
This clause requires the Secretary to pay an instalment or part of an
instalment to the credit of a bank account nominated and maintained by the
person (subclause 88(1) refers).
The Dictionary defines bank account as including, but not being limited to,
an account held with an ADI (an authorised deposit-taking institution).
However, subclause 88(2) allows the Secretary to direct that an instalment
or part of an instalment be paid in another way. A direction made under
this provision is merely declaratory, included to assist the reader as the
direction is not a legislative instrument within the meaning of section 5
of the Legislative Instruments Act.
Clause 89 - Giving person record of payment
Where the Secretary pays an instalment or part of an instalment, this
clause requires the Secretary to give the person information prescribed by
the PPL rules relating to that payment.
Part 3-4 - General rules relevant to paying instalments
Division 1 - Guide to this Part
Clause 90 - Guide to this Part
This clause gives the reader a brief outline of the matters dealt with in
Part 3-4.
Division 2 - General rules relevant to paying instalments
Clause 91 - Effect of the Secretary or employer becoming required to pay
instalments after start of PPL period
This clause deals with the situation where the Secretary or an employer
becomes required to pay an instalment after the start of a person's PPL
period where neither was required to pay an earlier instalment but would
have been if required to pay from the start of the PPL period. This might
occur where a person claims parental leave pay and verifies the birth of
their child within 28 days of the birth, the Secretary makes a payability
determination and the person's PPL period starts from the date of birth.
In these circumstances, the earlier instalments that would have been
payable are taken to have become payable on the respective paydays for the
instalments.
Clause 92 - Effect of extending PPL period after review
This clause deals with the situation where a person's PPL period is
extended by an additional period. If one or more instalments would have
been payable in relation to the additional period assuming the payability
determination had always included the additional period and the Secretary
had been required to pay the instalments and the Secretary is not otherwise
required to pay the instalments, then the instalments are taken to be
payable on the respective paydays for the instalments. Under new section
87, the Secretary is required to pay these instalments.
Clause 93 - Effect on instalment periods of employer determination coming
into force after review
This clause deals with the situation where the Secretary is required to pay
instalments because an employer has sought review of an employer
determination and the employer determination subsequently comes into force.
In this situation, the instalment period for the last instalment payable by
the Secretary ends on the day before the employer determination comes into
force (the transfer day). This rule is in subclause 93(2).
For the employer, subclause 93(3) provides that the person's first
instalment period payable by the employer starts on the transfer day.
A note indicates to the reader that subclause 93(3) does not affect when
the instalment period ends.
These rules ensure continuity of payment for the person but also make clear
when the Secretary's responsibility for paying an instalment stops and the
employer's starts, by reference to a transfer day.
Clause 94 - Effect on instalment periods of revocation etc.
This clause deals with the situation where an employer determination has
come into force but the Secretary has been required to take on payment of
instalments to a person for an instalment period that began on or after the
transfer day because the employer determination has been revoked or because
the Secretary has referred a matter to the Fair Work Ombudsman relating to
a failure by the employer to pay an instalment as required. The Secretary
is required to pay instalments in these circumstances under new subsections
84(4) and (5) respectively.
In this situation, the instalment period for the last instalment payable by
the employer ends on the day before the transfer day. This rule is in
subclause 94(2).
For the Secretary, the person's first instalment period payable by the
Secretary starts on the transfer day (subclause 94(3) refers).
A note indicates to the reader that subclause 94(3) does not affect when
the instalment period ends.
Clause 95 - Paying instalment on payday for later instalment - no later
instalment
This clause deals with the situation where the Secretary or employer is
required to pay an instalment on a payday for a later instalment period but
there is no later instalment period. An example might be where the
Secretary is required to pay arrears to a person but the person does not
have a subsequent instalment period.
In this situation the Secretary or employer must pay the instalment on the
payday that would have been the payday for the later instalment period if
it were payable.
Clause 96 - Paying instalment on particular day - complying with obligation
There are numerous provisions in Chapter 3 that require the employer or the
Secretary to pay an instalment on a particular day.
This clause provides that the employer or Secretary is taken to have
complied with a requirement to pay an instalment on a particular day if the
instalment is paid before that day (as might happen if the payday is a
public holiday and the usual practice is to pay before the holiday) or, if
payments cannot be made on the required day, as soon as practicable after
that day. This might happen if the employer has incorrect bank account
details for the employee and therefore cannot make the payment at the
required time.
Clause 97 - Effect of garnishee etc. order
The rule against inalienability (provided for in new section 66) ceases to
apply once an instalment has been paid into a bank account because the
payment loses its character as an instalment at that point.
This clause provides some further protection for an instalment that has
been paid into an account from the effect of a court order in the nature of
a garnishee order. The court order does not apply to a saved amount,
worked out under the method statement in this clause. There is a
definition of saved amount in the Dictionary that references this
provision.
Clause 98 - Exemption from operation of workers' compensation and accident
compensation laws
Clause 98 clarifies that the payment of an instalment of parental leave pay
is not relevant for the purposes of the provisions of any Commonwealth,
State or Territory law dealing with workers' compensation or accident
compensation.. Similarly, the payment would not be taken into account for
the purposes of laws, or provisions of laws, prescribed by the PPL rules to
the extent that they deal with workers' compensation or accident
compensation. The PPL rules would be able to exclude particular laws or
provisions of laws from the operation of this clause.
This clause would ensure that compensation recipients would not have their
compensation payments reduced because they are receiving parental leave pay
from their employer during the same period and would also mean that
parental leave payments would not affect premiums or other contributions
required in relation to compensation arrangements.
Clause 99 - PPL period is not a period of paid leave
This clause makes clear that, merely because an employee receives
instalments of parental leave pay for all or part of a period that the
employee is taking unpaid leave from the employer, it should not be treated
as if that is a period (or part period) of paid leave. Whether an employee
is taking unpaid or paid leave affects whether the employee is entitled to
accrue certain entitlements, such as annual leave, notice of termination or
redundancy pay, during that period.
Part 3-5 - Employer determinations
Division 1 - Guide to this Part
Clause 100 - Guide to this Part
This clause gives the reader a brief outline of the matters dealt with in
Part 3-5.
Division 2 - Making employer determinations
The Dictionary defines employer and employee. These terms are used in
various provisions in the new Act and have their ordinary, or common law,
meanings. They are relevant in determining when the Secretary will make an
employer determination under Chapter 3. There are certain obligations that
arise for employers once an employer determination has been made.
The definition of employee provides that a reference to an employee has its
ordinary meaning and includes a reference to a person who is usually such
an employee, but does not include a person on a vocational placement.
The definition of employer has its ordinary meaning and includes a
reference to a person who is usually such an employer.
The concepts of 'usually employed' and 'usually employs' were considered by
the Federal Court in Australian Meat Industry Employees' Union v Belandra
Pty Ltd [2003] FCA 910;126 IR 165.
Clause 101 - Making employer determination
Subclause 101(1) requires the Secretary to make an employer determination
(that the person's employer is required to pay instalments) if the
Secretary is satisfied of the matters listed. These are as follows.
The Secretary must be satisfied a payability determination that parental
leave pay is payable to the person or an initial eligibility determination
for the person is in force. The Dictionary defines a payability
determination by reference to specified provisions in new Chapter 2 while
an initial eligibility determination is defined by reference to new section
26.
The Secretary must be satisfied that instalments are likely, if the
determination is made, to be payable by the employer for at least
40 consecutive PPL days that are week days.
The Secretary must be satisfied that the person has, or will have been,
employed by the employer for at least 12 months immediately before:
. the expected date of birth of the person's child where the person
claims before the birth; or
. the later of the expected date of birth and the day the child was
born where the person claims after the birth.
The Secretary must be satisfied that the person is likely to be an
Australian-based employee of the employer for the person's PPL period where
a payability determination has been made or the period of days for which
instalments are likely to be payable in any other case.
The Dictionary defines Australian-based employee as an employee whose
primary place of work is in Australia or who is employed by an Australian
Government employer.
Australia includes the Territory of Cocos (Keeling) Islands and the
Territory of Christmas Island.
An Australian Government employer means the Commonwealth, a State, a
Territory, a body corporate established for a public purpose by or under a
law of the Commonwealth, State or Territory or a body corporate that is
incorporated under a law of the Commonwealth, State or Territory in which
the Commonwealth, a State or a Territory has a controlling interest.
The employer must also have an ABN (defined in the Dictionary by reference
to the A New Tax System (Australian Business Number) Act 1999).
If the person has more than one employer who satisfies the required
criteria, then the person must nominate in their claim the employer they
would like to pay their instalments.
Where the person's employer has elected, under new section 109, to pay the
person their instalments and the person has consented in the claim to the
employer paying their instalments, the employer is not required to satisfy
the requirement that parental leave pay is payable by the employer for at
least 40 consecutive PPL days or the requirement relating to previous
employment. The relevant provision is subclause 101(2).
Under subclause 101(3), the Secretary cannot make an employer determination
unless the Secretary is satisfied of the matters referred to in subclause
101(1) and the employer determination is made on or before the day the
payability determination is made.
A note refers the reader to the exception which applies where the
payability determination is made following a review and is set out in new
section 106.
Subclause 101(4) sets out the circumstances in which the Secretary may
decide not to make an employer determination. These are if the person's
PPL period has ended, the person is a tertiary claimant, the child in
respect of whom parental leave pay is payable is stillborn or has died, if
a primary claimant owes a debt in relation to an instalment paid in
relation to a child and the person is a secondary claimant for the same
child, and where the employer is not a fit and proper person. The terms
primary claimant, secondary claimant, tertiary claimant and stillborn are
defined in the Dictionary.
Subclause 101(5) sets out the matters that the Secretary can take into
account in determining whether an employer is a fit and proper person.
These include whether the employer has, or is alleged to have, contravened
a civil penalty provision of this new Act, whether a matter relating to a
contravention by the employer has been referred to the Fair Work Ombudsman,
whether the employer has been convicted of certain criminal offences
involving fraud or dishonesty, misapplication of money and other specified
matters and any other matter the Secretary considers relevant.
Subclause 101(6) states that, in deciding whether to make an employer
determination, the Secretary may assume that the state of affairs known at
that time will remain unchanged.
Clause 102 - Secretary must give notice of employer determination
This clause provides that, if the Secretary makes an employer
determination, the Secretary must give the employer and the person written
notice of that decision.
The notice given to the person must identify the employer and also contain
any information prescribed by the PPL rules.
The notice give to the employer must contain the information listed. This
information will identify the person and whether they have a payability
determination and give the employer enough information to know when the
employer is likely to have to pay instalments to the person. The notice
given to the employer must also be dated, the date being the date the
preparation of the notice was completed.
If the Secretary decides not to make an employer determination, the
Secretary must give the person written notice advising of the decision.
The notice must contain the information, if any, prescribed by the PPL
rules.
Clause 103 - Employer must respond to notice of employer determination
This clause requires the employer to either give the Secretary an
acceptance notice or to seek review of the employer determination within 14
days after the date of the notice given under new section 102.
This is a civil penalty provision.
Clause 104 - Requirements for an acceptance notice
This clause sets out the requirements for an acceptance notice.
The acceptance notice must contain:
. a declaration to the effect that the employer accepts their obligation
to pay instalments to the person;
. bank account information for the employer which will identify an
account held and maintained by the employer with a financial
institution (as defined in the Dictionary) into which PPL funding
amounts can be paid by the Secretary;
. the relevant pay cycle information for the person; and
. any other information prescribed by the PPL rules.
However, an employer will not be required to include the employer's bank
account information if the employer has made an election that applies to
the person and the acceptance notice contains a declaration to the effect
that the bank account information already provided by the employer in the
context of the election is correct for the person.
Clause 105 - Giving bank account and pay cycle information etc. after
review
This clause deals with the situation where an employer has applied for
review of a decision to make an employer determination, either the
application is withdrawn or the employer determination has not been set
aside and is no longer subject to review, and the person's PPL period has
not ended. Where this happens, the Secretary must give the employer
written notice requiring the employer to provide the Secretary a written
notice containing the employer's bank account details, pay cycle
information for the person and any other information prescribed by the PPL
rules.
Subclause 105(3) requires the employer to provide the information within
14 days of the date of the Secretary's notice. This is a civil penalty
provision.
Clause 106 - Effect of decision on review that parental leave pay is
payable
This clause allows the Secretary to make an employer determination on a day
that is after the day on which a payability determination is made where:
. a decision is made to the effect that parental leave pay is not
payable to the person (including where a payability determination is
not made because the claim was ineffective); and
. a decision is subsequently made to the effect that parental leave pay
is payable to the person; and
. the Secretary is satisfied that the conditions for making an employer
determination (as set out in new subsection 101(1)) are met.
Division 3 - When employer determination is in force
Clause 107 - When employer determination comes into force
An employer determination can only come into force in the circumstances set
out in subclauses 107(2) or (3). Otherwise the determination does not come
into force at all.
An employer determination comes into force under subclause 107(2) if the
employer gives the Secretary an acceptance notice in accordance with a
requirement under new section 103 or a compliance notice under new
section 157.
An employer determination comes into force under subclause 107(3) if the
employer gives the Secretary a notice in accordance with new section 105
(providing the employer's bank account and pay cycle details etc. after
review of an employer determination) and the person's PPL period has not
ended.
Subclause 107(4) provides that an employer determination stays in force
unless it is revoked.
Clause 108 - Revocation of an employer determination
This clause contains a table that lists the circumstances in which the
Secretary must revoke an employer determination and the day the revocation
comes into force. These circumstances include where the employer is
insolvent (a term that is defined in the Dictionary), where the person has
ceased to be employed by the employer, where the Fair Work Ombudsman has
notified the Secretary that the employer has not complied with a compliance
notice relating to payment of an instalment and other specified matters.
Subclause 108(2) sets out other circumstances in which the Secretary may
decide to revoke an employer determination. The Secretary may revoke where
the employer is not a fit and proper person (new subsection 101(5) sets out
the matters that the Secretary may take into account in making this
decision) or if the child in relation to whom parental leave pay is payable
is stillborn or has died . The Secretary may also revoke for any other
reason if considered appropriate. This discretion would cover unforeseen
or unusual circumstances where it would not be appropriate to continue to
pay PPL funding amounts to the employer and would enable particular
situations to be managed efficiently or appropriately. The discretion
would be exercised on delegation by an officer at the appropriate level,
having regard to the nature of the discretion.
A revocation under subclause 108(2) comes into force on the day of the
revocation (subclause 108(4) refers).
If the Secretary revokes an employer determination for a person and
employer, the Secretary must give them a written notice advising of the
decision. The notice must contain any information prescribed in the PPL
rules.
If, when the Secretary revokes an employer determination, the employer has
applied to the SSAT for review of a decision relating to the employer
determination and the SSAT has not determined the review, the Secretary
would also be required to notify the SSAT of the revocation.
Division 4 - Election by employer to pay instalments
Clause 109 - Election by employer to pay instalments
This clause allows an employer to elect to pay instalments to one or more
of their employees. The election must be by written notice in an approved
form and must contain the employer's bank account information (as defined
in new subsection 104(2)). An election must be expressed to apply to one
or more specified employees of the employer, one or more specified classes
of employees of the employer or all employees of the employer.
Clause 110 - Employer may withdraw election
This clause enables the employer to withdraw an election by written notice
given to the Secretary in a form approved by the Secretary. However,
withdrawal does not affect an employer determination that has already been
made.
Clause 111 - Secretary may cancel an election
This clause allows the Secretary to cancel an employer's election if
satisfied that the employer is no longer a fit and proper person (having
regard to the matters set out in new subsection 101(5)).
However, a cancellation does not affect an employer determination that has
already been made. A note informs the reader that an employer
determination can be revoked under new subsection 108(2). One of the
grounds for revocation under this provision is that the employer is not a
fit and proper person.
If the Secretary cancels an election, the Secretary must advise the
employer of the cancellation. The notice must contain the information, if
any, prescribed by the PPL rules.
Clause 112 - When an election is in force
Under this clause, an election remains in force until the PPL period for
each relevant employee ends, the employer withdraws the election or the
election is cancelled.
Division 5 - Notice of decisions
Clause 113 - Notice of outcome of a payability determination
This clause applies where an employer determination is made for a person
and their employer and, after the determination is made, the Secretary
makes a payability determination that parental leave is either payable or
not payable to the person. In these circumstances, the Secretary must
notify the employer in writing about whether parental leave pay is payable
to the person and, if so, the person's PPL period. The Secretary is also
required to provide any other information prescribed by the PPL rules.
A note informs the reader that a decision that parental leave pay is not
payable to the person results in revocation of the employer determination
under new subsection 108(1).
However, the Secretary is not required to give such a notice if the
employer determination has previously been revoked.
Clause 114 - Notice of varying, setting aside etc. payability determination
This clause applies where the Secretary has made an employer determination
for a person and their employer and the Secretary then varies, sets aside
or revokes a person's payability determination. In these circumstances,
the Secretary must notify the employer in writing about the effect of the
Secretary's decision, if the effect is to change the person's PPL period,
the different PPL period and any other information prescribed by the PPL
rules.
However, the Secretary is not required to give such a notice if the
employer determination has previously been revoked.
Clause 115 - Notice of other decisions
This clause enables the PPL rules to provide for the Secretary to give
notices in other circumstances, containing such information as is
prescribed by the PPL rules.
Chapter 4 - Compliance and enforcement
Part 4-1 - Information gathering
Division 1 - Guide to this Part
Clause 116 - Guide to this Part
This clause outlines the scope of Part 4-1.
Division 2 - Information gathering
Division 2 provides for the collection of information from claimants and
third parties to ensure that a person is paid their correct entitlement of
parental leave pay, for debt recovery purposes and to facilitate accurate
information sharing between the Australian Tax Office and Centrelink for
the purposes of compliance and debt offsetting.
Subdivision A - Gathering information from any person
Clause 117 - General power to obtain information
This clause provides that the Secretary may request a person to give
information, or to produce a document that is in his or her custody or
control, to a specified agency. The Secretary may only make such a request
if it is considered that the information or document may be relevant to the
matters specified in this clause.
The note at the end of this clause points out that the agency must be a PPL
agency (new subsection 120(4)).
Clause 118 - Power to obtain information from a person who owes a debt to
the Commonwealth
This clause allows the Secretary to obtain certain information from a
person who owes a debt to the Commonwealth under or as a result of this new
Act. Such a person may be requested to give information, or to produce
documents that are in the person's custody or control, concerning the
person's financial situation to a specified agency. The person may also be
required to notify of a change of address (if relevant) within 14 days of
moving to the new address.
The note at the end of this clause points out that the agency must be a PPL
agency (new subsection 120(4)).
Clause 119 - Obtaining information about a person who owes a debt to the
Commonwealth
This clause deals with information or documents that would help a specified
agency locate a person who owes a debt under or as a result of this new Act
or that is relevant to the debtor's financial situation. The Secretary may
require a person who may have such information or documents to give the
information or documents to the Department.
The note at the end of this clause points out that the agency must be a PPL
agency (new subsection 120(4)).
Clause 120 - Written notice of requirement
Subclause 120(1) provides that a request under this new Subdivision must be
by notice in writing given to the person.
Subclause 120(2) provides that the notice may be given personally or by
post or by any other manner approved by the Secretary. The notice must
specify how the person is to give the information or produce the document
to which the requirement relates, within what period of time, to whom the
information is to be given or the document produced and the authority for
the notice.
Subclause 120(3) ensures that a person is given at least 14 days within
which to provide the information for the purposes of subparagraph
120(2)(b)(ii).
Subclause 120(4) provides that the Secretary must specify a PPL agency for
the purposes of subparagraph 120(2)(b)(iii).
Subclause 120(5) provides that the notice may require the person to give
the information by appearing before a specified officer to answer
questions. If this is the case, a person may not be required to attend
before the end of 14 days after the notice is given (subclause 120(6)).
Clause 121 - Obligations not affected by State or Territory laws
This clause provides that no State or Territory law may operate to prevent
a person from giving information, producing a document or giving evidence
that the person is required to give or produce to a specified agency or an
officer for the purposes of the Paid Parental Leave scheme.
Clause 122 - Offence - failure to comply with requirement
This clause provides that a person must not refuse or fail to give
information or produce a document as required under this new Subdivision
(other than under new paragraph 117(d)). The penalty for such a refusal or
failure is imprisonment for six months.
Subclause 122(2) provides that subclause 122(1) does not apply if the
person has a reasonable excuse for refusing or failing to comply with a
notice.
The note reminds the reader that, in accordance with subsection 13.3(3) of
the Criminal Code, a defendant bears an evidential burden in relation to
the matter in subclause 122(2)
Subdivision B - Gathering information relating to tax file numbers
Tax file number (TFN) information is required both to ensure that income
eligibility is correctly assessed, and to allow the remission of tax
withholdings to the Commissioner of Taxation for claimants not paid
parental leave pay by their employer.
Clause 123 - Secretary may require Commissioner of Taxation to provide tax
file numbers etc.
This clause provides that the Secretary may require the Commissioner of
Taxation to provide the Secretary with information, including tax file
numbers. The information that the Secretary can seek under this provision
is limited to information about a person who has made an effective claim
for parental leave pay, the information is relevant to the claim and
contained in TFN declarations.
Clause 124 - Purposes for which tax file numbers may be used
This clause allows a person's TFN to be used to ensure that a person is
entitled to be paid parental leave pay and as the primary matching key for
data matching purposes between Centrelink and the Australian Tax Office
with the object of strengthening compliance with the Paid Parental Leave
scheme.
Subclause 124(1) provides that subclause 124(2) applies to a person's TFN
that has been provided to the Secretary for the purposes of this new Act by
the person, the person's partner or the Commissioner of Taxation (on the
authority of the person or under new section 123).
Subclause 124(2) limits the purposes for which the TFN, provided pursuant
to subclause 124(1), may be used. The purposes are limited to detecting
cases in which parental leave pay has been paid when it should not have
been and to ensure that parental leave pay is only paid to those people who
are eligible for the payment and have made an effective claim and to
ensuring that the amount of the payment is correct.
Subdivision C - Obligation to notify of change of circumstances
Clause 125 - Obligation to notify of change of circumstances
Subclause 125(1) requires a person, who makes an effective claim for
parental leave pay and where the Secretary has not made a determination
that the payment is not payable, to notify the Secretary of certain things,
(that is, this provision operates where the Secretary has not rejected the
person's claim).
Subclause 125((2) requires the person to notify the Secretary if anything
happens (or is likely to happen) that causes the person to cease to be
eligible for parental leave pay on a day.
Subclause 125(3) requires that notification of a change in circumstances
occurs in the manner set out in a written notice to the claimant under
subclause 125(5) as soon as practicable after the person becomes aware that
the circumstance has happened (or is likely to happen).
Subclause 125(4) requires the Secretary to approve a manner of notification
that a person must use when notifying the Secretary of a change of
circumstances.
Subclause 125(5) requires that the Secretary must notify the person in
writing of the approved manner of notification. In practice, such a power
would give the Secretary the flexibility about how notification should
occur (for example, by phone, in writing, by electronic means, etc).
Under subclause 125(4) a failure to notify of a change of circumstances is
an offence, the penalty for which is six months imprisonment.
Division 3 - Confidentiality
Under the Paid Parental Leave scheme, personal information about claimants
(defined as 'protected information') will be confidential and therefore
protected against unauthorised recording, disclosure and use. Division 3
protects personal customer information by restricting what can be done with
such information and providing offences for unauthorised recording,
disclosure or use of customer information. These rules need to be read in
conjunction with additional rules on personal information contained in the
Privacy Act.
The definition of protected information for the purposes of the
confidentiality provisions in this bill operates in a similar manner to
those definitions in the A New Tax System (Family Assistance)
(Administration) Act 1999 and the Social Security (Administration) Act
1999. It relates to information about a person as held in the records of a
number of agencies and is in effect 'all encompassing' beyond the
definition of personal information as defined in the Privacy Act. The
adoption of a common definition across these agencies will afford this
information a consistent level of protection with that provided under the
family assistance law and the social security law.
Protected information is defined in new section 6 as meaning information
about a person that is, or was, held in the records of the Department or
the Commonwealth Services Delivery Agency (Centrelink) and information
about a person that is, or was, held in the records of Medicare Australia
that was collected for the purposes of the Paid Parental Leave scheme.
Information that there is no information about a person is also protected
information within this definition.
There are, however, some purposes for which protected information can be
obtained, recorded, disclosed or used.
Clause 126 - Operation of Division
This clause provides that nothing in the Division prevents a person from
disclosing information to another person if the information is disclosed
for the purposes of the Child Support (Assessment) Act 1989 or the Child
Support Registration and Collection Act.
This clause also provides that the provisions of the new Division relating
to the disclosure of information do not affect the operation of the Freedom
of Information Act 1988.
Clause 127 - Obtaining and using protected information
This clause provides for the collection and use of protected information.
Subclause 127(1) provides that protected information may only be obtained
for the purposes of the Paid Parental Leave scheme.
Subclause 127(2) authorises a person to record, disclose or otherwise use
protected information provided the record, disclosure or use is made for
the purposes of this new Act, for the purpose for which the information was
disclosed to the person under new section 128 or with the express or
implied authority of the person to whom the information relates.
Clause 128 - Disclosing personal information
This clause provides that (despite new sections 129 to 132) the Secretary
may disclose, in certain circumstances, information that was acquired by an
officer in the exercise of his or her powers, or performance of his or her
duties or functions under this new Act. The grounds for disclosure are:
a) if the Secretary certifies that it is necessary in the public interest
to do so; or
b) to an Agency Head for the purposes of that Agency; or
c) with the express or implied authority of the person to whom the
information relates; or
d) to the Minister to enable the Minister to consider a complaint or
issue in relation to a matter that arises under the Paid Parental
Leave scheme if the Secretary reasonably believes that the disclosure
is likely to assist the Minister; or
e) to an SES or APS employee in the Department for the purpose of
briefing, or considering briefing, the Minister if the Secretary
reasonably believes the disclosure is likely to assist the Minister to
consider a complaint or issue in relation to a matter arising under
the Paid Parental Leave scheme.
The note at the end of subclause 128(1) clarifies that, in addition to the
requirements of this clause, section 14 of the Privacy Act also applies to
information disclosed under this new section.
Subclause 128(2) obliges the Secretary, when giving certificates to allow
the release of information on the basis of the public interest, to act in
accordance with guidelines (if any) that have been issued by the Minister
under subclause 128(4). Information that is released by way of a public
interest certificate could include information that was collected in
respect of the Paid Parental Leave scheme before commencement of any
guidelines made by the Minister.
Subclause 128(3) obliges the Secretary, when disclosing information to an
Agency Head; to act in accordance with guidelines (if any) that have been
issued by the Minister under subclause 128(4).
Subclause 128(4) provides for the Minister to make guidelines, in the
PPL rules, for the exercise of the Secretary's power to give certificates
in the public interest under paragraph 128(1)(a) or to an Agency Head under
paragraph 128(1)(b).
Subclause 128(5) provides that, if a determination or certificate under
paragraph 128(1)(a) is made or given in writing, the determination or
certificate is not a legislative instrument. This provision is included to
assist readers as the instrument is not a legislative instrument within the
meaning of section 5 of the Legislative Instruments Act.
Subclause 128(6) provides for the disclosure of protected information (as
defined in paragraph (a) or (b) of the definition under new section 6)
about the principal to the principal's payment or correspondence nominee.
Clause 129- Offence - unauthorised access to protected information
This clause provides that a person commits an offence if the person obtains
protected information which the person is not authorised to obtain. The
penalty for obtaining such information without authority is two years'
imprisonment.
Clause 130 - Offence - unauthorised use of protected information
This clause provides that a person commits an offence if the person
records, discloses or otherwise uses protected information which the person
is not authorised or required under this new Act to record, disclose or
use. The penalty for contravening this provision is two years'
imprisonment.
Clause 131 - Offence - soliciting disclosure of protected information
This clause provides that a person commits an offence if the person
solicits the disclosure of protected information from an officer or another
person and the disclosure would be in contravention of this new
Subdivision. The penalty for contravening this provision is two years'
imprisonment.
A person may commit an offence under subclause 131(1) whether or not any
protected information is actually disclosed.
Clause 132 - Offence - offering to supply protected information
Subclause 132(1) provides that a person commits an offence if the person
offers to supply (whether to a particular person or otherwise) protected
information about another person. The penalty for contravening this
provision is two years' imprisonment.
Subclause 132(2) provides that a person commits an offence if the person
holds himself or herself out as being able to supply (whether to a
particular person or otherwise) protected information about another person.
The penalty for contravening this provision is two years' imprisonment.
Subclause 1323) excludes an officer, who is acting the in the performance
or exercise of his or her power, duties or functions under this new Act,
from being guilty of an offence under subclause 132(1) or (2).
Division 4 - Offences against Part 7.3 and 7.4 of the Criminal Code
Clause 133 - Repayment of instalment of parental leave pay or PPL funding
amount
This clause provides that if a person is convicted of an offence against
Part 7.3 or 7.4 of the Criminal Code in relation to this new Act, the court
may impose a penalty and also order the person to pay reparation to the
Commonwealth of an amount equal to any amount:
a) paid to, or in relation to, the person by way of an instalment of
parental leave pay because of the act, failure or omission that
constituted the offence (this relates to claimants of the payments);
or
b) paid to the person by way of a PPL funding amount because of the act,
failure or omission that constituted the offence (this relates to
employers).
The note at the end of subclause 133(1) reminds the reader that, under new
sections 138 and 139, the Secretary and a court may give a certificate in
relation to the amount referred to in paragraph 133(1)(b).
Subclause 133(2) provides that a person is not to be imprisoned for failing
to pay an amount to the Commonwealth under paragraph 133(1)(b), despite
anything in this new Act or any other law.
Clause 134 - Penalty where person convicted of more than one offence
This clause provides that, if a person is convicted of more than one
offence against Part 7.3 or 7.4 of the Criminal Code, the court may choose
to impose one penalty for all of the offences involved. However, the
penalty must not be more than the total of the maximum penalties that could
have been imposed if each offence were dealt with separately.
Clause 135 - Joining of charges
This clause enables more than one charge against a person for offences
against Part 7.3 or 7.4 of the Criminal Code to be dealt with as one
complaint, information or declaration. However, this may only occur if
those charges are either founded on the same facts; form a series of
offences of the same or similar character; or are part of a series of
offences of the same or similar character.
Clause 136 - Particulars of each offence
This clause provides that if two or more charges are set out in the same
complaint, information or declaration, the particulars of each offence
charged must be set out in a separate paragraph.
Clause 137 - Trial of joined charges
This clause provides that, if charges are joined, they must be tried
together, unless the court considers that it would be just to try them
separately and makes an order to that effect.
Clause 138 - Evidentiary effect of Secretary's certificate
This clause stipulates that, for the purposes of the court's power to order
the payment of reparation under new paragraph 133(1)(b), a certificate
signed by the Secretary is evidence of the matters set out in the
certificate. The certificate would specify the person to whom an
instalment of parental leave pay or a PPL funding amount has been paid in
consequence of an act, failure or omission for which any person has been
convicted of an offence against Part 7.3 or 7.4 of the Criminal Code, the
amount concerned and the act, failure or omission concerned.
Clause 139 - Enforcement of court certificate as judgment
This clause makes it clear that, if a reparation order under new
paragraph 133(1)(b) is filed by certificate in any court that has civil
jurisdiction to the extent of the reparation amount (including the court
that made the order), it is enforceable for all purposes as a final
judgment of that court.
Part 4-2 - Compliance
Division 1 - Guide to this Part
Clause 140 - Guide to this Part
This new Act imposes a number of obligations on employers in relation to
the payment of instalments of parental leave pay to a person where an
employer determination has been made for the employer and the person. Part
4-2 deals with compliance with those obligations in this new Act. The
compliance framework applies from the time an employer is notified that an
employer determination has been made in respect of the employer and the
person (their employee). Clause 140 provides a Guide to Part 4-2.
Division 2 - Referring matters to the Fair Work Ombudsman
The Secretary and the Fair Work Ombudsman will each have a role in
compliance with different employer obligations that are civil penalty
provisions in the new Act, and will have the discretion to give compliance
notices, infringement notices, and to seek a civil penalty order, in
relation to a contravention of those civil penalty provisions. New
Division 2 allows for the Secretary to refer certain matters to the Fair
Work Ombudsman for investigation and compliance action, if necessary, where
it is believed that an employer may have contravened his or her obligations
under new section 70 or new Part 3-2 of the new Act.
Clause 141 - Functions of the Fair Work Ombudsman
This clause outlines the functions of the Fair Work Ombudsman in relation
to the paid parental leave scheme. The Fair Work Ombudsman's functions are
to inquire into, and investigate, any matter referred to the Fair Work
Ombudsman under new section 143; to commence proceedings in a court in
relation to a contravention of new section 70 (which deals with
unauthorised deductions from instalments) or new Part 3-2 (which deals with
payment of instalments by employer); and any other function that is
incidental to those functions. The Fair Work Ombudsman's functions would
extend to include the publication of information and advice about its
investigative and enforcement role under the new Act.
Clause 142 - Exercise of compliance powers
Fair Work Inspectors have a range of compliance powers under Subdivision D
of Division 3 of Part 5-2 of the Fair Work Act, which can be exercised for
the compliance purposes described in section 706 of that Act, including for
the purposes of a provision of another Act conferring functions or powers
on inspectors. Clause 142 enables Fair Work Inspectors to exercise their
compliance powers (other than those under sections 715 or 716 of the Fair
Work Act) for the purpose of determining whether new section 70 (which
deals with unauthorised deduction from instalments) or new Part 3-2 (which
deals with payment of instalments by employer) is being, or has been,
complied with.
Subclause 142(2) then provides that, for the purposes of the Fair Work Act,
the purpose referred to in subclause 142(1) is taken to be a compliance
purpose and a civil penalty provision under new section 70 or Part 3-2 of
this new Act is taken to be a civil remedy provision. This is to allow
Fair Work Inspectors to exercise their powers to enter premises under
section 708 of the Fair Work Act (which refers to the power to enter
business premises if the inspector reasonably believes that there are
documents or records relevant to compliance purposes on the premises) and
their compliance powers under section 711 (power to ask for a person's name
and address, which only applies in situations where an inspector reasonably
believes that a person has contravened a civil remedy provision).
Section 715 of the Fair Work Act deals with enforceable undertakings
relating to contraventions of civil remedy provisions. However, employers
will not be able to make enforceable undertakings to remedy a contravention
of a civil penalty provision of this new Act. Therefore, it is not
necessary for Fair Work Inspectors to be able to exercise this power.
Section 716 of the Fair Work Act deals with compliance notices under that
Act.
Clause 143 - Referring matters to the Fair Work Ombudsman
This clause provides for the Secretary to refer matters to the Fair Work
Ombudsman for investigation. In the event of a dispute between an employer
and their employee regarding an obligation related to paid parental leave,
the Secretary would assist the employer and employee to resolve the
dispute. If the Secretary has reason to believe that an employer has not
complied with an obligation under new section 70 or new Part 3-2 in
relation to a person, and does not believe that the employer and the person
are able to resolve the matter themselves, the Secretary may refer the
matter to the Fair Work Ombudsman for investigation (subclause 143(1)), and
must inform both the employer and the person in writing of the referral
(subclause 143(2)).
In referring a matter to the Fair Work Ombudsman, the Secretary must give
the Fair Work Ombudsman information on any action taken, or information
obtained by the Secretary in relation to the matter. If the referral is in
relation to new section 70, 72 or 74 (which deal with unauthorised
deductions from instalments, when an employer pays instalments, and method
of payment of instalments by employer, respectively), then the Secretary
must also give the Fair Work Ombudsman the following information:
. the day on which the Secretary paid a PPL funding amount to the
employer for the person; and
. a copy of the notice given to the employer under new section 77 (that
is, a copy of the notice in relation to payment of the PPL funding
amount).
Clause 144 - Fair Work Ombudsman to notify of outcome of investigation
This clause requires the Fair Work Ombudsman to notify the Secretary in
writing of the outcome of an investigation on a matter that was referred to
Fair Work Ombudsman by the Secretary under new section 143. The note to
this clause also alerts the reader to the Fair Work Ombudsman's obligation,
at new section 158, to notify the Secretary of the outcome of a compliance
notice.
Division 3 - Civil penalty orders
This new Division identifies those provisions in the new Act which are
civil penalty provisions. The Secretary or the Fair Work Ombudsman can
apply to the Federal Court or the Federal Magistrates Court for a civil
penalty order in relation to a contravention of specified civil penalty
provisions in the bill (the Fair Work Ombudsman can only apply in relation
to a limited class of civil penalty provisions relating to new section 70
or Part 3-2 of the new Act). Civil penalty orders will operate in
conjunction with compliance notices and infringement notices in the
compliance framework for the paid parental leave scheme. The Secretary or
the Fair Work Ombudsman may apply to the Court for a civil penalty order in
relation to a contravention of a civil penalty provision for example, if a
person fails to pay a penalty in an infringement notice, or as an
alternative to giving an infringement notice.
Clause 145 - Involvement in contravention treated in same way as actual
contravention
This clause provides for a person's involvement in the contravention of a
civil penalty provision of this new Act to be treated in the same way as
actual contravention of a civil penalty provision. Subclause 145(2)
defines when a person is involved in a contravention. A person is involved
in a contravention if the person has: aided, abetted, counselled or
procured the contravention; has induced the contravention (whether by
threats, promises, or otherwise); has been in any way, by act or omission,
directly or indirectly knowingly concerned in or party to the
contravention; or has conspired with others to effect the contravention.
This clause would allow for a pecuniary penalty to be sought, for example,
against a person who is involved in the contravention, as well as the
person who actually contravenes a civil penalty provision.
Clause 146 - Civil penalty provisions
This clause sets out a table of the provisions in the new Act which are
civil penalty provisions. A provision listed in column 1 of the table is a
civil penalty provision, and column 2 provides a corresponding maximum
penalty in relation to a contravention of a civil penalty provision in
column 1. Items 6 to 8 and item 12 indicate a lesser maximum penalty
applies to a contravention of a civil penalty provision which deals with an
employer's obligation to give a person a record of payment (new section 80)
or keeping records (new subsections 81(1) and (2)), as well as to a
contravention of a compliance notice given in respect of one of those civil
penalty provisions. The penalties are consistent with maximum penalties
for a contravention of similar civil remedy provisions under the Fair Work
Act.
Clause 147 - Civil penalty orders
The Secretary or the Fair Work Ombudsman can apply to the Federal Court or
Federal Magistrates Court for a civil penalty order in relation to a
contravention of specified civil penalty provisions (the Fair Work
Ombudsman can only apply in relation to a limited class of civil penalty
provisions relating to new section 70 and new Part 3-2). The Court, if
satisfied that a person has contravened one or more civil penalty
provisions, may on application, order the person to pay to the Commonwealth
such pecuniary penalty as it determines appropriate in relation to each
contravention. Subclause 147(2) provides that such an order is a civil
penalty order. The note to subclause 147(1) directs the reader to subclause
147(3) for the maximum penalty that a court may order the person to pay.
Subclause 147(3) sets out the maximum penalty that the Court may order,
with reference to the maximum penalties in column 2 of the table in new
section 146. If a person is a body corporate, the pecuniary penalty that a
court could order in relation to a contravention of a civil penalty
provision must not be more than five times the maximum number of penalty
units for that civil penalty provision in column 2 of the table in new
section 146. (A penalty unit is defined in the dictionary as having the
same meaning as in section 4AA of the Crimes Act 1914).
For persons other than a body corporate, the maximum pecuniary penalty that
a court could order in relation to a contravention of a civil penalty
provision is the maximum number of penalty units corresponding to that
civil penalty provision in column 2 of the table in new section 146. For
example, the maximum penalty that a court could order in relation to a
contravention of new subsection 72(1) relating to when an employer must pay
an instalment of parental leave pay to a person is 300 penalty units for a
body corporate or 60 penalty units for an individual.
The Court has discretion to determine the amount of the pecuniary penalty
it considers appropriate. However, in doing so, the Court must take into
account all relevant matters. This includes those relevant matters
specified in paragraphs (a) to (e) of subclause 147(4).
A pecuniary penalty that a court orders under clause 147 is a civil debt
payable to the Commonwealth (subclause 147(5)), and which the Commonwealth
may enforce in a court as a judgment debt (subclause 147(6)).
Clause 148 - Proceedings may be heard together
This clause provides for the Federal Court of Australia or the Federal
Magistrates Court to hear two or more proceedings for a civil penalty order
together, if it considers this to be appropriate.
Clause 149 - Time limit for application for an order
This clause sets a time limit for the Secretary or the Fair Work Ombudsman
to apply for a civil penalty order in relation to a contravention of a
civil penalty provision. Proceedings for a civil penalty order may be
commenced no later than four years after the contravention.
Clause 150 - Civil evidence and procedure rules for civil penalty orders
Clause 150 provides that the Court, when hearing proceedings for a civil
penalty order, must apply the rules of evidence and procedure for civil
matters.
Clause 151 - Conduct contravening more than one civil penalty provision
This clause deals with the situation where certain conduct contravenes two
or more civil penalty provisions under the new Act. The Secretary or the
Fair Work Ombudsman could commence proceedings against a person in relation
to any one or more of those provisions. However, subclause 151(2) also
provides that the person is not liable for more than one pecuniary penalty
in relation to the same conduct.
Clause 152 - Civil proceedings after criminal proceedings
Clauses 152 to 155 deal with the interaction between civil proceedings and
criminal proceedings relating to substantially the same conduct.
Clause 152 prevents the Federal Court or Federal Magistrates Court from
making a civil penalty order against a person for a contravention of a
civil penalty provision if the person has been convicted of an offence
which is constituted by substantially the same conduct as the conduct
constituting the contravention of the civil penalty provision.
Clause 153 - Criminal proceedings during civil proceedings
Clause 153 provides that proceedings for a civil penalty order (defined in
subclause 153(2) as the civil proceedings) against a person for a
contravention of a civil penalty provision are stayed if criminal
proceedings are, or have already been, commenced against the person for an
offence constituted by substantially the same conduct as that alleged to
constitute the contravention of the civil penalty provision. If the person
is not convicted of the offence then the civil proceedings can be resumed.
Otherwise, this clause provides that the civil proceedings are dismissed
and costs must not be awarded in relation to the civil proceedings
(subclause 153(2)).
Clause 154 - Criminal proceedings after civil proceedings
This clause provides that criminal proceedings may be commenced against a
person after civil proceedings have commenced, whether or not a civil
penalty order has already been made against the person for substantially
the same conduct.
Clause 155 - Evidence given in proceedings for penalty not admissible in
criminal proceedings
This clause provides that evidence given by a person in civil proceedings
for a civil penalty order may not be used in criminal proceedings against
the person in relation to an offence constituted by substantially the same
conduct as that constituting the contravention. This rule does not,
however, apply to criminal proceedings relating to false evidence given by
the person in the civil proceedings (subclause 155(2)).
Clause 156 - Requirement for person to assist in application for civil
penalty orders
This clause enables the Secretary to request a person to provide all
reasonable assistance in connection with an application for a civil penalty
order, whether or not the application for the civil penalty order has been
made. Failure to comply with a written request for assistance is an
offence, attracting a penalty of 10 penalty units. The note to subclause
156(1) makes clear that this clause does not abrogate or affect the law
relating to legal professional privilege, or any other immunity, privilege
or restriction that applies to the disclosure of information, documents or
other things.
However, subclause 156(3) limits those people from whom the Secretary could
request assistance. The Secretary could only request a person's assistance
if it appears that the person is unlikely to have contravened the civil
penalty provision to which the application for the civil penalty order
relates; or committed an offence constituted by the same or substantially
the same conduct; and the Secretary suspects or believes that the person
could give relevant information. Subclause 156(3) provides that the
Secretary would also not be able to request the assistance of a person who
is or has been a lawyer for the person who is the subject of the
application for the civil penalty order.
Subclause 156(2) is included to clarify that the written request by the
Secretary is not a legislative instrument within the meaning of section 5
of the Legislative Instruments Act.
Subclause 156(5) that the Federal Court or the Federal Magistrates Court
may order a person to comply with subclause 156(1) in a specified way, and
that only the Secretary may apply to the court for an order under this
subclause.
This clause does not include a reference to the Fair Work Ombudsman because
Fair Work Inspectors have specific compliance powers under the Fair Work
Act, including powers to interview any person while on premises and to
require a person to produce a record or document, and which can be
exercised for the purpose of determining whether new section 70 or Part 3-2
of the new Act is being, or has been, complied with.
Division 4 - Compliance notices
This new Division provides the Secretary or the Fair Work Ombudsman with
the discretion to give a person a compliance notice in relation to a
contravention of a civil penalty provision. The Secretary and the Fair
Work Ombudsman can give a compliance notice in relation to different civil
penalty provisions in the new Act. The giving of a compliance notice is
one mechanism by which the Secretary or the Fair Work Ombudsman can seek to
enforce compliance with an employer's obligations in relation to the
payment of instalments of parental leave pay to a person where an employer
determination has been made for the employer and the person.
Clause 157 - Giving a compliance notice
This clause identifies those civil penalty provisions for which the
Secretary may give a compliance notice and those for which the Fair Work
Ombudsman may give a compliance notice. The Secretary may give a
compliance notice if the Secretary reasonably believes that a person has
contravened new subsection 82(2) (which deals with notifying the Secretary
if certain events happen); new section 103 (which deals with responding to
an employer determination); or new subsection 105(3) (which deals with
giving bank account and pay cycle information etc. after a review).
The Fair Work Ombudsman may give a person a compliance notice if the Fair
Work Ombudsman reasonably believes that the person has contravened new
subsection 70(2) (unauthorised deductions from instalments); new
subsection 72(1), (2) or (3) or new section 74 (which deal with when an
employer pays instalments, and the method of payment of instalments payable
by an employer); new section 80 (giving a person a record of payment); or
new subsection 81(1) or (2) (which deals with keeping records).
If clause 157 applies, subclause 157(3) provides that the Secretary or the
Fair Work Ombudsman may give the person a compliance notice requiring the
person, within 14 days of the day on which the notice is given, to take the
action set out in the notice to rectify the contravention and to produce
reasonable evidence that the person has complied with the notice.
Subclause 157(5) sets out further requirements as to the contents of a
compliance notice, which must also set out brief details of the
contravention; the name of the person to whom the notice is given; and the
name of the person who gave the notice; as well as explain that a failure
to comply with the notice may contravene a civil penalty provision.
Paragraph 157(5)(e) also provides for the notice to set out any other
matters that may be prescribed by the PPL rules.
Subclause 157(4) makes clear that a person must comply with a compliance
notice. The note to subclause 157(4) indicates that it is a civil penalty
provision, and directs the reader to new section 146. For example, if the
Secretary gave a compliance notice to a person in accordance with
clause 157 and a person does not comply with the compliance notice, the
Secretary could seek a civil penalty order in relation to a contravention
of subclause 157(4) (noting that a civil penalty order may also be sought
for contravention of the civil penalty provision for which the compliance
notice was given). Items 12 and 13 of the table in new section 146 set out
the maximum penalty for a contravention of subclause 157(4). A lesser
maximum penalty applies for a contravention of a compliance notice given in
relation to a contravention of new section 80 or new subsection 81(1) or
(2), to correspond with the lesser maximum penalty that applies to a
contravention of those provisions, as set out in items 6, 7 and 8 of the
table in new section 146.
Clause 158 - Fair Work Ombudsman to notify of outcome of compliance notice
This clause creates a requirement for the Fair Work Ombudsman to notify the
Secretary of the outcome of a compliance notice given to a person. For
example, the outcome of a compliance notice may be that a person has
complied with the notice by taking action to rectify the contravention; or
that a person has not complied with the notice. Notification of the
outcome of a compliance notice is directly relevant to revocation of an
employer determination for an employer and a person and the payment of
arrears of instalments of parental leave pay to the person in particular
circumstances.
If the Fair Work Ombudsman has notified the Secretary that an employer has
not complied with a compliance notice given for a contravention of new
section 70, 72 or 74 (which deal with unauthorised deductions, when an
employer pays instalments and method of payment of instalments payable by
employer) in relation to a person, then the Secretary must revoke the
employer determination for the employer and the person under new subsection
108(1), and pay arrears of instalments of parental leave pay to the person
as described in new section 86, if the other conditions in new
subsection 86(1) are met.
Division 5 - Infringement notices
Division 5 provides for the Secretary or the Fair Work Ombudsman to give
infringement notices in relation to contraventions of specified civil
penalty provisions. Infringement notices are another option for enforcing
compliance with employer obligations under the paid parental leave scheme,
as an alternative to seeking a civil penalty order for a contravention of a
civil penalty provision. A person who is given an infringement notice is
required to pay the pecuniary penalty specified in the notice, which is a
lesser penalty than that which a court would have the discretion to order
in proceedings under new Division 3.
Clause 159 - Giving an infringement notice
This clause sets out those civil penalty provisions for which the Secretary
may give an infringement notice and those for which the Fair Work Ombudsman
may give an infringement notice. (An infringement notice is defined by
reference to subclauses 159 (1) and (2).) The Secretary may give a person
an infringement notice if the Secretary reasonably believes that the person
has contravened one or more of the civil penalty provisions listed in
paragraphs (a) to (d) of subclause 159(1). These include those provisions
in relation to which the Secretary can give a compliance notice, as well as
new subsection 157(4), in relation to a compliance notice given to the
person by the Secretary. For example, if the Secretary reasonably believes
that a person has failed to comply with a compliance notice given in
relation to new subsection 82(2) (notifying the Secretary if certain events
happen), the Secretary may give the person an infringement notice.
The Fair Work Ombudsman has the discretion to give a person an infringement
notice if the Fair Work Ombudsman reasonably believes that the person has
contravened one or more of the civil penalty provisions set out in
paragraphs (a) to (f) of subclause 159(2). These provisions correspond to
those for which the Fair Work Ombudsman has the discretion to issue a
compliance notice under new section 157. In addition, the Fair Work
Ombudsman may also give an infringement notice in relation to a
contravention of new subsection 157(4) relating to a compliance notice
given to the person by the Fair Work Ombudsman.
Subclause 159(3) sets a time limit for the Secretary or the Fair Work
Ombudsman to give a person an infringement notice. If the infringement
notice relates to a failure to comply with a compliance notice, then the
infringement notice must be given within 12 months of the day on which the
compliance notice period (referred to in new subsection 157(3)) ends.
Otherwise, the infringement notice must be given within 12 months of the
day on which the alleged contravention of the civil penalty provision
occurred.
Subclause 159(4) sets out the requirements for the contents of an
infringement notice given in relation to a contravention of a civil penalty
provision. This includes a statement to the effect that the matter or
matters will not be dealt with by a Court if the penalty specified in the
notice is paid within 28 days after the notice is given or such longer
period as the Secretary allows. If the person does not pay the penalty,
the Secretary or the Fair Work Ombudsman could commence proceedings for a
civil penalty order against the person in relation to the contravention.
Subclauses 159(5) and (6) provide for the amount of a penalty to be
specified in an infringement notice given to a body corporate, and to a
person other than a body corporate, respectively. The amount of the
penalty in an infringement notice is one tenth of the maximum pecuniary
penalty that a court could order a person to pay in proceedings for a civil
penalty order in relation to the contravention. Lesser penalties apply if
the infringement notice is given in relation to a contravention of new
section 80 (giving person record of payments) or new subsection 81(1) or
(2) (keeping records) or in relation to a contravention of a compliance
notice given in respect of new section 80 or new subsection 81(1) or (2).
Clause 160 - Withdrawal of an infringement notice
This clause provides the Secretary and the Fair Work Ombudsman with the
discretion to withdraw, by written notice, an infringement notice given to
a person. Subclauses 160(1) and (2) clarify that the Secretary may
withdraw an infringement notice that has been given by the Secretary, and
the Fair Work Ombudsman may withdraw an infringement notice that has been
given by the Fair Work Ombudsman.
Clause 160 would allow the Secretary or the Fair Work Ombudsman to withdraw
an infringement notice, for example, where further evidence is provided
after the infringement notice is given to suggest that a person has not
contravened a civil penalty provision, or alternatively that further
evidence suggests that the contravention is more serious than initially
believed and would be more appropriately dealt with by proceedings for a
civil penalty order rather than an infringement notice.
An infringement notice must be withdrawn within 42 days after it was given
to the person. Subclause 160(4) extends this timeframe in circumstances
where the person to whom the infringement notice has been given has applied
to the Federal Court for judicial review of an employer determination. The
timeframe for an effective withdrawal is extended in this situation to deal
with the possibility that an infringement notice is given to a person in
relation to a contravention of new subsection 105(3) (giving bank account
and pay cycle information etc. after a review) and the Secretary later
becomes aware that the person has subsequently applied to the Federal Court
for judicial review of an employer determination.
Subclause 160(5) also provides that the amount of a penalty in an
infringement notice must be refunded to a person if the penalty is paid
before the infringement notice is withdrawn.
Clause 161 - What happens if the penalty is paid
This clause clarifies the effect of payment of a penalty in an infringement
notice on a person's liability for a civil penalty in relation to the
alleged contravention of a civil penalty provision. If a person is given
an infringement notice in relation to the civil penalty; the penalty in the
infringement notice is paid in accordance with the infringement notice; and
the infringement notice is not withdrawn, then the person's liability for
an alleged civil penalty is discharged. Subclause 161(2) then prevents
proceedings from being brought against the person under new Division 3 for
a civil penalty order in relation to the contravention.
Clause 162 - Effect of this Division on civil proceedings
This clause clarifies the relationship between infringement notices and
proceedings for a civil penalty order in relation to a contravention of a
civil penalty provision under the new Act. New Division 5 does not affect
the person's liability to have proceedings brought by the Secretary or the
Fair Work Ombudsman for a civil penalty order under new Division 3 if: the
person does not comply with an infringement notice relating to the
contravention; an infringement notice is not given to the person; or an
infringement notice is given to the person and later withdrawn (paragraph
162(b)).
In addition, this clause clarifies that new Division 5 does not require an
infringement notice to be given in relation to an alleged civil penalty
(paragraph 162(a)), nor does it limit the Court's discretion regarding the
amount of a pecuniary penalty that it could order a person to pay for a
contravention of a civil penalty provision, in proceedings under new
Division 3 (paragraph 162(c)).
Clause 163 - Further provision in relation to infringement notices
This clause allows for the PPL rules to provide further in relation to
infringement notices.
Part 4-3 - Debt recovery
Division 1 - Guide to this Part
Clause 164 - Guide to this Part
This clause outlines the scope of new Part 4-3.
Division 2 - Main debts recoverable under this Act
Clause 165 - Debts due to the Commonwealth
This clause provides that, if an amount has been paid by way of parental
leave pay or a PPL funding amount, it is only considered a debt due to the
Commonwealth if a provision of this new Act or the Data-matching Program
(Assistance and Tax) Act 1990 expressly provides that it is. The note
provides guidance as to the new sections under which debts can be raised.
Clause 166 - Parental leave pay instalment debts - instalments paid by
employer
This clause sets out when an overpayment of an instalment of parental leave
pay paid by an employer to an employee is a debt to the Commonwealth.
This clause applies if an employer receives more parental leave funding
than they are required to pay to their employee and the excess amount is
paid by the employer to the employee. In this situation, the excess amount
paid to, or in relation to, the employee by way of instalment(s) of
parental leave pay is a debt owed by the employee to the Commonwealth.
The reference to 'in relation to' covers any amounts that have been
deducted or withheld from an instalment of parental leave pay payable to
the employee.
The note after subclause 166(1) provides that, if the payability
determination is set aside or varied after the instalments are paid to the
employee, then instalments may stop being payable retrospectively.
Therefore, debts can be raised from the date that the instalment stopped
being paid.
The example after subclause 166(2) provides that, if an instalment is not
payable to a person, the debt is the total amount paid to, or in relation
to, the employee from the employer.
Subclause 166(3) sets out when a parental leave pay instalment debt arises.
If the person has a PPL period, then the debt arises at the end of the PPL
period. A PPL period can end in different circumstances, including that
the period has run for 18 weeks or that parental leave pay ceases to be
payable to a person because they are no longer eligible for instalment
payments. In any other case, the debt arises when subclause 166(1) applies
in relation to an amount paid to the person. That is when an excess amount
has been paid to the employee.
The first note clarifies that, if a person never has a PPL period because a
payability determination has not been made, or if the payability
determination has been varied or set aside, then, as soon as there is an
instalment excess, this amount becomes a debt under this provision.
Note 2 provides that an amount a person receives that exceeds their
payability amount may be a debt if amounts are mistakenly paid.
Clause 167 - Parental leave pay instalment debts - instalments paid by
Secretary
This clause is similar to new section 166 but applies if the Secretary pays
a person by way of instalment an amount that exceeds the amount that the
person is payable. The amount that has been overpaid to the person is a
debt due to the Commonwealth.
Clause 168 - PPL funding amount debts - amounts not paid as parental leave
pay instalments
This clause applies if the amounts paid to an employer by way of a PPL
funding amount exceeds the amount paid by the employer to the person to
whom, or in relation to, an instalment is payable (other person). The
reference to 'in relation to' covers any amounts that have been deducted or
withheld from an instalment of parental leave pay payable to the person.
The excess is a debt due to the Commonwealth by the employer. The example
given clarifies that, if the employer does not pay any amount to the other
person, then the total PPL funding amount paid to the employer is a debt to
the Commonwealth.
Subclause 168(3) sets out when a debt arises under this clause. If the
employee has a PPL period for a child, the debt arises at the earlier of
either when the Secretary pays arrears to the person by making one or more
instalment payments or immediately after the end of the person's PPL
period. In any other case, the debt arises when the PPL funding amount
paid to the employer exceeds the amounts paid to the other person.
The notes at the end of this clause clarify how this provision is intended
to apply. Note 1 provides that, if a person never has a PPL period because
a payability determination has not been made or has been set aside, then,
as soon as there is an excess referred to in subclause 168(1), this amount
becomes a debt under this provision.
Note 2 provides that this clause may apply to overpayments of PPL funding
amounts or amounts that are mistakenly paid. This may occur because of
administrative error or the revocation or setting aside of an employer
determination.
Clause 169 - Wrong person receives parental leave pay instalment or PPL
funding amount
This clause provides that, if an instalment of parental leave pay or a PPL
funding amount (the PPL amount) is paid and a person (the wrong recipient)
other than the person (the right recipient) to whom the amount is payable
receives the amount and this is not authorised by the right recipient, the
amount becomes a debt.
Subclause 169(2) provides that the amount received by the wrong recipient
is a debt due to the Commonwealth by the wrong recipient if the original
payment is made by the Secretary. If the original payment is made by the
employer, the amount is a debt due by the wrong recipient to the employer.
Note 1 provides that the Secretary or the employer is obliged to pay the
right recipient the amount of the PPL payment that is payable to them.
Note 2 provides that, where the amount is paid by the Secretary into the
wrong recipient's bank account, the Secretary may, under the 'recovery from
an ADI' provision in new section 192, recover the amount.
Clause 170 - Joint and several liability for debts arising because of false
and misleading statements
A person (the recipient) and another person are jointly and severally
liable to pay a debt if the recipient receives an unauthorised amount
because they made a false or misleading statement (contravened Part 7.4 of
the Criminal Code), and the other person is convicted of an offence because
they were involved in the action that resulted in the payment of the
unauthorised amount.
Clause 171 - Debts under the Data-matching Program (Assistance and Tax) Act
1990
This clause provides for the recovery of an amount that has been paid to a
person by way of a parental leave pay instalment if the amount is a debt
due to the Commonwealth under subsection 11(6) of the Data-matching Program
(Assistance and Tax) Act 1990.
Division 3 - Parental leave pay recoverable by employees from employers
Clause 172 - PPL funding amount debts - debts owing by employers to
employees
This clause provides that, if an employer receives a PPL funding amount and
they do not pay any or all of this amount to the employee, or in relation
to the employee, to whom an instalment is payable, then the amount that has
not been paid is a debt due to the employee by the employer and is
recoverable by the employee in a court of competent jurisdiction.
Division 4 - Debt notices and interests on debts
Clause 173 - Debt notices - initial notice
Clause 173 provides that a notice must be sent to a person who has a debt
due to the Commonwealth. The notice will advise the person of: the date of
the notice; if the debt relates to a PPL funding amount - the name of the
person to whom or in relation to whom the instalment is payable; the reason
the debt was incurred; the period to which the debt relates; the
outstanding amount of the debt at the time of the notice; the day the
outstanding amount is due and payable; options available for repayment of
the debt; and the contact details for inquiries concerning the debt.
It will also advise the person that the debt is due and payable on the 28th
day after the date of the notice.
The effect of subclause 173(3) is that, where it is desirable or
convenient, the notice referred to in subclause 173(1) and that provided
for by new section 174 may be sent at the same time and may be sent as a
single notice. An example of where that approach might be considered
desirable would be cases of customers who have previously incurred debts
and have failed to comply with an arrangement to repay that debt. In those
circumstances, it might be considered desirable to issue simultaneously the
notice of the debt and the notice advising of the new interest charge and
administrative charge scheme in an attempt to encourage early entry into a
repayment arrangement.
Where that approach is adopted, the effect is simply that the debtor has
received the clause 173 notice and the new section 174 notice
simultaneously. This approach has no adverse consequences for a person who
owes a debt as the person cannot become liable to pay interest at an
earlier time than he or she would have been so liable if the notices had
been sent (and received) separately.
Clause 174 - Debt notices - further debt notice if repayments not made
A further notice may also be sent pursuant to clause 174, where the debt
has not been wholly paid. This notice may be sent where a debtor has not
entered into an arrangement to repay a debt or, having entered an
arrangement, fails to comply with that arrangement.
Subclause 174(2) provides that the notice must state the date on which the
further notice under clause 174 was issued; the effects of the provisions
set out in the notice provisions in new paragraph 135(1)(b) to (g); the
amount that is outstanding at the date of the further notice; the effect of
the provisions providing for the interest charge and administrative charge;
and how interest under new section 179 is to be calculated.
Importantly, a person can only incur an interest charge if the person has
received a clause 174 notice.
The note clarifies the giving of the further notice within the initial
notice under new subsection 173.
Clause 175 - Interest on debts - when interest becomes payable
This clause sets out when interest will be payable. The effect of
subclause 175(1) is that interest cannot be incurred unless the person has
received a further notice under new section 174.
Subclause 175(2) defines the term 'final payment day' for the purposes of
this clause. The final payment day is the later of: the 90th day after
the day on which the debt became due and payable; or the 28th day after the
date of the further notice given under new section 176; or, if there has
been an application for review of the decision to give the initial or
further notice in new section 173 or 174, then 90 days after the day the
authorised review officer made the decision.
It is only where debtors fail to enter an arrangement or, having entered an
arrangement, fail to comply with the arrangement that interest can be
payable. The emphasis is on encouraging debtors to negotiate arrangements
to repay debts from an early stage, not on trying to collect interest on
outstanding amounts of debts.
Subclause 175(3) deals with situations where a debtor has not entered into
an arrangement to repay a debt on or before the final payment day and the
Secretary has notified the person that the person will be required to pay
interest. Subclause 175(4) provides that, in these circumstances, the
debtor is liable to pay interest from the day after the final payment day
until the debt is wholly paid at the penalty interest rate as set out in
new section 180.
Subclause 175(5) deals with situations where a debtor has entered into an
arrangement but subsequently has failed to comply with the arrangement and
the Secretary has notified the person under new section 174 that the person
will be required to pay interest. Two different scenarios are relevant
here.
Paragraph 175(6)(a) is concerned with the situation where a person has
entered an arrangement and, before the final payment day, the person fails
to comply with the arrangement. In those circumstances, the debtor is
liable to pay interest from the day after the final payment day. Paragraph
175(6)(b) is concerned with the situation of where a person fails to comply
with an arrangement at any time after the final payment day. In those
situations, the debtor is liable to pay interest from the day after the day
in respect of which, in accordance with the arrangement, the last payment
was made in respect of the debt. For example, a person has a payment
arrangement and they make a payment on 1 March, but then fail to make their
next payment on 1 April. In this situation, the debtor is liable to pay
interest from 2 March, that being the day after the day the last payment
was made.
Subclause 175(7) provides that a person will not have to pay interest on
any part of a debt that has been incurred because of administrative error
of the Commonwealth.
Clause 176 - Interest on debts - application
Clause 176 provides for how repayments made by a debtor will be allocated
where interest is payable on the debt and an amount is paid for the purpose
of paying the debt and interest (new section 175 refers). Repayments will
first be used to reduce the original debt - that is, excluding any amount
of interest that has become a recoverable debt. Once the original debt has
been repaid, future payments by the debtor will be used in satisfaction of
the interest that became payable on the original debt.
Clause 177 - Interest on debts - recovery as a debt
Clause 177 provides that any amount of interest that becomes payable is a
debt due to the Commonwealth.
Clause 178 - Interest exemption determinations
Clause 178 creates a discretion for the Secretary to determine that
interest is not payable, or is not payable in respect of a particular
period. The purpose of this provision is to facilitate efficient and cost
effective recovery of outstanding debts by providing flexibility in
repayment negotiations.
Subclause 178(2) provides when an exemption determination may occur but is
not limited by the examples in this subclause. The kind of circumstance
where it is anticipated that this discretion could be used is: where a
decision to impose the penalty is made on an assumption that is
subsequently shown to have been incorrect; where the charge is applied as a
result of clerical or system error; or where a person has been advised that
he or she will be required to pay interest and the person subsequently
enters into, and complies with, an arrangement under new section 190.
Under paragraph 178(3)(a), an interest exemption determination may apply to
a period before the making of the determination. Paragraph 178(3)(b)
provides that a determination under subclause (1) may be subject to the
person complying with specified conditions.
Subclause 178(4) requires that, where a person has received notification
under new section 174 that they are required to pay interest and the
Secretary makes a determination under clause 178 that interest is not
payable, the Secretary must give the person written notice of that latter
determination.
Subclause 178(5) provides that, where a person contravenes a condition
without reasonable excuse, the determination that interest is not payable
ceases to have effect from and including the day on which the contravention
(or, if there has been more than one contravention, the earliest
contravention) occurred.
Accordingly, subclause 178(6) states that the Secretary may cancel or vary
the determination by written notice to the person.
Clause 179 - Administrative charge
This clause provides for an administrative charge to be incurred when a
debtor first becomes liable to pay interest in respect of a particular
debt. That is, an administrative charge may only be incurred on one
occasion in respect of any particular debt. Subclause 179(2) states that,
where a person incurs an administrative charge, that amount is a debt due
to the Commonwealth by the person.
Clause 180 - Penalty interest rate
Subclause 180(1) sets the penalty interest rate at 20 per cent per year,
unless the Minister prescribes in the PPL rules, under subclause 180(2), a
rate of interest that is lower than 20 per cent per year.
Subclause 180(3) provides that the Minister may prescribe in the PPL rules
guidelines about the operation of the penalty interest provisions in this
new Act.
Division 5 - How the Commonwealth can recover debts
Clause 181 - Debts to which Division 5 applies
Clause 181 provides that new Division 5 only applies to debts that are due
to the Commonwealth under this new Act. The note lists the provisions that
allow for debts to be raised and which are recoverable under this new
Division.
Clause 182 - How to recover debts
This clause specifies the means by which a debt owed by a person may be
recovered. Clause 182 specifies that, if a debt is owed by a person, it
may be recovered by means of: legal proceedings; garnishee notice; debt
payment arrangement; in limited circumstances, from deductions with consent
from the instalments of another person to whom parental leave pay is
payable; recovery from an ADI; or deductions or setting off in relation to
a payment to which a person is entitled under another Act. The note
further clarifies that deductions and setting off may occur under the
social security law, family assistance law and Veterans' Entitlement Act
1986.
Clause 183 - Legal proceedings
Clause 183 provides that, where a parental leave pay debt or a PPL funding
amount debt is recoverable by the Commonwealth by means of legal
proceedings, the debt may be recovered in a court of competent
jurisdiction.
The note clarifies that there are time limits set on recovery by legal
proceedings as set out in new section 189.
Clause 184 - Garnishee notices - general
Clause 184 provides for recovery of a debt that is recoverable by the
Commonwealth by means of a garnishee notice.
Subclause 184(1) provides that the Secretary may serve written notice on
another person (not the debtor) who owes money to the debtor or is holding
money for the debtor. The notice requires the person to pay the
Commonwealth the amount that is covered by subclause 184(2). The note
clarifies that the conditions on the payment of money due to the original
debtor are to be ignored if subclause 184(3) applies. Note 2 clarifies
that there are time limits set on recovery by legal proceedings as set out
in new section 189.
Subclause 184(2) provides that the person to whom the notice is given would
be required to pay to the Commonwealth the amount stated in the notice that
should not exceed the amount required to be paid by the third person to the
debtor. Payment to the Commonwealth may be demanded as a lump sum, or,
where the third person makes ongoing payments to the debtor, by instalment
expressed as a set amount or percentage figure.
Clause 184(3) provides that, where a condition has to be fulfilled before
money becomes due to the person being served with the notice, the money is
taken to have become due, for the purposes of this new section, even if the
condition has not been fulfilled.
Subclause 184(4) provides that the notice should stipulate a time within
which payment must be made. However, payment must not be demanded before
the money becomes due or is held by the other person, or before the end of
the period of 14 days after the notice is given.
Subclause 184(5) provides that a copy of the garnishee notice must be given
to the debtor.
Clause 185 - Garnishee notices - amounts paid in compliance
Subclause 185(1) provides that a payment made to the Commonwealth in
compliance with a garnishee notice is taken to be made with the authority
of either the debtor or of any other person concerned.
Subclause 185(2) deals with the situation where a garnishee notice is
served on someone and another person pays an amount in reduction of the
debt. In these circumstances, the Secretary is to notify the person who
received the garnishee notice that an amount has been paid and the amount
stated in the notice is to be reduced by the amount already paid.
Clause 186 - Garnishee notices - debt for failure to comply with notice
Clause 186 deals with the situation in which a person who is given a
garnishee notice (the garnishee) in respect of a debt due by another person
(the original debtor) fails to comply with the notice to the extent that he
or she is capable of complying with it.
In this situation, subclause 186(2) creates a debt due to the Commonwealth
by the garnishee for the amount of the outstanding debt calculated under
subclause 186(3).
Subclause 186(3) specifies that the amount of the debt outstanding is the
lesser of: as much of the amount specified in the garnishee notice under
new section 184 as the garnishee debtor was able to pay; or as much of the
debt due by the original debtor at the time when the notice was given as
remains due from time to time.
Subclause 186(4) provides that, if the Commonwealth recovers the whole or
part of the debt due by the garnishee debtor under subclause 186(2), or the
whole or part of the debt due by the original debtor, then both debts are
reduced by the amount that the Commonwealth has so recovered.
Consequently, the amount stated in the garnishee notice under new
section 184 is taken to be reduced by the recovered amount.
Subclause 186(5) provides that this clause applies in spite of any law of a
State or Territory that would have made the amount inalienable.
Clause 187 - Garnishee notices - offence for non-compliance
Clause 187 makes it an offence for a person not to comply with a garnishee
notice, to the extent that the person is able to comply with the notice.
The penalty for such non-compliance is set at imprisonment for 12 months.
Clause 188 - Garnishee notices - relationship with other laws
Subclause 188 stipulates that new sections 184 and 187 apply to money in
spite of any law of a State or Territory (however expressed) under which
the amount is inalienable.
Clause 189 - Legal proceedings and garnishee notices - time limits for debt
recovery
Clause 189 stipulates a general limitation period for recovery of a debt by
way of legal proceedings or garnishee notice of six years, beginning on the
day on which the Commonwealth becomes aware, or could reasonably be
expected to become aware, of the circumstances that gave rise to the debt.
The general limitation period can be extended if within the six years:
some of the debt owed is paid; the person acknowledges that he or she does
in fact owe the amount of the debt to the Commonwealth; if debt recovery
action has been commenced; or following internal Departmental action such
as reviewing a file or taking action to recover a debt.
In these circumstances, the limitation period on the Commonwealth taking
action by way of legal or garnishee proceedings, for recovery is six years
from the day that any of the actions mentioned above occurs.
Clause 190 - Payment of debts by arrangement
This clause enables the Secretary to decide that a person may enter into an
arrangement to repay the debt by means of instalments. Subclause 190(2)
provides that the Secretary's decision is to take effect on the day stated
in the arrangement. If no day is stated, the decision is to take effect on
the day the arrangement is entered into (subclause 190(3)).
Subclause 190(4) provides that the Secretary may end or alter an
arrangement: at the debtor's request; after giving 28 days' notice to the
debtor; or without notice where the debtor has not provided material
information about their capacity to repay the debt.
Clause 191 - Deductions from instalments payable to another person
Clause 191 reduces a primary claimant's debt if an amount is deducted under
new subsection 67(2) from an instalment to a secondary claimant for the
recovery of a debt due to the Commonwealth by the primary claimant. For
example, if a primary claimant has incorrectly been paid an instalment
after the end of their PPL period and the secondary claimant is their
current partner, the excess amount paid to the primary claimant can be
recovered by deductions from the secondary claimant's first instalment
payment if the secondary claimant agrees.
If clause 191 applies, the Secretary may deduct an amount from the
secondary claimant's instalment. This will reduce the primary claimant's
debt by an amount equal to the amount that is deducted from the secondary
claimant's instalment. If the secondary claimant withdraws their consent,
this clause stops applying.
Clause 192 - Recovery from an ADI
Clause 192 provides for the recovery of certain amounts directly from an
ADI.
The effect of clause 192 is that, where the Secretary is satisfied that an
instalment of parental leave pay or a PPL funding amount has been made to
the account of a person who was not intended to obtain the instalment or
PPL funding amount, the Secretary may, by written notice, require the ADI
to pay the amount of the payment to the Commonwealth within a specified
period. The period specified must be a reasonable period. Significantly,
where the amount of the payment exceeds the amount that remains in the
account when the notice is given, the obligation imposed on the ADI is to
repay only the amount remaining in the account.
The effect of subclause 192(3) is that, where a payment (or payments) is
made to the account of a person who has died before the payment (or
payments) was made, the Secretary may, by written notice, require the ADI
to pay the amount of the payment (or payments) to the Commonwealth within a
specified period. The period specified must be a reasonable period.
Significantly, where the amount of the payment (or payments) exceeds the
amount that remains in the account when the notice is given, the obligation
imposed on the ADI is to repay only the amount remaining in the account.
Subclause 192(4) makes it an offence for an ADI to fail to comply with the
notice, to the extent that the institution is capable of complying with it.
Subclause 192(5) provides that any amount that has been paid by an ADI to
the Commonwealth pursuant to this clause is to be deducted from any debt
owed to the Commonwealth by any other person in respect of an instalment or
PPL funding amount.
Division 6 - Writing off debts
Clause 193 - When debts can be written off
Clause 191 specifies that the Secretary may decide to write off a debt on
behalf of the Commonwealth in relation to a stated period or otherwise.
The note assists by setting out the provisions that allow for debts to be
raised.
New subclause 193(2) provides that write-off may occur where: the debt is
irrecoverable at law, the debtor has no capacity to repay the debt; after
all reasonable efforts have been made to locate the debtor, the debtor's
whereabouts are unknown; or it is not cost effective for the Commonwealth
to take action to recover the debt.
Subclause 193(3) specifies when a debt is taken to be irrecoverable at law.
This occurs when (and only when): the debt cannot be recovered, under new
Division 5 (for example, the relevant time limits have elapsed); it would
be impossible to sustain legal proceedings for the recovery of the debt
because there is no proof of the debt; the debtor is discharged from
bankruptcy or administration and the debt was incurred before the
bankruptcy or before the person entered into administration and was not
incurred by fraud; or the debtor has died leaving no estate or insufficient
funds in the debtor's estate to repay the debt.
A person has the 'capacity to repay the debt' in paragraph 193(2)(b) if the
debt can be recovered by deduction or setting off from an entitlement under
this new Act or another Act unless recovery by those means would cause the
person severe financial hardship.
A decision to write off a debt takes effect as set out in subclause 193(6).
If a day is specified in the decision, the decision takes effect on the
day stated in the decision. If the decision does not state such a day,
then the decision takes effect on the day on which the decision is made.
It should be noted that subclause 193(7) specifies that nothing in
clause 193 prevents the subsequent recovery of a debt that has been written
off under this new section.
Division 7 - Waiver of debts
Clause 194 - Waiver of debts - general
Subclause 194(1) provides that new Division 7 only applies to debts that
are recoverable by the Commonwealth under this new Act. The note assists
by setting out the provisions that allow for debts to be raised.
Clause 194 covers the waiver of the whole or the part of a debt and this
can only occur in accordance with new Division 7.
A waiver of debt takes effect in accordance with subclause 194(3). Under
this subclause, if a day is specified in the decision, the waiver takes
effect on the day stated in the decision. However, if the decision does
not state such a day, then the decision to waive takes effect on the day on
which the decision was made.
Clause 195 - Waiver of debts - administrative error
The Secretary must waive the right to recover the proportion of a debt that
is attributable to administrative error if: the debtor received in good
faith the payment or payments that gave rise to the administrative error
proportion of the debt; and the person would suffer severe financial
hardship if it were not waived.
For the purposes of this new section, the administrative error proportion
of the debt may be 100 per cent of the debt.
Clause 196 - Waiver of debts - arising from offence
This clause applies where a person has incurred a debt, been convicted of
an offence in relation to the debt, and had a longer custodial sentence
imposed on them because they were unable or unwilling to pay the debt. In
such a case, the Secretary must waive the right to recover the proportion
of the debt that arose in connection with the offence.
For the purpose of this provision, references to 'a proportion of a debt'
can be taken to include the entire debt.
Clause 197 - Waiver of debts - small debts
Clause 197 applies to small debts, which are defined as being, or being
likely to be, less than $200. If a debt is less than $200 and it is not
cost effective for the Commonwealth to take action to recover the debt, the
Secretary must waive the right to recover the debt.
However, if the debt is at least $50 and could be recovered by deductions
from the debtor's entitlement under another law such as the family
assistance law or the social security law, then it should be recovered.
Clause 198 - Waiver of debts - settlement of civil actions
This clause relates to the waiver of debts where there has been a
settlement agreed, either through civil action or before the Administrative
Appeals Tribunal.
Subclause 198(1) applies to settlement of civil action and subclause 198(2)
applies to settlement of proceedings before the Administrative Appeals
Tribunal. If the Commonwealth agrees to settle, then the Secretary must
waive the right to recover the difference between the debt and the amount
that is the subject of the settlement.
If the debtor has repaid at least 80 per cent of the original value of the
debt, and is unable to repay a greater proportion of the debt, the
Commonwealth and the debtor may agree that the amount recovered is in full
satisfaction of the debt. In such a case, subclause 198(3) provides that
the Secretary must waive the remainder of the debt.
Where there is an agreement between the Secretary and a debtor to the
effect that the debtor's debt will be fully satisfied if the debtor pays
the Commonwealth an agreed amount less than the amount of the debt
outstanding at the time of the agreement, subclause 198(4) provides that
the Secretary must waive the right to recover the difference between the
unpaid amount and the agreed amount. However, subclause 198(5) provides
that the Secretary must not make an agreement to which subclause 198(4)
applies unless: the Secretary is satisfied that the agreed amount is at
least the 'present value of the unpaid amount' repaid in instalments whose
amount and timing is determined by the Secretary; and it would take at
least a year to recover the unpaid amount under new Division 5 if subclause
198(4) did not apply.
The term 'present value of the unpaid amount' is defined in clause 198(6).
Clause 198(6) provides that a determination for the purposes of the
definition of 'settlement interest' will be prescribed in the PPL rules.
Clause 199 - Waiver of debts - special circumstances
The Secretary is provided with a discretionary power in clause 199 to waive
a debt in special circumstances. This power may be exercised where the
debt did not arise as a result of a false statement or false representation
being knowingly made, or a person knowingly failing or omitting to comply
with the new Act. In addition, there must be special circumstances (aside
from financial hardship alone) which make it desirable to waive the debt,
and, finally, it must be more appropriate to waive the debt than to write
it off.
Clause 200 - Waiver of debts - determined classes
Clause 200 states that the Minister may specify, by legislative instrument,
a class of debts that the Secretary may, on behalf of the Commonwealth,
waive the Commonwealth's right to recover. Subclause 200(2) provides that
the instrument may specify conditions to be met before the Secretary waives
the debt and limits on the debts to be waived.
A decision under clause 200 will take effect as specified by
subclause 200(3). According to this subclause, if a day is specified in
the decision, it will take effect on the day stated in the decision
(regardless of whether that day is before, after or on the day on which the
decision is made). However, if the decision does not state such a day,
then the decision would take effect on the day on which the decision is
made.
Division 8 - Miscellaneous
Clause 201 - Overseas application of debts
Clause 201 extends the application of new Part 4-3 (except for new
section 171) to acts, omissions, matters and things done outside Australia
and to all people irrespective of their nationality or citizenship. The
note reminds the reader that new section 173 provides for debts under the
Data-matching Program (Assistance and Tax) Act 1990.
Chapter 5 - Review of decisions
Part 5-1 - Internal review of decisions
Division 1 - Guide to this Part
Clause 202 - Guide to this Part
This clause outlines the scope of new Part 5-1.
Part 5-2 - Internal review of decisions
Division 2 - Internal review of decisions
Clause 203 - Internal review - own-initiative review by Secretary
This clause provides for the Secretary to review a decision of an officer
under this new Act, on his or her own initiative, if the Secretary is
satisfied that there is enough reason to do so.
Subclause 203(2) provides that the Secretary may not review, on his or her
initiative, a decision of an officer under new section 101 to make an
employer determination. The reason for excluding employer decisions from
review by the Secretary on his or her own initiative is that the Secretary
must revoke an employer determination under new section 108 where the
Secretary is satisfied that a condition for making the employer
determination was not satisfied when the determination was made.
Note 1 clarifies that an employer may seek a review of a decision to make
an employer determination (new section 207 refers).
Note 2 points out to the reader that new section 108 deals with revocation
of employer determinations.
The Secretary may review a decision, whether or not a person has applied
for a review and even if an application for review has been made to the
Social Security Appeals Tribunal (SSAT) or the Administrative Appeals
Tribunal (AAT). Having reviewed the decision, the Secretary may affirm or
vary the decision or set aside the decision and substitute a new decision.
A reference in subclause 203(1) to a decision of an officer under this new
Act includes a reference to a determination that the Secretary is taken,
because of a provision of this new Act, to have made (subclause 203(5)).
Clause 204 - Internal review - own-initiative review and tribunal review
If the Secretary makes a decision under subclause 203(4) and at that time
the person (or the Secretary) has already applied to the SSAT for a review
of the decision that the Secretary was also reviewing, the Secretary must
give a written notice of the decision to the Principal Member of the SSAT.
Similarly, if the Secretary makes a decision under subclause 203(4) and, at
that time, the person (or the Secretary) has already applied to the AAT for
a review of the decision that the Secretary was also reviewing, the
Secretary must give a written notice of the decision to the Registrar of
the AAT.
Clause 205 - Internal review - review following application
This clause provides that the Secretary or an authorised review officer
must, if an application is made under new section 206, 207 or 208, review
the decision and either affirm or vary the decision or set aside the
decision and substitute a new decision. The authorised review officer must
not, however, review a decision under subclause 205(1) where the Secretary
has exercised his or her power under new section 263 (settlement of
proceedings before the AAT).
Clause 206 - Internal review - application for review of claimant decision
Subclause 206(1) provides for the scope of this clause. The new section
applies to a decision of an officer under this new Act, unless the decision
is a decision under new Part 3-2 (payment of instalments by employer), a
decision under new Part 3-5 (employer determinations), a decision under new
Part 4-2 (compliance), or a decision under the PPL rules or regulations if
the PPL rules or regulations state that this new section does not apply to
the decision.
Subclause 206(2) provides that a reference in subclause 206(1) to a
decision of an officer under this new Act includes a reference to a
determination that the Secretary is taken to have made because of a
provision of this new Act.
Subclause 206(3) provides that a decision to which this new section applies
is a claimant decision.
Subclause 206(4) provides that a person whose interests are affected by a
claimant decision may apply to the Secretary for review of the decision if
the decision was not made personally by a PPL agency head.
Subclause 206(5) provides that an application under subclause 206(4) may
only be made within 28 days after the day the decision was made or, if the
Secretary is satisfied that a longer period should apply, then within the
longer period.
Example
A woman makes a claim for parental leave pay. She meets all
eligibility criteria and estimates her adjusted taxable income (for
the previous income year) to be $160,000. She is advised that she is
not eligible for parental leave pay as her income is too high. Two
months later, the woman's accountant asks her if she has claimed
parental leave pay. He calculates her adjusted taxable income (for
the previous income year) and she realises that she had incorrectly
estimated her adjusted taxable income. She also understands that she
can seek review on the basis that:
. her actual adjusted taxable income is below the income limit;
and
. she is still within the 12-month period from the date of birth
of the baby.
If she had become aware, say, 16 months after the baby's birth that
her actual adjusted taxable income is lower than the income limit, she
would not be able to seek review.
Subclause 206(6) provides that a person, in their capacity as an employer,
cannot make an application under subclause 206(4).
Clause 207 - Internal review - application for review of employer
determination decision
Subclause 207(1) applies to a decision of an officer under new section 101
to make an employer determination.
Subclause 207(2) provides that a reference in subclause 207(1) to a
decision of an officer under this new Act includes a reference to a
determination that the Secretary is taken to have made because of a
provision of this new Act.
Subclause 207(3) provides that an employer may apply, in writing, to the
Secretary for review of an employer determination decision that relates to
the employer if the employer believes that:
a) a condition in new paragraph 101(1)(b) or (c) is not satisfied in
relation to the employer determination and the employer has not made
an election under new section 109 that applies to the person; or
b) a condition in new paragraph 101(1)(d) or (e) is not satisfied in
relation to an employer determination.
Note 1 reminds the reader that the conditions in new paragraphs 101(1)(b)
to (e) relate to the employment by an employer of someone to whom parental
leave pay is payable.
Note 2 clarifies the application of new section 109. It also clarifies how
new subsection 103(2) applies new paragraphs 101(1)(b) and (c) if the
employer has made an election under new section 109.
Under subclause 207(4), the employer cannot make an application under
subclause 207(3) if the employer determination decision was made personally
by a PPL agency head.
Subclause 207(5) provides that an application for review of an employer
determination under subclause 207(3) may only be made within the 14-day
period referred to in new section 103. It is the Government's intention
that parental leave pay be paid to parents when they need it most, which is
usually soon after the birth of their baby, or adoption of their child. In
order to achieve this, the Family Assistance Office and employers will be
required to work closely together so that payments can be made from, or as
soon as possible after, a parent's nominated start date. The legislation
provides that, where an employer wants to seek review, they may do so, but
they must act within 14 days so as not to delay parental leave pay
payments.
The note clarifies that, under new section 103, if an employer
determination has been made, the employer is required either to give the
Secretary a notice accepting the determination or to apply for a review of
the employer determination within a 14-day period.
Subclause 207(6) provides that an application under subclause 207(3) must
specify which condition or conditions the employer believes are not
satisfied, and whether an election applies to the person; be signed by a
person authorised by the employer. It must also be accompanied by
documentary evidence supporting the application, or a statutory declaration
supporting the application if the employer is unable to provide documentary
evidence (for instance, where the employer does not have any records about
the claimant as the claimant was never employed by the employer).
Subclause 207(7) provides that, for the purposes of making an application
under subclause 207(3), the disclosure of personal information is taken to
be authorised by law for the purposes of the Privacy Act and any provision
of a law of a State or Territory that provides that personal information
may be used or disclosed if the use or disclosure is authorised by law.
This clause is intended to cover situations where the employer may have to
disclose personal information about one of its employees (such as that a
particular person no longer works for the employer) in order to be able to
apply for a review of the employer determination.
Clause 208 - Internal review - application for review of employer funding
amount decision
Subclause 208(1) provides that this new section applies to a decision of an
officer under new section 75 to pay a PPL funding amount to an employer.
Subclause 208(2) provides that a reference in subclause 208(1) to a
decision of an officer under this new Act includes a reference to a
determination that the Secretary is taken to have made because of a
provision of this new Act.
Subclause 208(3) provides that a decision to which this new section applies
is a employer funding amount decision.
Subclause 208(4) provides that an employer may apply, in writing, to the
Secretary for review of an employer funding amount decision that relates to
the employer if the employer believes that the Secretary has failed to
comply with new subsection 75(3) in relation to the decision and the
decision was not made personally by a PPL agency head.
This note reminds the reader that new subsection 75(3) requires the
Secretary to pay a PPL funding amount to an employer within a certain time.
Subclause 208(5) provides that an application for review under
subclause 208(4) must be signed by a person authorised by the employer.
Subclause 207(6) provides that an application under subclause 208(4) for a
review in relation to a PPL funding amount may only be made within 14 days
after the day of the second payroll cut-off referred to in new subsection
75(3) in relation to the PPL funding amount. For example, an employer may
seek a review where the Secretary has not paid enough (or any) of a PPL
funding amount to the employer to enable the employer to pay an instalment
of parental leave pay that is payable to an employee. The reason for a 14-
day time limit for employers is to ensure that claimants do not experience
delays in the payment of parental leave pay payments (see the explanation
provided in subclause 208(6) above).
Clause 209 - Internal review - withdrawal of application
This clause provides for a person or an employer to withdraw their
application for internal review at any time before the review has been
completed. An application (other than an application under new section
207) that is withdrawn is taken to have not been made. An application may
be withdrawn orally or in writing or in any other manner approved by the
Secretary.
Clause 210 - Internal review - when decision made on review comes into
force
Subclause 210(1) provides that a decision under new subsection 203(4) or
new paragraph 205(1)(b) (the review decision) to vary a decision or set
aside a decision and substitute a new decision comes into operation on the
day that would give full effect to the review decision. For example, for a
claimant who has been determined to be ineligible at week 30 after becoming
the child's primary carer and who is successful in a review decision made
in week 50, parental leave pay may be payable from week 30, although, in
reality, parental leave pay for the past period would be paid from week 50
at the earliest. This ensures that the claimant can receive the full 18
weeks parental leave pay.
On the other hand, if a claimant has been determined to be ineligible at
week 50 after becoming the child's primary carer and that decision is
overturned on review, the claimant is only eligible to receive payments for
two weeks (that is, from week 50 to week 52).
Subclause 210(2) provides that a decision comes into operation immediately
on the giving of the decision if it is a decision under new subsection
203(4) or new paragraph 205(1)(b) to vary an employer determination
decision or an employer funding amount decision or set aside such a
decision and substitute a new decision.
Clause 211 - Internal review - notice of decision on review of claimant
decision
Subclause 211(1) provides that this new section applies if a person (the
decision-maker) makes a decision under new subsection 203(4) or new
paragraph 205(1)(b) in relation to a claimant decision.
Subclauses 211(2) and (3) specify who must be given a written notice of the
decision.
Subclause 211(4) provides that the notice must include a statement to the
effect that the person may apply to the SSAT for review of the decision
and, if the person is dissatisfied with the SSAT's decision, the person may
apply to the AAT for review of the SSAT's decision.
Subclause 211(5) provides that subclause 211(4) does not apply in relation
to a decision referred to in new subsection 215(2). The note points out to
the reader that new subsection 215(2) excludes certain claimant decisions
from SSAT review.
Subclause 211(6) provides that a notice may also, if the decision-maker
considers it appropriate, include a statement setting out the reasons for
the decision, the findings by the decision-maker on material questions of
fact, and reference to the evidence or other material on which those
findings were based. This subclause gives the Secretary a discretion as to
how much further information or evidence to give to each person whose
interests are affected by the decision. This provision will allow the
decision-maker to inform others likely to be affected by the decision, of
the decision itself. This does not mean that reasons for the decision will
be provided to all affected parties. In most cases, affected parties will
be advised that a decision has been made, how it may affect them and, where
appropriate, their options or rights.
Clause 212 - Internal review - notice of a decision relating to employer
Subclause 212(1) applies if a decision-maker makes a decision under new
subsection 203(4) or new paragraph 205(1)(b) in relation to the any of the
decisions listed, including any other decision under this new Act that
directly affects the interests of an employer.
Subclause 212(2) provides that, to avoid doubt, new paragraph 212(1)(f)
does not apply to a decision if the only effect of the decision on the
interests of an employer is that the decision could result in an employer
determination for the employer being made, varied, set aside or revoked.
Subclause 212(3) provides that a written notice of the decision must be
given to the employer concerned.
Subclause 212(4) provides that the notice must include a statement setting
out the reasons for the decision, the findings by the decision-maker on
material questions of fact and the evidence or other material on which
those findings were based.
Subclause 212(5) provides that the notice must include a statement to the
effect that the employer may apply to the SSAT for review of a decision
referred to in new paragraph 212(1)(a) or (1)(c).
Part 5-2 - Review by the Social Security Appeals Tribunal
Division 1 - Guide to this Part
Clause 213 - Guide to this Part
This clause outlines the scope of new Part 5-2.
Clause 214 - SSAT objective under this Act
This clause requires the SSAT to pursue, in carrying out its functions, the
objective of providing a mechanism of review that is fair, just,
economical, informal and quick.
Division 2 - Review by SSAT of claimant decisions
Clause 215 - Application of this Division
This clause lists those decisions to which this new Division applies and
does not apply. A decision to which this new Division applies is an SSAT
reviewable claimant decision.
Clause 216 - SSAT review of claimant decision - application for review
Subclause 216(1) provides that a person whose interests are affected by an
SSAT reviewable claimant decision may apply to the SSAT for review of the
decision. The note refers the reader to new section 217 for making an
application.
Subclause 216(2) provides that an application under subclause 216(1) may
only be made within 28 days after the day the SSAT reviewable claimant
decision was made or, if the SSAT is satisfied that a longer period should
apply, then within the longer period.
Example
A mother says she is the primary carer and claims parental leave pay.
The separated father challenges this determination. He is successful
and the mother is advised of the outcome - that she is not eligible
for parental leave pay. She may apply for a review of this decision
to the SSAT within 28 days after the day the SSAT reviewable claimant
decision was made. This rule also provides some flexibility for
parents by allowing them to make an application to the SSAT after the
28-day period, if the SSAT is satisfied that a longer period should
apply.
Subclause 216(3) provides that a person, in their capacity as an employer,
cannot make an application under subclause 216(1).
Clause 217- SSAT review of claimant decision - making of application
This clause provides that applications to the SSAT for review of an SSAT
reviewable claimant decision may be made in writing and sent to an office
of the SSAT, the Department or an office of the Commonwealth Services
Delivery Agency or Medicare Australia. Alternatively, an application can
be made orally at, or by telephoning, an office of the SSAT. If a person
receives an oral application, the person is required to make a written
record of that application, including the date of the application. Such a
written record is deemed to be a written application delivered to the SSAT
on the day of the oral application. An application may include a statement
of reasons for seeking a review of the decision.
Clause 218 - SSAT review of claimant decision - review following
application
This clause provides that, if a person applies to the SSAT for review of an
SSAT reviewable claimant decision, the SSAT must either affirm or vary the
decision or set aside the decision and substitute a new decision or send
the matter back to a PPL agency head for reconsideration in accordance with
any directions or recommendations of the SSAT.
Clause 219 - SSAT review of claimant decision - powers of the SSAT
This clause provides that the SSAT may exercise all the powers and
discretions that are conferred by the new Act (including the PPL rules) on
the Secretary for the purposes of reviewing a decision under this new
Division.
Clause 220 - SSAT review of claimant decision - when SSAT decision comes
into force
This clause provides that a decision of the SSAT under this new Division to
vary a decision or set aside a decision and substitute a new decision comes
into force on the day that would give full effect to the SSAT's decision.
Clause 221 - SSAT review of claimant decision - variation of decision
before review completed
Subclause 221(1) provides that any variation by an officer to an SSAT
reviewable claimant decision that is being reviewed by the SSAT does not
deprive the SSAT of its jurisdiction to hear the matter. The application
to review the decision proceeds as if it were an application for review of
the varied decision.
Subclause 221(2) makes a similar provision to subclause 221(1) except that
it applies where an officer sets an SSAT reviewable claimant decision aside
and substitutes a new one.
Subclause 221(3) provides that subclause 221(4) applies (which provides
that a person may either proceed with the application for review of the
decision as varied or the new decision, or withdraw the application under
new section 251) where a decision is varied. or set aside and substituted.
by an officer while the application for review is before the SSAT. This
provision contemplates cases where an applicant will be satisfied with the
decision after it is varied or set aside and there will be no longer any
reason to proceed with the review by the SSAT.
Clause 222 - SSAT review of claimant decision - parties to review
Subclause 222(1) specifies who may be a party to a review. It provides
that, in addition to the applicant and the Secretary, the CEO of the
specified agency may be a party in cases where an officer of their agency
has made the claimant decision that is subject to review and any other
person who has been made a party to the review under subclause 222(3).
Subclause 222(2) provides that any person (other than a person who is an
employer) whose interests are affected by a decision that is the subject of
an application for review may apply in writing to the Principal Member to
be made a party to the review.
Subclause 222(3) provides that the Principal Member may order that that
person be joined as a party to the review.
Subclause 222(4) provides that the Principal Member may direct that a party
no longer be a party to the review if:
a) the party consents; or
b) the Principal Member is satisfied, after having communicated with the
party or after having made reasonable attempts to communicate with the
party and having failed to do so, that the party does not intend to
participate in or proceed with the review; or
c) the party fails to comply with a direction or order of the SSAT or of
the Principal Member given in relation to the review; or
d) the party fails to attend the hearing.
Division 3 - Review by SSAT of employer decisions
Clause 223 - Application of this Division
This clause lists those decisions to which this new Division applies. A
decision to which this new Division applies is an SSAT reviewable employer
decision.
Clause 224 - SSAT review of employer decision - application for review
Subclause 224(1) provides that an employer may apply to the SSAT for review
of an SSAT reviewable employer decision that relates to the employer and a
person if the decision is an employer determination decision and the
employer believes:
a) a condition in new paragraph 101(1)(b) or (c) is not satisfied in
relation to the employer determination and the employer has not made
an election under new section 109 that applies to the person; or
b) a condition in new paragraph 101(1)(d) or (e) is not satisfied in
relation to an employer determination,
Note 1 refers to new section 225 for making an application.
Note 2 points out to the reader that the conditions in new
paragraphs 101(1)(b) to (e) relate to the employment by an employer of
someone to whom parental leave pay is payable.
Note 3 clarifies the application of new section 109. It also clarifies how
new subsection 101(2) applies new paragraphs 101(1)(b) and (c) if the
employer has made an election under new section 109.
Under subclause 224(2), an employer may apply to the SSAT for review if the
decision relates to an employer funding amount decision. The note refers
to new section 225 for making an application.
An application may only be made within 14 days after the day on which the
SSAT reviewable employer decision was made.
Clause 225 - SSAT review of employer decision - making of application
This clause provides that applications to the SSAT for review of an SSAT
reviewable employer decision may be made in writing and sent to an office
of the SSAT. The application must be in the form approved by the Principal
Member; specify the conditions or conditions that the employer believes are
not satisfied and, if new paragraph 224(1)(a) applies, the application must
state whether the employer believes that an election applies to the person;
be accompanied by a statutory declaration verifying the application and be
accompanied by any other documents. An application may include a statement
of reasons for seeking a review of the decision.
Clause 226 - SSAT review of employer decision - review following
application
This clause provides that, if an employer applies to the SSAT for review of
an SSAT reviewable employer decision, the SSAT must either affirm or vary
the decision, or set aside the decision and substitute a new decision, or
send the matter back to a PPL agency head for reconsideration in accordance
with any directions or recommendations of the SSAT.
Clause 227 - SSAT review of employer decision - powers of the SSAT
This clause provides that the SSAT may exercise all the powers and
discretions that are conferred by the new Act on the Secretary for the
purpose of reviewing a decision under this new Division.
Clause 228 - SSAT review of employer decision - when SSAT decision comes
into force
This clause provides that a decision of the SSAT under this new Division
comes into force immediately on the giving of the decision.
Clause 229 - SSAT review of employer decision - variation of decision
before review completed
Subclause 229(1) provides that any variation by an officer to an SSAT
reviewable employer decision that is being reviewed by the SSAT does not
deprive the SSAT of its jurisdiction to hear the matter. The application
to review the decision proceeds as if it were an application for review of
the varied decision.
Subclause 229(2) makes a similar provision to subclause 229(1) except that
it applies where an officer sets an SSAT reviewable employer decision aside
and substitutes a new one.
Subclauses 229(3) and (4) provide that a person may either proceed with the
review or withdraw the application where a decision is varied or set aside
and substituted by an officer while the application for review is before
the SSAT. This provision contemplates cases where an applicant will be
satisfied with the decision after it is varied or set aside and there will
be no longer any reason to proceed with the review by the SSAT.
Clause 230- SSAT review of employer decision - parties to review
This clause sets out the parties to a review by the SSAT under this new
Division.
Part 5-3 - Procedures for review by the Social Security Appeals Tribunal
Division 1 - Introduction
Clause 231 - Guide to this Part
This clause outlines the scope of new Part 5-3.
Division 2 - Preliminary procedures
Clause 232 - Procedure on receipt of application for review by SSAT
Subclause 232(1) provides that, where an application for review by the SSAT
is sent to an office of the Department, the Commonwealth Services Delivery
Agency or Medicare Australia, the Secretary is responsible for ensuring
that it is sent to the Principal Member as soon as practicable, but, in any
case, no later than seven days after the Department or agency received it.
Subclause 232(2) provides that the Principal Member must give both the
applicant and the Secretary written notice that an application has been
received.
Subclause 232(3) requires the Secretary to provide the SSAT with a
statement about the decision under review. The statement must set out the
findings of fact, refer to the evidence and give the reasons for the
decision.
The Secretary is also required to provide the Principal Member with all
documents relevant to the decision under review. This will, in practice,
be a transfer of the applicant's file. These requirements have to be
complied with within 28 days of the Secretary receiving a notice of the
application for review.
Subclause 232(4) provides that, where the Principal Member asks the
Secretary to send the statement and documents earlier than the date
specified in subclause 232(3), the Secretary must take all reasonable steps
to comply with this request. The Principal Member may issue a request
under this subclause in cases in which financial hardship could occur
pending the determination of the appeal.
Subclause 232(5) provides for the situation where relevant documents come
into the Secretary's possession after the statement has been prepared and
sent, with the file, to the Principal Member. The Secretary is required to
send a copy of the later documents to the Principal Member as soon as
practicable after receiving them.
Subclause 232(6) applies to the number of copies of documents that the
Secretary must provide to the Principal Member, if the Secretary is
required to give the Principal member a document.
Clause 233 - Parties to be given statements about the decision under review
Subclause 233(1) requires the Secretary to give, within 28 days after
receiving the notice under new subsection 232(2), each party to the review
a copy of the statement and documents referred to in new subsection 232(3).
Subclause 233(2) requires the Secretary to give, as soon as practicable
after the Secretary sends a document under new subsection 232(5), each
party to the review a copy of the document.
Subclause 233(3) enables the Principal Member to direct the person
receiving a copy of the statement or document (under new subsections 233(1)
or (2)) not to disclose any information from the statement or document or
any information other than as specified in the direction.
Subclause 233(4) provides that a person commits an offence if the person
engaged in conduct and the conduct contravenes a direction given under
subclause 233(3). A penalty of imprisonment for two years applies for a
failure to comply with the direction.
Clause 234 - Arrangements for hearing of application
This clause requires the Principal Member to fix a date, time and place for
the hearing of an application for review and give to the applicant and any
other parties to the review written notice about the details of the hearing
a reasonable time before the date fixed.
Clause 235 - Notice of application to person affected by SSAT reviewable
claimant decision
Subclause 235(1) provides that reasonable steps must be taken by the
Principal Member to give written notice of the application to another
person (other than a person who is an employer) whose interests are, in the
Principal Member's opinion, affected by the decision.
Subclause 235(2) requires the above notice, which may be given at any time
before the review is determined, to be in writing and also to set out the
person's right to apply to be joined as a party under new section 222.
Under subclause 235(3), each party is to be given a copy of the notice.
Division 3 - Submissions from parties other than PPL agency heads
Clause 236 - Division does not apply in relation to PPL agency heads
This clause provides that this new Division does not apply in relation to a
party to a review of a decision who is a PPL agency head.
Clause 237 - Submissions to SSAT
Subclause 237(1) allows a party to the review to make submissions either
orally or in writing or in both.
Note 1 points out to the reader that the Principal Member may direct that a
hearing be conducted without oral submissions (new section 238 refers).
Note 2 points out to the reader that a hearing may also proceed without
oral submissions from a party in the circumstances set out in new section
239.
Subclause 237(2) allows a party to have another person make submissions to
the SSAT on his or her behalf.
Subclause 237(3) enables the Principal Member to determine to accept
submissions by the party or their representative by telephone or other
electronic communications equipment.
Subclause 237(4) outlines some of the situations where the Principal Member
may decide that submissions may be made by telephone or other electronic
communications equipment.
Subclause 237(5) provides that, if a party is not proficient in English,
the Principal Member may direct that communication proceed through an
interpreter.
Clause 238 - SSAT hearings on written submissions only
Subclause 238(1) provides that the Principal Member may direct that the
hearing proceed without oral submissions from the parties if the Principal
Member considers that the review could be determined fairly on the basis of
the parties' written submissions and all parties' consent.
Subclause 238(2) provides that, if the Principal Member gives a direction
that the hearing is to proceed without oral submissions, the Principal
Member must give each of the parties to the review a written notice
informing them of that direction, invite each party to make written
submissions, and specify the address to which such submissions are to be
delivered and by when. Parties must be given a reasonable period to make
written submissions (subclause 238(3)).
Despite subclause 238(1), the SSAT, as constituted for the hearing, may, if
it considers necessary after taking into account the written submissions,
make an order allowing the parties to make oral submissions
(subclause 238(4)).
Clause 239 - SSAT hearings without oral submissions by party
Subclause 239(1) provides that the SSAT may proceed without oral
submissions from a party where that party has advised that he or she does
not intend making oral submissions.
Subclause 239(2) provides that the Principal Member may authorise the SSAT
to proceed without oral submissions from a party or the party's
representative (as the case may be) where the Principal Member had decided
to have oral submissions from that party or the party's representative by
telephone or other electronic communications equipment, and the Principal
Member had made all reasonable efforts to contact the party or the party's
representative but was unable to do so.
Subclause 239(3) provides that the Principal Member may authorise the SSAT
to proceed without oral submissions from a party or a party's
representative (as the case may be) where there has been no determination
that submissions from that party or the party's representative may be made
by telephone or other electronic communications equipment and the party
does not attend the hearing.
Subclause 239(4) provides that the SSAT may proceed to hear the application
where the Principal Member has given an authorisation under
subclause 239(2) or (3).
Subclause 239(5) allows the Principal Member to revoke an earlier
authorisation made under subclause 239(2) or (3). This may arise where
contact is made with a party after the authorisation was made.
Division 4 - Submissions from PPL agency heads
Clause 244 - Submissions from PPL agency heads
Subclause 240(1) provides that a PPL agency head who is a party to a review
of a decision may make written submissions.
Subclause 240(2) provides that the PPL agency head may, by writing, request
the Principal Member for permission to make oral submissions, or both oral
and written submissions, to the SSAT. The request must explain how such
submissions would assist the SSAT.
Subclause 240(3) provides that the Principal member may, by writing, grant
the request if such submissions would, in the opinion of the Principal
Member, assist the SSAT, taking into account the objective laid down by new
section 214.
Subclause 240(4) provides that the Principal Member may order the PPL
agency head to make oral submissions, or both oral and written submissions,
to the SSAT if such submissions would, in the opinion of the Principal
Member, assist the SSAT, taking into account the objective laid down by new
section 214.
Subclause 240(5) provides that, for the purposes of subclauses 240(3) and
(4), the Principal Member may determine that oral submissions are to be
made by telephone or by means of other electronic communications equipment.
Subclause 240(6) provides that subclause 240(5) does not limit
subclause 240(3) or (4).
Division 5 - Other evidence provisions
Clause 241 - Evidence on oath or affirmation
This clause enables the SSAT to take evidence on oath or affirmation for
the purposes of a review of a decision.
Clause 242 - Provision of further information by Secretary
This clause enables the Principal Member to ask the Secretary to provide
any further information or a document that is in the Secretary's possession
that is relevant to the review. The Secretary must comply as soon as
practicable, and in any event within 14 days.
Clause 243 - Exercise by Secretary of information-gathering powers
This clause enables the Principal Member to ask the Secretary to exercise
the Secretary's powers under new section 117 if the Principal Member is
satisfied that a person has information, or has custody or control of a
document, that is relevant to the review. The Secretary must comply as
soon as practicable, and, in any event, within seven days after the request
is made.
Clause 244 - Power to obtain information
Subclause 244(1) provides that, if the Principal Member reasonably believes
that it is necessary for the purposes of a review, he or she may, by
written notice, direct a person, within the period and in the manner
specified in the notice to give information or documents that are relevant
to the review or to attend before the SSAT and answer questions at a
reasonable time and place specified in the notice.
Subclause 244(2) provides that the period for giving the information or
documents must be at least 14 days after the notice is given.
Subclause 244(3) creates an offence if the person engages in conduct and
the conduct contravenes a direction under subclause 244(1). The penalty is
imprisonment for six months.
Subclause 244(4) provides that a notice must set out the effect of the
provisions listed in this subclause.
Subclause 244(5) provides that a person who is required to attend a hearing
is allowed reasonable expenses, as specified in the determination, that
were incurred for travel and accommodation in relation to the hearing.
This covers such things as transport costs, and accommodation costs if the
person is required to be away from home for one or more nights.
Subclause 244(6) provides that the costs, in relation to a determination
made by the SSAT under subclause 244(5), are payable by the Commonwealth.
Division 6 - Pre-hearing conferences
Clause 245- Pre-hearing conferences
This clause empowers the Principal Member to convene a conference before
the hearing of the review if they consider that it would assist in the
conduct and consideration of that review. At the pre-hearing conference,
the Principal Member may fix a day, or days, for the hearing, give
directions about the time within which submissions are to be made, give
directions about the time within which evidence is to be brought, and give
directions about what evidence is to be brought before the tribunal.
Subclause 245(3) provides that paragraph 245(2)(d) does not limit the
evidence that may be brought before the SSAT.
Further, the Principal Member may make an order directing a party who is
present at a conference not to disclose information obtained at the
conference (subclause 245(4) refers).
A breach of the non-disclosure direction made under subclause 245(4) will
be a criminal offence, punishable by imprisonment for two years.
Clause 246 - Powers of SSAT if parties reach agreement
This clause provides that, if:
. parties to a review reach agreement about all or part of the review;
and
. before the hearing commences, they lodge written and signed terms of
agreement; and
. the SSAT has the power to make a decision in line with the agreement;
then the SSAT can make a decision in accordance with the terms of agreement
without the need to hold a hearing.
If the terms of the agreement relate to only part of the matter to be
reviewed, then the SSAT can make those terms part of their decision and not
deal with those aspects of the review in the balance of the hearing.
Division 7 - The hearing
Clause 247 - Hearing procedure
This clause provides that the SSAT is not bound by technicalities, legal
forms or rules of evidence, and must act as speedily as possible but still
ensure that the review receives proper consideration, having regard to the
objective set out in new section 214. The SSAT is also free to inform
itself on any matter relevant to a review in any manner it considers
appropriate.
Clause 248 - Hearing in private
Subclause 248(1) sets out the general rule that the hearing of a review
must be in private.
Subclause 248(2) provides the Principal Member with a discretion to issue
directions in writing or otherwise as to who may be present at any hearing
of a review.
Subclause 248(3) provides that the Principal Member, in exercising his or
her discretion under subclause 248(2), must have regard to the wishes of
the parties and the need to protect their privacy.
Clause 249 - Restrictions on disclosure of information obtained at hearing
Subclause 249(1) gives the Principal Member a power to direct, in writing,
that people who are admitted to the privacy of a hearing are not to
disclose the information gained in the course of the hearing except as
specified in the direction.
Subclause 249(2) provides that a person commits an offence if the person
engages in conduct that contravenes a direction. Penalty for such a
contravention is two years' imprisonment.
Division 8 - Other procedural matters
Clause 250 - Adjournment of SSAT hearings
Subclause 250(1) gives the SSAT the power to adjourn a hearing from time to
time.
The factors that may, among others, be relevant to a decision to refuse to
adjourn are set out in subclause 250(2).
Clause 251 - Withdrawal of application for review
Subclause 251(1) provides that an applicant for a review of a decision may
withdraw the application at any time.
Subclause 251(2) provides that, where the withdrawal is in writing, it may
be sent to an office of the Department, or the SSAT, or an office of
another agency where the Secretary has approved the office for this
purpose, and, where the withdrawal is oral, it may be communicated to the
SSAT either personally or by telephone.
Subclause 251(3) requires the person to whom the oral withdrawal is
communicated to make a written record of that withdrawal, including the
date of the withdrawal.
Subclause 251(4) provides that, where the withdrawal is sent or delivered
to an office of a Commonwealth agency, the head of the agency must send the
Principal Member a written notice of the withdrawal. This must be done as
soon as practicable and, in any case, within seven days.
Clause 252 - Dismissal of an application
Subclause 252(1) gives the Principal Member the power to dismiss an
application where he or she is satisfied that the applicant does not intend
to proceed with the application, either after the applicant has
communicated an intention not to proceed with the application, or if the
Principal Member has made reasonable attempts to contact the applicant and
there has been no contact.
Subclause 252(2) states that an application dismissed under
subclause 252(1) is taken to have been withdrawn on the date of the
dismissal.
Clause 253 - Presiding member at SSAT hearing
This clause provides that, if the SSAT is constituted by two or more
members, the Principal Member must designate one of those members as the
member who must preside at the hearing of the review.
Without specifically providing for what is to occur in the case of one
member panels, it is intended that, where the SSAT is constituted by only
one member, that member would be the presiding member.
Clause 254 - Decision of questions before SSAT
This clause provides that clause 253 is to apply only if the SSAT is
constituted by two or more members.
Clauses 256 and 254 make it explicit that these provisions only apply in
the case of multi-member panels. This is to avoid any possible
interpretation that the legislation presumes there must always be two or
more members on a panel.
Clause 255 - Directions as to procedure for hearings
This clause provides for directions to be given as to the procedures to be
adopted by the SSAT for reviews. Subclause 255(1) provides that the SSAT
Principal Member may give both general directions as to the procedure to be
followed by the SSAT, and directions in relation to a particular review.
Such directions must not be inconsistent with any provision of this new Act
(see subclause 255(2)), and may be given before or after the hearing of a
particular review has commenced (see subclause 255(3)). The power for the
Principal Member to issue general directions may be necessary to stipulate
specific procedures for hearings, the responsibilities of the parties to
the proceedings and their representatives and to provide information and
direction to assist the SSAT in the effective conduct of review. For
example, the directions may include rules relating to documentary and other
evidence and how, in what form and when it is to be provided The
directions may also include matters relating to recording the proceedings
and requests for adjournments in proceedings. Similar directions have been
issued by the Principal Member in relation to child support appeals under
section 103ZA of the Child Support (Registration and Collection) Act 1988.
The presiding member of the SSAT as constituted for a particular review may
also give directions for that review (see subclause 255(4)). As with
directions given by the Principal Member, such directions must not be
inconsistent with this new Act, but, in addition, must not be inconsistent
with any directions given under subclause 255(1) (see subclause 255(5)).
Directions may be given before or after the hearing of a particular review
has commenced (see subclause 255(6)). Directions given under this clause
must be consistent with the SSAT's objective of providing review that is
fair, just, economical, informal and quick (see subclause 255(7)).
A general direction made under new paragraph 255(1)(a) is a legislative
instrument under the Legislative Instruments Act (see subclause 255(8)). A
direction made under new paragraph 255(1)(b) or subclause 255(4) is not a
legislative instrument (see subclause 255(9)). This provision is included
to assist readers, as the instrument is not a legislative instrument within
the meaning of section 5 of the Legislative Instruments Ac 2004t.
Clause 256 - Costs of review
Subclause 256(1) sets out the general rule that each party must bear their
own expenses incurred in relation to the review.
Subclause 256(2) provides that the SSAT may specify in a determination that
a party must be reimbursed by the Commonwealth for reasonable costs that
are incurred by the party for travel and accommodation expenses in relation
to the review.
Subclause 256(3) provides that the SSAT may determine that the Commonwealth
pay the costs of a medical service that the SSAT arranges for a party to a
review.
Subclause 256(4) provides that costs associated with a determination made
by the SSAT under subclause 256(2) or (3) are payable by the Commonwealth.
Division 9 - Notice of decision
Clause 257 - Procedure following SSAT decision
Subclause 257(1) provides that, within 14 days after making the decision,
the SSAT must prepare a written statement (the initial statement), which
sets out the decision of the SSAT, and give this statement to all parties.
Also within 14 days after making the decision, the SSAT must do either of
the following:
i) give reasons for the decision orally to each party to the review.
In doing so, the SSAT must explain that the party may make a
written request for a written statement referred to in
subparagraph 257(1)(c)(ii) (a statement of reasons) within 14 days
after the initial statement is given to the party; or
ii) give to each party a written statement that sets out the reasons
for the decision and the findings on any material questions of
fact, and refers to the evidence or other material on which the
findings are based (a statement of reasons). This statement may be
provided as part of the initial statement.
Further, the SSAT must return to the Secretary any documents provided by
the Secretary, and give copies of any other documents that contain evidence
or material on which the findings of fact are based.
Subclause 257(2) provides that, if the SSAT does not give a statement of
reasons (that is, it chooses to give reasons orally), either party may,
within 14 days after the initial statement is given to the party, make a
request for a statement of reasons. This request must be in writing.
Subclause 257(3) provides that a PPL agency head may also make a written
require for a written statement referred to in subparagraph 257(1)(c)(ii)
if the SSAT has not given such a statement to the PPL agency heard and if a
person applies to the AAT under new section 261 for review of the SSAT
decision on the review referred to in subclause 257(1).
Subclause 257(4) provides that the SSAT must comply with the request under
subclause 257(2) or (3) within 14 days after the day on which the SSAT
receives the request.
Subclause 257(5) provides that, if the SSAT varies or sets aside a SSAT
reviewable claimant decision or an SSAT reviewable employer decision, the
SSAT must prepare a written statement that sets out the decision of the
SSAT, the reasons for the decision, the findings on any material questions
of fact and refers to the evidence or other material on which the findings
of fact are based. The SSAT must also give each party to the review a copy
of the statement within 14 days after making the decision, return to the
Secretary any document that the Secretary provided to the SSAT and give the
Secretary a copy of any document that contains evidence or material on
which the findings of fact are based.
Subclause 257(6) provides that, when the SSAT determines a review in
relation to an SSAT reviewable claimant decision, the Principal member must
give each party to the review (other than a PPL agency head) a written
notice that includes a statement to the effect that, if the party is
dissatisfied with the decision of the SSAT, application may be made to the
AAT for review of the decision, subject to the Administrative Appeals
Tribunal Act 1975 (the AAT Act).
Subclause 257(7) provides that a failure to comply with subclause 257(6)
does not affect the validity of the decision.
Division 10 - Correction of errors in decisions or statements of reasons
Clause 258 - Correction of errors in decisions or statements of reasons
Subclause 258(1) provides that, if the presiding member at a review, or the
Principal Member, is satisfied that there is an obvious error in the text
or written statement of reasons for an SSAT decision, either the presiding
member or the Principal Member may alter the text of the decision or
statement of reasons.
Subclause 258(2) provides that the altered text of a decision, or
statement, is taken to be the decision or the statement of reasons of the
SSAT.
Subclause 258(3) provides examples of what might constitute obvious errors
in the text of a decision or statement of reasons, such as obvious clerical
or typographical errors, or inconsistency between the decision and the
statement. These examples are not intended to be exhaustive.
Division 11 - Appeals and references of questions of law from the SSAT to
the Federal Court
Clause 259- Appeals and references of questions of law in relation to SSAT
review of employer decisions
Subclause 259(1) provides that this clause applies to proceedings before
the SSAT for review of an SSAT reviewable employer decision.
Subclause 259(2) provides that the object of this clause is to allow SSAT
employer proceedings to be subject to judicial review as if they were
proceedings before the AAT.
Subclause 259(3) provides, to achieve the objective of subclause 259(2),
for appeals to the Federal Court from SSAT employer proceedings, on a
question of law from any decision of the SSAT or on a question of law
arising in those proceedings to be referred.
Subclause 259(4) provides for modification of the AAT Act. This subclause
provides that, without limiting subclause 259(3), Part IVA of the AAT Act
applies in relation to SSAT employer proceedings as if:
a) references to the AAT in that Part were references to the SSAT;
b) paragraph 44(2A)(a) of the AAT Act allowed an appeal to be instituted
within the time prescribed, or further time allowed, by rules of court
made under the Federal Court of Australia Act 1976;
c) the reference to President in paragraph 45(1)(a) of the AAT Act were a
reference to the Principal Member; and
d) any other necessary changes were made.
Note 1 points out to the reader that paragraph 44(2A)(a) of the AAT Act
relates to the time limit in which an appeal must be made, unless the
Federal Court allows further time in which to appeal.
Note 2 points out to the reader that paragraph 44(2B)(b) of the AAT Act
provides that the Federal Court may allow further time to appeal in certain
circumstances.
Note 3 points out to the reader that paragraph 45(1)(a) of the AAT Act
requires the President of the AAT to agree before the AAT can refer a
question of law arising in proceedings before the AAT to the Federal Court.
Subclause 259(5) excludes subsection 44(2), paragraphs 44(3)(b) and (c) and
subsection 44AA(2) of Part IVA of the AAT Act from applying in relation to
SSAT employer proceedings.
Part 5-4 - Review of claimant decisions by the
Administrative Appeals Tribunal
Division 1 - Guide to this Part
Clause 260 - Guide to this Part
This clause outlines the scope of new Part 5-4.
Division 2 - Right to review by AAT
Clause 261 - Review of decisions by AAT
This clause sets out when review by the AAT may occur.
Subclause 261(1) provides that an application for review may be made to the
AAT in respect of a decision that has been affirmed, varied or set aside by
the SSAT.
Subclause 261(2) clarifies that the 'decision' made by the SSAT as referred
to above is taken to be the decision as varied or affirmed, or the new
decision if the original one was set aside, or the directions or
recommendations of the SSAT where the SSAT has set aside the reviewable
decision and sent the matter back to the Secretary for consideration.
Subclause 261(3) provides that an employer cannot make an application for
review by the AAT under subclause 261(1).
Subclause 261(4) clarifies that subclause 261(1) is subject to section 29
of the AAT Act.
Clause 262 - Variation of decisions under section 261 before AAT review
completed
Subclause 262(1) provides that, where a decision is varied by an officer
after an application for review has been made to the AAT, under new section
261, but before the application is determined, the application is to be
treated as if the decision, as varied, had been affirmed by the SSAT and
the decision under review is the varied decision rather than the original
decision.
Subclause 262(2) has the same effect for decisions set aside and
substituted.
Subclause 262(3) makes it clear that, where an officer varies the decision
under review or sets the decision aside and substitutes a new decision, an
applicant has a choice as to whether to proceed with the application for
review under new section 261 or to withdraw.
Clause 263 - Settlement of proceedings before the AAT
Subclause 263(1) provides that, if AAT proceedings relate to the recovery
of a debt, the Secretary and the other parties to the proceedings may agree
to settle the matter. Any agreement must be in writing.
Subclause 263(2) provides that, if the proceedings are settled and the
Secretary gives the AAT a copy of the agreement to settle the proceedings,
the application for review that is the subject of the proceedings is taken
to have been dismissed.
Division 3 - Modification of AAT Act in relation to section 261 review
applications
Clause 264 - Notice of application for review
Clause 264 modifies subsection 29(11) of the AAT Act for the purposes of an
application under new section 261 so that all parties to the SSAT review of
the decision, except the party making the application to the AAT, receive
notice that there has been an application to the AAT for review of the
decision made by the SSAT.
Clause 265 - Parties to a review by the AAT
This new section modifies paragraph 30(1)(b) of the AAT Act so that the
parties to a review by the AAT under new section 261 are the same as the
parties to the review by the SSAT.
Clause 266 - Lodgment of documents with the AAT
Subclause 266(1) modifies section 37 of the AAT Act for the purposes of an
application under new section 261. The modification allows for reference
to the person who made the decision the subject of the application to be
deemed to be reference to the decision maker as provided by this subclause.
Subclause 266(2) provides that, for the purposes of the deemed decision-
maker meeting his or her obligations under paragraph 37(1)(a) of the AAT
Act in respect of an application under new section 261, the statement
provided by the SSAT under new subparagraph 257(1)(c)(ii) or new paragraph
257(5)(a) will be sufficient.
Subclause 266(3) clarifies that the AAT's powers under section 38 of the
AAT Act to obtain an additional statement is not limited by the operation
of subclause 266(2).
Clause 267 - Power of AAT to obtain additional information
Clause 267 modifies section 38 of the AAT Act so that the person who is
required to provide any additional statements under that section to the AAT
is the Principal Member.
Clause 268 - Operation and implementation of the decision under review
Subclause 268(1) modifies subsection 41(4) of the AAT Act for the purposes
of an application under new section 261 so that, where a party applies to
the AAT for an order staying or otherwise affecting the operation or
implementation of a decision made by the SSAT, each party to the review
before the SSAT will be able to make submissions to the AAT.
Subclause 268(2) clarifies that the 'decision' referred to in section 41 of
the AAT Act for the purposes of an application under new section 261 is to
be taken to be the original decision and: the decision as varied by the
SSAT if it was varied; the new decision if the original one was set aside;
or any decision made as a result of the matter being sent back to the
Secretary with directions or recommendations.
Subclause 268(3) clarifies that, for this purpose, 'original decision'
means the decision reviewed by the SSAT.
Clause 269 - Failure of party to appear
Clause 269 modifies subsection 42A(2) of the AAT Act so that the Secretary
is the person who made the decision and therefore that provision does not
apply to the Secretary as a party to the decision.
Part 5-5 - Other matters relating to review
Division 1 - Introduction
Clause 270 - Guide to this Part
This clause outlines the scope of new Part 5-5.
Division 2 - Other matters relating to review
Clause 271 - Authorised review officers
Clause 271 provides that the Secretary may authorise officers to be
authorised review officers for the purposes of this new Act.
Clause 272 - Review body may determine events to have happened, or not to
have happened
This clause applies if the Secretary, SSAT or AAT (the review body) is
reviewing a decision under new Chapter 5. If the review body is satisfied
that an event would have happened had the original decision not been made,
then that event can be deemed to have happened for the purposes of the
review. Similarly, if an event would not have happened had the original
decision not been made, then that event can be deemed to have not happened
for the purposes of the review.
For example, a person made a primary claim pre-birth, or within the 28 days
immediately following birth, for which the Secretary determined parental
leave pay was not payable to the claimant and, because of this, the
claimant did not verify the child's birth within the required time. If, on
review, the SSAT decides that the individual is eligible it may set the
decision aside, remitting it back to the Secretary. The intention is to
allow the Secretary to be able to seek verification at that time of the
birth but be able to treat the claim as though the verification had been
provided at a time which allows the claimant's nominated start date to have
effect as the start of their PPL period. The Secretary should be satisfied
that verification would have been provided within the required time but for
the decision that parental leave pay was not payable to the claimant.
Similarly, if a person returned to work because the Secretary determined
that parental leave pay was not payable to him or her, this event will not
necessarily disqualify the person from parental leave pay. If, on review,
the Secretary decides that the claimant was eligible and the Secretary was
also satisfied that parental leave pay would have been payable from the
claimant's nominated start date, but for the decision that parental leave
pay was not payable to the claimant, it would be open to the Secretary to
deem that the claimant had not returned to work.
Clause 273 - Certain income test determinations not to be changed on review
This clause applies where a review is being conducted by an officer, the
SSAT or the AAT for the purposes of new Chapter 5 and if: the review
involved a review of a decision that the person is or is not eligible for
parental leave pay, or that parental leave pay is or is not payable; the
review considered a determination that the person satisfies the income
test; this determination was taken into account in deciding that parental
leave pay is payable; and the person did not knowingly make a false or
misleading representation or provide false or misleading information in
relation to the determination of income.
The note refers the reader to new section 37, which provides for the income
test.
If this occurs subclause 273(2) provides that, despite any provision of
this new Chapter or the AAT Act, the review body cannot vary the income
determination in such a way that the person does not satisfy the income
test or set aside the income determination and substitute it with a new
determination that the person did not satisfy the income test.
It is intended that, once a person has provided their estimate of adjusted
taxable income and the Secretary has decided that parental leave pay is
payable, this decision should not be over turned should the person's actual
adjusted taxable income later be found to exceed the income limit. This
does not include cases where a person provides false or misleading
information/representation in relation to their income determination.
Chapter 6 - Miscellaneous
Part 6-1 - How the Act applies in particular circumstances
Division 1 - Guide to this Part
Clause 274 - Guide to this Part
This clause outlines the scope of new Part 6-1.
Division 2 - How this Act applies to an adopted child
Clause 275 - How this Act applies to an adopted child
Subclause 275(1) provides that this new Act applies in relation to an
adopted child who satisfies the requirements of subclause 275(2) as if:
. a reference to the birth of a child were a reference to the placement
of the child;
. a reference to the expected date of birth of the child were a
reference to the excepted day of placement of the child;
. a reference to a child's first birthday were a reference to the first
anniversary of the day of placement of the child;
. a reference to a birth verification form for a child were a reference
to information required by the Secretary about the adoption of the
child; and
. a reference to a child being born during the same multiple birth were
a reference to the child being adopted during the same multiple
adoption.
This allows the remainder of the new Act to be read appropriately to
accommodate the circumstances of adoptive children and parents.
Subclause 275(2) sets out the circumstances in which an adopted child will
be covered. It is modelled closely on the provision which makes adoptive
parents eligible for baby bonus for their adopted child. It provides that
a child satisfies the requirements if, as part of the process for the
adoption of the child by a person, the child is, or is to be, entrusted to
the care of the person by an authorised party and the child is, or will be,
under 16 on the day of placement of the child.
'Day of placement' is defined in subclause 275(3) as the day on which, as
part of the process for the adoption of a child by a person, the child is
entrusted to the care of the person by an authorised party.
Division 3 - How this Act applies to claims made in exceptional
circumstances
Clause 276 - How this Act applies to claims made in exceptional
circumstances
A claim is made in 'exceptional circumstances' (defined in new section 6)
when the claim is made in circumstances prescribed as exceptional by the
PPL rules. These circumstances will generally be those in which there will
be an unexpected change of primary carer for the child, for example, as the
result of a death or serious illness of a parent of the child. This change
may potentially allow the claimant to make a primary, secondary or tertiary
claim, and be eligible as a primary, secondary or tertiary claimant,
depending upon the eligibility criteria prescribed under new subsection
31(4) by the PPL rules. In these cases, this new Act will apply as if:
. a reference to the birth of a child were a reference to the claimant
becoming the child's primary carer;
. a reference to the day the child was born were a reference to the day
the claimant became the child's primary carer;
. a reference to the expected date of birth of the child were a
reference to the day the claimant expects to become the child's
primary carer;
. a reference to a child's first birthday were a reference to the first
anniversary of the day the claimant became the child's primary carer;
. a reference to a birth verification form for a child were a reference
to information required by the Secretary about the claimant becoming
the child's primary carer; and
. a reference to a child being born during the same multiple birth were
a reference to the claimant becoming the primary carer of the child at
the same time as becoming the primary carer of another child.
Subsection 18(3), which deals with birth registration, is excluded from the
effect of this provision so that a parental leave pay claimant in
exceptional circumstances may still be required to comply with the
requirements of that subsection.
277 - Primary carers when a child is stillborn or dies
This clause provides that, if a claim is made for parental leave pay for a
child, and, before or after the claim is made, the child is stillborn or
dies, then a reference in this Act to the claimant becoming or being the
child's primary carer is taken to be a reference to, had the child not been
stillborn or died, the person who would have become or been the child's
primary carer. This means that a claim in exceptional circumstances can be
made by a claimant for a child who was stillborn or who has died, and the
operation of the Act modified appropriately by section 276 to correctly
establish eligibility.
Subclause (2) provides that the PPL rules may modify the operation of
subsection (1). This is necessary because the full range of exceptional
cases in which it may be desirable to allow payment of parental leave pay
where a child was stillborn or has died are not yet known, and the above
rule may not be appropriate for all circumstances.
Division 4 - How this Act applies to Commonwealth employment
Clause 278 - How this Act applies to Commonwealth employment
This clause provides for the application of the Act in relation to
Commonwealth employees, for the purposes of the Secretary being able to
make an employer determination, and the various employer obligations in
relation to the payment of instalments of parental leave pay to a person
where the person is employed by the legal entity that is the Commonwealth.
The effect of the clause is to apply the new Act to a person engaged by or
on behalf of the Commonwealth as an employee to perform functions in a
Commonwealth agency, as if the person were employed by the agency rather
than the Commonwealth, and the agency were a body corporate; and to make
clear that the agency head is taken to be the person's employer rather than
the Commonwealth. A Commonwealth agency for the purposes of this clause
means a Department of State; a Department of the Parliament; a prescribed
Agency within the meaning of the Financial Management and Accountability
Act 1997 that forms part of the Commonwealth; or any other unincorporated
body established for a public purpose by or under a law of the
Commonwealth.
Part 6-2 - Nominees
Division 1 - Guide to this Part
Clause 279 - Guide to this Part
This clause outlines the scope of new Part 6-2.
Division 2 - Appointment of nominees
Clause 280 - Appointment of payment nominees
This clause provides for the Secretary to be able to appoint a person to be
the payment nominee of another person under this new Act and direct that
the whole or part of an instalment be paid to the payment nominee.
The note at the end of subclause 280(1) reminds the reader that the
appointment must be made in accordance with new section 282.
An appointment or a direction made under subclause 280(1) is not a
legislative instrument. This provision is includes to assist readers as
the instrument is not a legislative instrument within the meaning of
section 5 of the Legislative Instruments Act.
Clause 281 - Appointment of correspondence nominee
This clause provides for the Secretary to be able to appoint a person to be
the correspondence nominee of another person for the purposes of the Paid
Parental Leave scheme.
The note at the end of subclause 281(1) points out to the reader that the
appointment must be made in accordance with new section 282.
An appointment or a direction made under subclause 281(1) is not a
legislative instrument. This provision is included to assist readers as
the instrument is not a legislative instrument within the meaning of
section 5 of the Legislative Instruments Act.
Clause 282 - Provisions relating to appointments
This clause deals with the administrative procedures that relate to
appointment. Subclause 282(1) provides that a person may be both the
payment nominee and the correspondence nominee of the same person.
Additionally, the Secretary must not appoint a nominee in relation to a
person unless the proposed nominee has consented in writing and the
principal's wishes, if any, have been taken into account. When the
Secretary has appointed a nominee in respect of person, then he or she must
give both of those parties a copy of the appointment.
Clause 283 - Suspension and cancellation of nominee appointments
Subclause 283(1) provides that, if a person withdraws their consent to be a
nominee under new section 280 or 281, the Secretary must cancel the
person's appointment as nominee as soon as practicable.
Subclause 283(2) gives the Secretary the power to suspend or cancel an
appointment where the nominee notifies the Department if an event or a
change of circumstances has happened or is likely to happen, and the event
is likely to have an effect described in new paragraph 288(1)(b).
Subclause 283(3) provides that the Secretary may suspend or cancel
appointments, in writing, if the Secretary gives the nominee a notice under
new section 288 or 289 and the nominee does not comply with the notice.
Subclause 283(4) provides that, while an appointment is suspended, the
appointment has no effect for the purposes of this new Act.
Subclause 283(5) provides that the Secretary may, at any time, cancel a
suspension of an appointment under subclause 283(2) or (3).
Subclause 283(6) provides that any suspensions or cancellations of nominee
appointments must be made by the Secretary in writing.
Subclause 283(7) provides that the cancellation of an appointment has
effect on and from the day specified in the cancellation.
Subclause 283(8) provides that the Secretary must give a copy of a
suspension or cancellation of an appointment, or a cancellation of such a
suspension, to the nominee and the principal.
Subclause 283(9) provides that a suspension or cancellation of an
appointment, or a cancellation of such a suspension, is not a legislative
instrument. This provision is included to assist readers as the instrument
is not a legislative instrument within the meaning of section 5 of the
Legislative Instruments Act.
Division 3 - Payments of instalments to payment nominee
Clause 284 - Payments of amounts to payment nominee
Subclause 284(1) provides that, if a person has a payment nominee and the
whole or a part of an instalment of parental leave pay is payable to the
person under this new Act, the instalment must be paid to the payment
nominee.
Subclause 284(2) provides that the amount paid to the payment nominee of a
person is paid on behalf of the person and is taken to have been paid to
the person when it is paid to the payment nominee.
Subclause 284(3) provides that an amount that is to be paid to the payment
nominee of a person must be paid to the credit of a bank account nominated
and maintained by the nominee.
Subclause 284(4) allows for the Secretary to direct that the amount that is
to be paid to the payment nominee be paid to the payment nominee in a
manner other than to credit a bank account maintained by the nominee.
Subclause 284(5) provides that a direction given under subclause 284(4) is
not a legislative instrument. This provision is includes to assist readers
as the instrument is not a legislative instrument within the meaning of
section 5 of the Legislative Instruments Act.
Division 4 - Functions and responsibilities of nominees
Clause 285 - Actions of correspondence nominee on behalf of principal
Subclause 285(1) provides that any act (other than one under new Division 2
or 3) that may be done by a person may be done by that person's
correspondence nominee for the purposes of the Paid Parental Leave scheme.
The note reminds the reader that this clause is subject to new section 296
and new subsection 284(4).
Subclause 285(2) provides that an application or claim that may be made
under this new Act by a person may be made by the person's correspondence
nominee on behalf of that person.
Subclause 285(3) provides that the actions of a person's correspondence
nominee under this clause are those of the person for the purposes of this
new Act.
Subclause 285(4) provides that subclause 285(1) does not extend to an act
where the Secretary gives a notice to a person who has a correspondence
nominee requiring the person to do the act.
Clause 286 - Giving of notices to correspondence nominee
Subclause 286(1) provides that any notice that the Secretary has the power
to give to a person under this Act may be given to that person's
correspondence nominee instead.
Subclause 286(2) provides that the notice must be in the same form as if it
were being given to the person and it may be given either personally, sent
by post or by any other means approved by the Secretary to the
correspondence nominee.
Subclauses 286(3) and (4) deal with the giving of notices to both the
claimant and the correspondence nominee. Where the Secretary gives a
notice to a claimant, having previously given the same notice to their
correspondence nominee then new section 287 no longer applies in respect of
the notice given to the nominee. Similarly, if a notice is given to a
correspondence nominee when that same notice has previously been given to
the claimant, then new section 287 does not apply in respect of the notice
given to the nominee.
Clause 287 - Compliance by correspondence nominee
This clause details what a correspondence nominee must do to comply with a
notice that has been given to them under new section 286 and the
consequences of the correspondence nominee complying or failing to comply
with the notice. In effect, if a notice, making a PPL requirement of a
person, is given to the person's correspondence nominee, the notice is
taken to have been given to the person at such time as it was given to
their nominee. The nominee is able to satisfy any PPL requirement made of
the person.
Where the person's correspondence nominee does an act for the purpose of
satisfying a PPL requirement imposed on the person, that act is taken, for
the purposes of this new Act, to have been done by the person.
Additionally, where a person is subject to a PPL requirement and neither
the person nor their nominee complies with that requirement, then it is
taken, for the purposes of this new Act, that the person has failed to
comply with that requirement.
Clause 288 - Nominee to inform Department of matters affecting ability to
act as nominee
Subclause (1) provides that the Secretary may give a nominee of a person a
notice requiring the nominee to inform the Department of the occurrence of
an event or change of circumstances, or of the nominee becoming aware that
such an occurrence or change is likely to happen. The obligation to notify
applies only if the event or change of circumstances is likely to affect
the nominee's ability to act as a nominee, or the Secretary's ability to
give notices to the nominee, or the nominee's ability to comply with
notices given to the nominee by the Secretary.
Subclause 288(2) is subject to subclause 288(3) and deals with what form a
notice under subclause 288(1) should take. It must be in writing and be
given personally or by post or by such other means determined by the
Secretary. It must also specify how the nominee is to give information to
the department and the period within which to do so.
Subclause 288(3) provides that a notice under subclause 288(1) is not
ineffective just because it does not comply with paragraph 288(2)(c).
Subclause 288(4) is subject to subclause 288(5). It provides that the
period under paragraph 288(2)(d) must not end earlier than 14 days after
either the day on which the event or change of circumstances happens, or
the day on which the nominee becomes aware that the event or change of
circumstances is likely to happen.
Subclause 288(5) provides that subclause 288(4) does not apply if a notice
requires the nominee to inform the Department of any proposal by the
principal to leave Australia.
Subclause 288(6) provides that the new section extends extraterritorially
and to all people, regardless of their nationality or citizenship.
Clause 289 - Statement by payment nominee regarding disposal of money
Subclause 289(1) provides that the Secretary may give the payment nominee a
notice requiring the nominee to give the Department a written statement
about a matter relating to the disposal by the nominee of money paid to the
nominee on behalf of the principal.
Subclause 289(2) is subject to subclause 289(3) and deals with the
requirements of notices given under subclause 289(1).
Subclause 289(3) provides that a notice under subclause 289(1) is not
ineffective just because it does not inform the nominee how to give the
required information to the Department.
Subclause 289(4) provides that a person must be given at least 14 days,
after either the day on which the event or change of circumstances occurs
or the day on which the nominee becomes aware that the event or change of
circumstances is likely to occur, to notify the Department.
Subclause 289(5) provides that the statement given in response to the
notice must be in writing and in accordance with a form approved by the
Secretary.
Subclause 289(6) creates an offence in relation to the nominee who refuses
or fails to comply with a notice under subclause 289(1). The penalty for a
contravention of subclause 289(6) is 30 penalty units.
Subclause 289(7) sets out that subclause 289(6) does not apply if the
person has a reasonable excuse.
The note points out to the reader that, in accordance with subsection
13.3(3) of the Criminal Code, a defendant bears an evidential burden in
relation to the matter in subclause 289(2).
Subclause 289(8) provides that the offence of refusing or failing to comply
with a notice is an offence of strict liability.
A strict liability offence applies because nominees are receiving parental
leave pay on behalf of a third party and, if they do not comply, the third
party could be disadvantaged. The strict liability is softened to some
extent by subclause (7), which provides that subclause (6) does not apply
if the person has a reasonable excuse.
Subclause 289(9) provides that the new section extends extraterritorially
and to all people, regardless of their nationality or citizenship.
Division 5 - Other matters relating to nominees
Clause 290 - Protection of principal against liability for actions of
nominee
This clause provides that a person is not guilty of an offence under this
new Division for the acts or omissions of the person's correspondence
nominee.
Clause 291 - Protection of nominee against criminal liability
Subclause 291(1) provides that the nominee is not subject to any criminal
liability under this new Act for any act or omission of the person or
anything done in good faith by the nominee in his or her capacity as
nominee.
Subclause 291(2) provides that it is subject to new section 289.
Clause 292 - Duty of nominee to principal
This clause establishes a duty upon the payment or correspondence nominee
to act, or not to act, at all times in what he or she believes in good
faith to be the best interests of the principal.
Clause 293 - Saving of Secretary's powers of revocation of appointments
This clause makes it clear that the power of revocation that is contained
in subsection 33(3) of the Acts Interpretation Act 1901, is not affected by
anything in this Part.
Clause 294 - Saving of Secretary's powers to give notices to principal
This clause makes it clear that the nothing in Part 6-2 is intended to
limit the power of the Secretary to give notices to a person who has a
nominee.
Clause 295 - Notification of nominee where notice given to principal
This clause provides that, if the Secretary gives a notice to a person who
has a correspondence nominee, then the Secretary may inform the
correspondence nominee of the giving of the notice.
Clause 296 - Right of nominee to attend with principal
This clause deals with the situation where the Secretary gives a notice to
a person, even if the person has a correspondence nominee, because the
Secretary requires the person to do something personally. Where the
Secretary informs the correspondence nominee that a notice has been given
to the person, the nominee is given the right to attend or accompany the
person, subject to the person's (that is, the principal's) wishes.
Part 6-3 - Other matters
Division 1 - Guide to this Part
Clause 297 - Guide to this Part
This clause provides for the scope of new Part 6-3.
Division 2 - The PPL rules
Clause 298 - The PPL rules
This clause provides that the Minister may, by legislative instrument, make
rules providing for matters required or permitted by this new Act to be
provided, or necessary or convenient to be provided, in order to carry out
or give effect to this new Act.
It is appropriate to include provision for delegated legislation in this
way, particularly to enable the Government to bring certain people in less
usual or exceptional circumstances within the Paid Parental Leave scheme,
when they would not otherwise have the benefit of entitlement under the
primary legislation. For example, see the discussion above under subclause
31(4) in Chapter 2 about the navy officer recalled to active duty.
The PPL rules would also enable minor administrative matters to be
addressed to complete the scheme.
The PPL rules would be subject to full Parliamentary scrutiny according to
the usual legislative instrument requirements.
Examples of exceptional circumstances are situations such as the death or
serious illness of a parent of the child.
Clause 299 - Extension of Act to persons who are not employees and
employers
Subclause 299(1) provides that the PPL rules or regulations may provide
that the Secretary may make an employer determination under Part 3-5 for
people who are in a similar relationship as that between an employer and
employee. This is to allow for those relationships that do not fall
squarely into the employer/employee model, such as defence force members
and law enforcement officers.
Subclause 299(2) provides that the PPL rules or regulations, in relation to
such people under subclause 299(1), may modify, including by adding,
omitting or substituting, any provision of this new Act.
Subclause 299(2) will provide greater flexibility to include other types of
employees as needed. Additionally, the rules or regulations may need to
amend provisions to extend the powers of a relevant regulator to undertake
compliance of PPL as these employers will not be regulated by the Fair Work
Ombudsman.
Division 3 - Jurisdiction of courts
Clause 300 - Jurisdiction of Federal Court of Australia
This clause confers jurisdiction on the Federal Court of Australia in
relation to civil matters arising under this new Act.
Clause 301 - Jurisdiction of Federal Magistrates Court
This clause confers jurisdiction on the Federal Magistrates Court in
relation to civil matters arising under this new Act.
Division 4 - Other matters
Clause 302 - General administration
This clause provides that the Secretary has, subject to any direction of
the Minister, the general administration of this new Act.
Clause 303 - Delegation
This clause provides that, subject to specific limitations set out in the
clause, the Secretary may, by signed instrument, delegate to an 'officer',
or the CEO or employee of the Commonwealth Services Delivery Agency or
Medicare Australia, all or any of the powers of the Secretary under this
new Act.
There are similar provisions in the Social Security (Administration) Act
1999 and the A New Tax System (Family Assistance) (Administration) Act 1999
to allow for efficient administration of Government-funded income support
and family assistance payments. As in those cases, and given the volume of
decisions to be made under the new Act, it would not be viable to limit the
delegations to Senior Executive Service officers, other than for those
particular decisions that are so limited. This provision will allow for
efficient administration of the PPL scheme.
Clause 304 - Decisions to be in writing
This clause provides that decisions made under this new Act must be in
writing.
Clause 305 - Secretary may arrange for use of computer programs to make
decisions
This clause deals with the situation where the Secretary arranges for a
computer program to generate a decision for any purpose under this new Act.
Where this happens, the computer decision is taken to be a decision of the
Secretary.
This provision ensures that a computer-generated decision is subject to
review by deeming it to be a decision by the Secretary.
Clause 306 - Notice of decisions
This clause makes it clear that a notice of a decision affecting a person's
entitlement to be paid parental leave pay (such as a decision that a person
is eligible for parental leave pay or a variation decision) is to be taken
to have been given to the person if it is delivered to the person
personally, or left at, or sent by prepaid post to, the address of the
place of residence or business of the person last known to the Secretary.
The note clarifies that notices of decisions can also be given
electronically in accordance with the Electronic Transactions Act 1999.
A notice of a decision under this new Act may be given to a person by
properly addressing, prepaying and posting the document as a letter. If
this procedure is followed, then the notice is taken to have been given to
the person at the time at which the notice would be delivered in the
ordinary course of post unless the contrary is proved.
If a provision of this new Act requires a notice of a decision to be given,
the notice is not ineffective just because the notice was not given or was
given late or did not comply with the requirements of this clause.
Other notices of decision (such as a notice requiring a person to provide
information) will be subject to the rules in sections 28A and 29 of the
Acts Interpretation Act 1901.
Clause 307 - Appropriation
This clause provides that payments of parental leave pay under this new Act
(other than payments of instalments by employers under new Division 2 of
Part 3-2) must be made out of the Consolidated Revenue Fund, which is
appropriated accordingly. A standing appropriation for payments of
parental leave pay is appropriate because the volume of these payments
under the new Act will depend on individual eligibility and cannot be
predicted sufficiently accurately for the purposes of an annual
appropriation. The standing appropriation model is consistent with
established appropriation models under similar legislation such as the
social security law and the family assistance law.
Clause 308 - Regulations
This clause provides that the Governor General may make regulations that
are consistent with the provisions in this new Act setting out matters that
are:
a) required or allowed by this new Act to be prescribed; or
b) necessary or convenient for carrying out or giving effect to
provisions in this new Act.
PAID PARENTAL LEAVE SCHEME
REGULATION IMPACT STATEMENT *
This Regulation Impact Statement (RIS) has been prepared by the
Commonwealth Department of Families, Housing, Community Services and
Indigenous Affairs (FaHCSIA) and the Commonwealth Department of Education,
Employment and Workplace Relations (DEEWR). Its purpose is to assist the
Australian Government to make decisions regarding a paid parental leave
(PPL) scheme.
The RIS assesses the impact of the Productivity Commission's (PC's) Final
Inquiry Report Paid Parental Leave: Support for Parents with Newborn
Children. The PC recommended a PPL scheme of 18 weeks duration for
eligible mothers and 2 weeks paid paternity leave for fathers and other
eligible partners, with payment based on the Federal Minimum Wage and in
most cases for employers to act as 'paymasters' to make these payments to
eligible parents.
The RIS analyses the impact of the PC's proposed PPL scheme and an option
with the paternity leave component deferred. The analysis includes costs
and benefits of each option, and the impacts on families, the broader
community, government and business. The RIS identifies the specific
business costs, in particular the costs for businesses due to the role they
would play in the proposed scheme.
This RIS has been prepared in accordance with the Australian Government
Best Practice Regulation Handbook, August 2007, issued by the Office of
Best Practice Regulation (OBPR) in the Department of Finance and
Deregulation and in consultation with the OBPR.
*This RIS was prepared in April 2009 at the time the Government chose
to introduce a PPL scheme along the lines of the PC model with paternity
leave deferred. The Government subsequently decided to phase-in the
employer role over the first six months to help employers transition to the
new arrangements. This change was in response to concerns raised by
employers, payroll software developers and tax practitioners about the
additional costs of upgrading IT systems in the middle of a financial year.
This means employers will generally be required to provide parental leave
pay to their long-term employees for births occurring from 1 July 2011,
rather than 1 January 2011, unless they choose to opt-in to the scheme at
the earlier time. The Government also decided to provide employers with
the option of receiving either fortnightly or three six-weekly payments to
provide more flexibility in how they handle the PPL funding from
Government. In addition, the Government reconsidered the requirement that
a person should be in paid work to receive PPL. A PPL applicant may resign
and receive PPL, subject to meeting the eligibility criteria, including the
work test. The continuing employment requirement has been removed to
ensure the scheme does not result in an employee having an artificial,
'time-limited' attachment to an employer only in order to receive PPL. The
Family Assistance Office will pay PPL to these recipients. It is expected
these amendments will be viewed positively by employers and help to ease
any initial implementation concerns for employers paying PPL to their
employees.
CONTENTS
1. Background 3
2. Problem 3
3. Objectives 5
4. Options 5
5. Impact Analysis of the Options 8
6. Business Costs 14
7. Consultation 21
8. Conclusion and Recommended Option 26
9. Implementation and Review 27
1. Background
In a joint media statement released on 17 February 2008, the Deputy Prime
Minister and Minister for Education, Employment and Workplace Relations,
the Hon Julia Gillard MP, the Treasurer, the Hon Wayne Swan MP, and the
Minister for Families, Housing, Community Services and Indigenous Affairs,
the Hon Jenny Macklin MP, announced that the Government would ask the
Productivity Commission (PC) to examine ways in which the Government could
provide improved support to parents with newborn children.
The PC was asked to look at the economic, productivity and social costs and
benefits of paid maternity, paternity and parental leave, as well as the
health and developmental benefits of any scheme for babies and their
parents.
The PC released its draft inquiry report on paid parental leave (PPL) on
29 September 2008 and held extensive public hearings and invited written
submissions on its draft report.
The Commission's final inquiry report 'Paid Parental Leave: Support for
Parents with Newborn Children' (PC (2009)) was presented to the Government
on 2 March 2009.
2. Problem
In its inquiry into paid parental leave the Productivity Commission (PC
2009) reported that 280 000 mothers gave birth in Australia in 2007. Of
these, around 175 000 were in the workforce prior to giving birth, with at
least 80 per cent of those mothers intending to return to work.
The PC (2009) also reported that around 11 per cent of mothers who were in
paid work prior to childbirth return to work before the baby has reached
three months of age, around 26 per cent before six months and around 57 per
cent before the baby has reached one year old.
Mothers return to work within the first six to 12 months of a child's life
often against their own preferences. Early return to work following
childbirth can have adverse consequences for the health and wellbeing of
the mother and child. In relation to the child, problems can include:
. an increase in a wide range of infant conditions (e.g. respiratory
tract infection, and eczema), particularly in cases where children are
not exclusively breast fed for the first six months;
. behavioural problems and delayed cognitive development; and
. adult impacts (obesity, diabetes and high blood pressure).
Mothers may experience psychological problems (particularly an increased
incidence of post-natal depression), fatigue, slower recovery from birth,
increased risks of breast cancer and ovarian cancer and possible increased
risk of post-menopausal hip fractures and osteoporosis (PC 2009; HREOC
2002).
These health and wellbeing problems are not only borne by the parents.
Society often has to pay for health costs and other consequences of poorer
outcomes for children and parents.
The onset of family responsibilities is often associated with a loss of
income. The financial stress associated with this can contribute to
physical and emotional problems experienced by parents, in particular the
mother. It can also affect the father's ability to adapt to parenthood; to
bond with their child; to provide emotional support and household
assistance for the primary carer. This may occur, for example, when
fathers must work longer hours to compensate for the loss of the mother's
income.
In addition to losing short term income, the mother's lifetime earning
capacity is often severely reduced as result of leaving the workforce to
bear children. Chapman et al (1999) found that women forgo lifetime
earnings of around $157,000-$239,000 from having one child. Women often
have lower wages and accumulated superannuation balances. The loss in
lifetime earnings may reflect a number of factors. Almost one fifth of
mothers in paid work resign instead of taking leave around childbirth. If a
woman returns to work, this will often be on a part-time basis. They tend
to work in jobs with flexible work arrangements, but which have fewer
opportunities for career development and lower workplace entitlements and
remuneration than other jobs.
There is a lack of comprehensive and equitable provision of paid parental
leave in Australia. Around half of employed women (and a somewhat smaller
share of men) are currently eligible for paid parental leave as part of
arrangements negotiated with their employers. The provision of PPL has
expanded over the past 40 years, but the PC (2009) reported that it is not
clear that the proportion of the workforce covered by paid parental leave
will change over the next decade. Access to PPL is higher for those in full-
time employment and those on high wages (over $1200 a week). Only around
one third of employed women who have children receive PPL.
In addition to privately negotiated benefits the Australian Government
provides a range of family payments and subsidies, including the Baby
Bonus. By comparison with other OECD countries family subsidies in
Australia are relatively generous.
Despite this assistance about a quarter to a third of mothers return to
work within six months of the birth of their child and two thirds of these
report returning to work because they need the money.
For others the current system of tax-transfer payments can discourage
mothers from returning to work at all. Family benefits and other welfare
payments in Australia are targeted at low-income groups rather than being
universally provided. For low earning second earners with low income
partners, in particular, returning to work after the birth of a child may
make them worse off because the net monetary returns from working are
insufficient to compensate them for the forgone welfare payments and
benefits of unpaid work and/or leisure.
The Productivity Commission reports that during their prime reproductive
ages, Australian women's participation rates were lower than many other
OECD countries.[1] For example, in 2005, labour participation rates for
females aged 25-44 years were more than 80 per cent in Sweden, Iceland,
Denmark and Finland, compared with less than 75 per cent in Australia.
Therefore the current system appears to be contributing to a less than
optimal female workforce participation rate in Australia. It is also likely
to raise costs to business as a result of lost productivity from higher
turnover and the associated costs of having to replace staff and train the
replacement staff.
Addressing the problems associated with early return to work is likely to
require financial support tied to leave - that is, paid parental leave. A
carefully designed scheme may also help encourage greater female labour
force participation before and after birth. This is unlikely to occur
without intervention by the Australian Government.
3. Objectives
The Government's objectives in supporting parents with newborn children
are:
. to enhance maternal and child health and development;
. to facilitate workforce participation by offsetting the disincentives
to paid work generated by the social welfare and taxation
arrangements; and
. to promote gender equity and work/family balance.
There are some inherent tensions between these objectives and the degree to
which a scheme will have an impact on any one of these objectives will vary
depending on choices about its design features.
4. Options
In terms of assessing the regulatory impact, this statement reports on
three options:
. continuing with the status quo;
. introducing the scheme recommended by the Productivity Commission; or
. introducing the scheme recommended by the Productivity Commission,
with the paternity leave component deferred.
4.1 Consideration of the Options
Take no action
A PPL scheme is not introduced. Parents of newborn children continue to be
assisted through current family assistance and income support payments with
no additional impacts. The Workplace Relations Act 1996 (the Act)
currently allows for 52 weeks unpaid leave for new mothers who have had at
least 12 months of continuous service with their current employer. The Act
also entitles them to return to the position they held immediately before
the start of leave or a position that has the same terms and conditions of
employment as the former position.
Under the Government's Fair Work legislation, which will become fully
operational from 1 January 2010, the National Employment Standards (NES)
will provide eligible parents with separate periods of up to 12 months of
unpaid leave associated with the birth or adoption of a child under 16
years. Alternatively, one parent can request an additional 12 months'
unpaid parental leave. An employer could only refuse this request on
reasonable business grounds.
The PC's proposed scheme
The PC's preferred PPL scheme has been designed to provide breadth of
coverage, financial benefits to working mothers and minimal impact on
employers.
The key features of the PC's proposed model for a statutory PPL scheme are:
. A non-means tested taxable payment set at the rate of the Federal
Minimum Wage (FMW) would by paid to eligible parents for 18 weeks (the
parental leave component).
. Statutory PPL would be available to parents who:
> are the primary carer of a new born or adopted child;
> have been employed 'continuously' (with one or more employers)
for at least 10 out of the 13 months prior to expected birth or
adoption; and
> have worked at least 330 hours in the 10 months (an average of
7.6 work hours per week).
. Statutory PPL would cover all employees who meet the above employment
criteria, including the self-employed, contractors and casual workers.
. Parents receiving any payment under the parental leave component of
the PPL scheme would not be eligible for the Baby Bonus (except for
multiple births) and would not be eligible for Family Tax Benefit Part
B (FTB B) during the period covered by payments under the parental
leave component.
> The scheme is optional and parents may choose to receive these
payments instead of receiving PPL.
. Parents giving birth to more than one child would be eligible for one
period of PPL and would receive the Baby Bonus for the second and
subsequent children from the birth, subject to the Baby Bonus income
test.
. Payments to parents eligible for statutory PPL would be made to them
by their employers if the parent was entitled to unpaid leave under
the National Employment Standards. All other eligible parents would
be paid directly by Centrelink.
. Centrelink would prepay statutory PPL payments to the employers.
. Two weeks paternity leave would be available to eligible fathers and
other eligible parents. This would be a non-means tested taxable
payment set at the rate of the FMW (the paternity leave component).
The PC's proposed PPL scheme but with the paternity leave component
deferred
This option is the PC's proposed model for a statutory PPL scheme but with
the paternity leave component for fathers and other eligible partners
deferred following the proposed review of the PPL scheme after two years.
Other options considered by the Commission
The PC considered a wide range of options for financing a PPL scheme, such
as full direct employer financing, income contingent loans, pooled levy
arrangements, concessional business tax arrangements and leave savings
accounts. Due to the limitations of each of these options they have been
rejected. A brief description of each option and its major limitations is
provided below, but otherwise, they will not be further considered in this
RIS.
. An employer funded scheme would mean lower cost to Government, but
would place a significant cost burden on employers, especially small
business, with a disproportionate impact on female-dominated
industries. Due to the higher costs for business it could also
increase the risk of employment discrimination against women of child-
bearing age. There would be difficulties in administering,
implementing and regulating the scheme and there could be an increase
in gender wage inequality due to long-run downward wage pressures on
female-dominated industries.
. An income contingent loan, similar to HECS, could result in a
disincentive for parents to earn enough to exceed the income threshold
for repayment. It could result in parents who are least likely to
repay the loans in the near future, or not at all, receiving the
greatest subsidy, thereby increasing the risk to Government revenue.
. A social insurance scheme, where PPL is funded through contributions
paid by employers, employees and Government would have high
implementation risks and a comparatively high administrative and
compliance burden on business, as well as potential high transitional
costs for business. Such a scheme would increase the complexity of
the tax system.
. Concessional business tax arrangements involve employers receiving tax
credits or deductions for expenses related to parental leave and other
family friendly initiatives. As this type of scheme would provide tax
concessions to existing negotiated parental leave schemes the PC
(2009) noted that a significant part of the revenue cost of the scheme
would support behaviour that was occurring anyway. This scheme would
tend to favour higher-skilled and better paid employees and tend not
to increase coverage of low-skilled or casual employees. This raises
equity and efficiency concerns. Finally, this type of scheme would
involve high risk to Government revenue due to the uncapped nature of
the scheme and for some employers seeking to maximise their returns
from the scheme.
. Leave savings accounts are bank accounts for employees (that employees
and employers can contribute to, similar to superannuation
arrangements) that move with employees from job to job over the course
of their working life and can be drawn upon to pay for parental leave.
The PC (2009) notes some limitations with this type of scheme.
Employers may not receive retention benefits because eligibility for
the scheme is not based on any period of tenure with an employer. The
scheme would be quite complex and could lead to perverse outcomes,
such as employees not intending to return to work and accessing an
advance draw down.
5. Impact Analysis of the Options
5.1 Take no action
The problems associated with the 'take no action' option are discussed in
the Problem section (Section 2).
5.2 The PC's proposed PPL scheme
Impacts on families, the broader community and Government
Maternal and child health and wellbeing
The PC Final Report argued that its proposed PPL scheme would increase the
average length of leave taken by employed women after childbirth by around
ten weeks. Coupled with other leave arrangements, this was estimated to
allow most infants to be exclusively cared for by their parents for the
first six months of life (without undue financial stress), improve child
development outcomes, enhance support for breast feeding with its health
benefits for mothers and infants and provide a reasonable period of leave
for maternal recovery.
There is a consensus of evidence that time spent away from work supports
the health and development of mothers and babies. Maternal recovery can be
prolonged and an early return to work may increase the risk of depression
and anxiety. To facilitate maternal recovery, the length of absence from
work should be no less than 12 weeks and potentially up to six months (PC,
2009).
Biomedical literature suggests there are benefits from breastfeeding for
infants and children (particularly if exclusively breastfed for six months)
as well as for mothers. There is also evidence of a positive association
between paid parental leave and the duration of breastfeeding. The World
Health Organisation (WHO) recommends six months exclusive breastfeeding
(WHO, 2002). Data from the Longitudinal Study of Australian Children shows
that although 92 per cent of babies are breastfed at birth, only 57 per
cent of babies are breastfed at six months. Paid parental leave, together
with support for breastfeeding, has the potential to improve breastfeeding
rates (PC, 2009).
Evidence suggests that parental leave can benefit the health and
development of a child by enabling the child to bond with its parents from
an early age, which is important for an infant's early brain development.
It has also been found that an infant is more likely to have regular health
check-ups and vaccinations if a mother has an extended period of leave
following childbirth (PC, 2009).
Workforce participation and attachment
The PC estimated that its proposed scheme would provide an average net
benefit of $1,750 in disposable income to 146,000 families a year (52 per
cent of its estimated 280,000 families who each year have a child). It
estimated 21,000 families with working mothers would opt out of the scheme
due to the scheme's marginal benefit to them. This would result in an
average net benefit of $2,040 to the 125,000 families with parents
receiving payments under the scheme.
The PC Final Report argued that its proposed PPL scheme would encourage
women to participate in employment prior to having children and in between
pregnancies, with long-term beneficial impacts on the employment of women.
The average Australian women's lifetime period of employment may be
extended by around 2-3 months to 6 months.
The Productivity Commission notes that the projected long-term increase in
female labour supply as a result of the scheme could have a dampening
effect on female wages as a result of increased female labour force
participation. Subject to the degree of segmentation in the labour market,
this would have a dampening effect on male wages as well.
Evidence from the Australian Public Service Commission (APSC) and the Equal
Opportunity for Women in the Workplace Agency (EOWA) indicates that
organisations offering paid maternity leave experience a greater return to
work rate than organisations not providing paid leave (APSC, 2008 & EOWA,
2008). International evidence shows that countries with paid maternity
leave schemes have higher participation rates among women, especially when
paid maternity leave is combined with other family friendly conditions such
as flexible working arrangements and quality, accessible child care.
Although the PC's proposed PPL scheme is deliberately designed to decrease
women's workforce participation in the period immediately following
childbirth to enable exclusive parental care in the first six months, the
PC suggests that the scheme would maintain women's link to the labour
market and overall increase women's lifetime employment. In particular, PPL
would benefit low income earners who are less likely to have access to
employer funded PPL than high income earners, therefore seeking to improve
equity for mothers in the workforce. Furthermore, it would be likely to
promote employment prior to childbirth so as to enable women to qualify for
the benefits (PC 2009).
Gender equity and work/family balance
The PC maintains that the introduction of PPL is a means by which to
address issues of gender inequality. The Australian Human Rights
Commission has noted that PPL may serve to provide some compensation to
mothers for income lost at birth (HREOC, 2002). There is also evidence
that PPL for both sexes can result in a more equitable distribution of
domestic and caring responsibilities by encouraging fathers to take time
off.
The OECD has noted that exclusive paternity leave has been introduced in
some countries as a means of promoting gender equity objectives (OECD).
The PC (2009) points to submissions to its inquiry to support the notion
that PPL would also promote a better balance between work and family life.
Although this needs to be considered within the greater context of
community standards, PPL is said to have the potential to 'normalise' the
management of caring responsibilities with employment (PC 2009).
The PC concluded that PPL would be likely to have a small positive impact
on women's labour force participation. The PC noted that:
. long-run European studies into the impacts of parental leave
entitlements on aggregate employment and wages imply moderate paid
leave periods can stimulate female employment and workplace
participation. The direct labour supply impacts of PPL would occur
during women's prime childbearing years (25 to 34 years);
. a short term impact of its proposed scheme will be to reduce women's
labour force participation in the period immediately following
childbirth, but also to provide an incentive for women to maintain a
link to the labour market in the longer term.
. labour force impacts are likely to vary depending on the income of
families. The incentive effects are likely to be marginal for higher
income families and be greater for low income families.
The PC's model could increase productivity and morale by offering a more
attractive work/life balance for women.
The PC Final Report argued that its proposed PPL scheme would send a strong
signal that having a child and taking leave from work around the time of
the birth or adoption of a child is viewed by the community as part of the
normal course of work and family life. Employers acting as paymasters may
achieve cultural change by 'normalising' access to, and use of, PPL in
workplaces where it has not previously been offered.
Potential workforce discrimination against women
The Commission noted employer organisation concerns about the potential for
increased discrimination against women, particularly of child-bearing age,
due to cost issues arising from its draft PPL model. For example, some
employers may discriminate against hiring women in prime child-bearing
years (25-44 years) in an attempt to avoid meeting potential future costs
for that employee.
The Commission specifically identified risks of increased discrimination
against potential parents - particularly younger women - as a reason not to
have direct employer financing of a PPL scheme.
While discrimination is less likely under the PC's final model and there
are legislative remedies against employers acting in this way, it may
potentially occur due to increased costs and uncertainty for some small
businesses.
Impact on existing voluntary paid parental leave schemes
In Australia there is currently no statutory period of paid parental leave.
Many employers choose to offer a voluntary scheme to their employees. The
leave is provided solely at the cost of the employer. DEEWR has estimated
that paid maternity leave provisions were present in 15 per cent of
workplace agreements, covering 44 per cent of the total Australian
workforce. In addition, about 28 per cent of the workforce had workplace
agreements containing paid paternity leave provisions and about 12 per cent
of the workforce had workplace agreements containing adoptive leave
provisions.[2] As a voluntary, unregulated system, there is considerable
variation between the schemes with the terms set out in the employment
agreement between employees and employers.
The Commission notes in its final report that employer funded schemes
provide a positive signal to prospective workers that a firm is an
'employer of choice'. It notes the possibility of firms with employer
funded schemes choosing to withdraw them and that a firm considering
introducing a scheme may be discouraged from doing so.
Under the PC's proposed model, employees would be able to take statutory
parental leave concurrently, or in addition to, existing employer-funded
PPL schemes and other leave entitlements. Fathers would not be able to
take their two weeks statutory paid paternity leave concurrently with any
paid leave, e.g. annual leave. This includes Commonwealth and State
Government employees who are currently entitled to PPL through legislation
or industrial instrument.
Employers who provide for PPL through an industrial instrument cannot
withdraw that entitlement for the life of that instrument. During
bargaining for a new agreement, employers may seek to negotiate with
employees to amend existing PPL provisions in light of the introduction of
a new PPL scheme, however the PC predicts that wholesale withdrawal from
existing PPL schemes is unlikely, given that employers with existing PPL
schemes differentiate themselves as 'employers of choice'.
The PC's proposed statutory PPL scheme is expected to provide a new
foundation for employer-funded provisions, such as 'top up' payments to
full replacement wages. In the longer term, a scheme with payments
provided through employers may result in a better integration of the PPL
scheme with employer funded parental leave and other family friendly
employment benefits.
Cost to government
Of the 285,000 new mothers each year, an estimated 126,319 mothers would
receive PPL payments under this option and 56,288 fathers would receive
paid paternity leave payments.
The net cost to government of this option would be $752.8 million over four
years.
Impacts on business
The PC removed business' significant concerns with its Draft Report PPL
proposal for a PPL scheme by:
. deferring consideration of the introduction of compulsory
superannuation contributions until after a review of the scheme to be
completed three years after implementation; and
. recommending that Centrelink make advance payments of PPL to
employers, reducing the cash flow implications for business.
The Commission has not attempted to quantify compliance costs either at a
firm level or economy-wide. However, it has noted that these costs are
likely to vary depending on business size. The additional administrative
and compliance costs on businesses associated with a PPL scheme include:
. Education and professional advice costs such as the need for
businesses to read information booklets and/or outsource and pay for
advice;
. Purchasing costs such as those relating to the purchase of new
accounting and payroll software or upgrading existing software to
enable businesses to act as paymasters for a PPL scheme;
. Administration and record keeping costs such as the requirement for
businesses to verify employee eligibility, the costs of providing the
payroll function and related audit costs; and
. Business costs of temporary replacement staff during the period
employees extend their leave as a result of receiving PPL payments.
The impacts on businesses associated with new parents taking leave, such as
the hiring and training of replacement staff, the potential for reduced
productivity and the costs of administration of unpaid parental leave, are
not new costs for business. Costs may increase, however, if the average
length of time that mothers take away from work increases as expected.
Number of businesses affected
The PC estimated that the maximum number of employing businesses that could
be affected would be 841,317. It estimated that 4.3 per cent of the
757,200 small businesses (less than 20 employees) would have to act as
paymaster for the PPL scheme in any given year. The PC does not provide
precise estimates of the proportions of larger businesses that would need
to act as paymaster in a given year. For medium businesses (20 to 199
employees), the percentage is around
60 per cent, whereas virtually all large businesses (200 or more employees)
would have to act as paymasters in any given year. Businesses with a
greater proportion of female employees of child bearing age such as hair
and beauty shops would be more likely to be affected.
Under this option an estimated 99,792 mothers would be paid by employers as
paymasters, with an estimated 28 per cent of these employers being small
businesses (27,942). Of the 33,773 fathers paid by employers as
paymasters,
28 percent of these are small businesses (9,456).
Detailed analysis of the costs to business is provided in section 6 of the
RIS on 'Business Costs'. It is not possible to quantify the other benefits
to business described above.
5.3 The PC's proposed PPL scheme with paternity leave component deferred
Impact on families, the broader community and Government
This option would not promote gender equity as strongly as the PC's
proposed scheme because there would be less encouragement of fathers'
active involvement in the early care of infants. The recommended two weeks
paternity leave is an important signal to fathers and their employers that
fathers have a pivotal role in the raising of their child.
The ABS Career Experience survey asks employed males about their leave
experience when their youngest child was born. Only six per cent of
employed males with children aged under six years take unpaid parental
leave when their youngest child is born.[3] Men are most likely to take
recreational /holiday/annual leave (68 per cent) on the birth of their
youngest child.[4] On the other hand, all men who used unpaid parental
leave did so for a period less than six weeks.[5] Clearly ABS data
indicate that there is reluctance among Australian men to make use of
unpaid parental leave provisions.
Cost to government
Of the 285,000 new mothers each year, an estimated 126,319 mothers would
receive PPL payments under this option. This option reduces the net cost
of the PC's scheme by around $118 million over four years due to the
deferral of the paternity leave component.
Impacts on business
There are unlikely to be significant cost savings to business from the
deferral of the paternity leave component of the PPL scheme due to the low
expected take-up of the paid paternity leave component of the PPL. This is
because men would be more likely to take paternity leave using their annual
leave entitlement which, for most males would provide a higher level of
payment than the FMW.
6. Business Costs
6.1 Business Costs of the PC's proposed PPL scheme
Estimating the costs to businesses
There is little evidence of likely firm behaviour on which to base
estimates of the costs to business of the PPL scheme options.
Many small businesses will remain unaffected indefinitely. A small
business employer with an eligible employee is likely to experience higher
disruption, and higher costs as a proportion of their payroll costs, than a
larger business. Small business owners might not have to increase their
expenditures, but might have increased demands on their own time.
Larger businesses are more likely to have an existing employer funded
parental leave scheme and dedicated human resources staff that could
incorporate the new requirements into their management systems. In such
cases, it might not be possible to identify any cost particularly
associated with the new scheme.
A large part of this costing entails estimating the extra time it will take
for both small and large businesses to deal with the new paid parental
leave scheme. The costs to business are estimated to be significantly
higher in the first year, by around 85 per cent compared with the second
year. This is because self-education expenses will decline for all
businesses, and the need for professional advice and expenditure on
information technology (IT) systems will decline for all businesses,
particularly for larger businesses. Most businesses will only spend on
these services when they have an employee on PPL. This will happen to most
large businesses in the first year, but will affect only 4.3 per cent of
small businesses in any one year.
Many of the ongoing costs to business of a PPL scheme (i.e. those after the
first year) are independent of the nature of the scheme. These arise from
involvement in verification that parents are eligible for the scheme and
from costs associated with parents taking additional time off work to care
for their children. Employers have to replace these employees for an
additional period of time.
The costing is based on the number of PPL recipients and will therefore
exaggerate costs where businesses have multiple employees on PPL and could
be expected to have economies of scale.
In the following costings, hours are costed using the appropriate average
weekly hours series data for small and larger businesses[6].
Business costs of providing the payroll function
There would appear to be minimal additional compliance costs associated
with employers making the payment as the employee would already be in the
businesses payroll system. It could be assumed that it would simply require
that the payment amount and tax withheld be amended.
The cost depends on the average number of hours needed to handle the
incoming funds from Centrelink and make the nine consecutive fortnightly
payments. One half an hour has been allocated, resulting in a cost of
$500,000 per year for small businesses (4.3 per cent) and $1.5 million per
year for larger businesses.
The above estimate assumes perfect administration on the part of
Centrelink. If payments from Centrelink to businesses are late, this may
impose administrative costs in chasing up payments from Centrelink and cash-
flow pressure on businesses if they pay the PPL before they receive the
Centrelink payment.
This cost is a recurrent cost, and would not change significantly from year
to year.
Cost of educating employers about the new scheme
The introduction of new policies - especially in the case of changes to
employee entitlements - always involve additional costs to businesses as
they familiarise themselves with the details of those policies. Past
experience suggests that even when policy changes are intended to be simple
and straight forward, some businesses will still seek advice from a
professional to ensure that they have interpreted the proposed changes
correctly.
It should be noted that the cost estimates for education will diminish
considerably after the first year of the scheme, as employers become more
familiar with it. Thus the cost estimates here are only for the first year,
and the costs should decrease over the following years.
We have assumed that a manager of every small business devotes an average
time of half an hour to informing themselves about the scheme, resulting in
a total cost of $9.6 million across all small businesses. While there was
little evidence on which to base this assumption, it represents a best
rounded guess. Even the assumption that all small business managers will
be aware of the new PPL scheme can be called into question, and some
managers may only devote several minutes to it - for example, those who do
not think it will affect their own business.
If we had rounded down to one quarter of an hour, the cost estimate would
be $4.8 million across all small businesses.
Larger businesses will need to devote more time on average because they
will often have multiple staff who need to familiarise themselves with the
new regulations. We have allowed two hours per business resulting in an
estimated total cost of $5.4 million across all larger businesses.
These estimated costs of education assume that the Government runs an
effective publicity campaign at the launch of the scheme that succinctly
informs employers of their responsibilities under the scheme.
Cost to business of professional advice
It is difficult to estimate the extent to which businesses will obtain
professional advice, or when they might do so. Previous experience with the
regulatory impacts of other policies suggests that many businesses will
seek professional advice. However those policies had a direct impact on all
businesses, whereas the current proposal will not directly impact on all
businesses. In particular, it will only directly affect around 4 per cent
of small businesses in any one year.
Therefore we expect a large majority of small businesses will delay paying
for professional advice until such time as they are sure they will need it.
Payment for professional advice will also be lessened by the provision of
information and advice through government funded sources such as a call
centre and website for the scheme, along with a Centrelink inquiry line to
assist employers acting as paymasters.
Most larger businesses are likely to have at least one employee on PPL in
any year, but larger firms may also have more in-house expertise and
capacity to deal with a relatively simple scheme with their own resources.
Consequently, we assume that 6 per cent of small businesses and 25 per cent
of larger businesses will pay an average of $300 for professional advice
regarding a PPL scheme in its first year of operation. The percentages of
businesses seeking advice, and consequent costs, should fall considerably
after the first year.
The estimated total costs are $13.6 million for those small businesses and
$6.3 million for those large businesses which seek professional advice.
Business cost of processing applications and related administration
These estimates, which are based on data from the PC and FaHCSIA, make
allowance for mothers of stillborn and adoptive parents (which only have a
small impact), eligible mothers and partners who do not take PPL and those
working mothers who will be paid by Centrelink.
We assume that businesses would not incur any costs additional to those
mentioned above until such time as they became aware that an application
for parental leave was pending. The required notice arrangements in the
proposed scheme should provide adequate time for employers to prepare.
These costs will vary across businesses depending on whether they have
already sought external advice, the level of Government support, etc.
After becoming aware of a potential applicant for PPL, more small business
employers will need to better inform themselves about the scheme. The aim
is to implement the scheme so that it will impose minimal obligations on
employers. It is envisaged that the onus for providing the necessary
details to Centrelink will fall largely on the applicant. The employer
will mainly provide the necessary information to the employee, rather than
deal with Centrelink directly.
The likelihood that an individual business will have an eligible employee
in a given year depends on the age profile and number of women it employs.
The largest businesses are almost certain of having at least one birth to
an employee in a given year compared with only around 6.1 per cent of small
businesses. However, when eligibility criteria of the scheme are taken into
account, only around 4.3 per cent of small businesses are estimated have a
successful mother applicant in any year.
We assume that it would take half a day for employers to meet their
obligations for successful mother and partner applicants, and half a day to
assess unsuccessful applicants. This would include adapting their pay
system to receive and disburse funds from Centrelink. The total estimated
costs are $4 million for all affected small businesses and $13 million for
all larger businesses.
We assume that audit cost will only be incurred by a very small proportion
of those firms that are directly affected, and would be less than $100,000.
These costs are assumed to be ongoing without any significant change from
year to year.
Business cost of information technology upgrades
The paymaster function may involve one-off costs associated with IT
upgrades. Some businesses may need to purchase accounting and payroll
software updates. The extent of such costs will depend on the size of the
businesses.
In the first year of the scheme we assume that 6 per cent of the 757,200
small businesses would purchase software updates at a cost of around $100
each. This results in an estimated IT cost to small businesses of around
$4.5 million in total. We assume the 84,117 larger businesses have more
complex IT systems, and that 80 per cent of these businesses would spend
around $1,000 per business on
IT upgrades and related services. This resulted in an estimated IT cost to
large businesses of around $67.3 million in total. Therefore the total cost
to businesses of IT upgrades is estimated to be $71.8 million in the
scheme's first year.
We assume that these costs will decrease significantly for larger
businesses after the first year, as a majority of these businesses will
have an employee on PPL in the first year and need to upgrade their system.
The costs for larger firms may also be sensitive to the timing of
introduction of a scheme, for example a 1 July start date could enable
system changes to be made as part of other upgrades (eg tax system changes)
whereas a January start date could cause more disruption (and costs) as it
would be in the middle of a financial year.
Assuming most small businesses do nothing about upgrading their IT system
until such time as they need to, and only 4.3 per cent will be affected in
any one year after the first year, the costs in subsequent years to small
businesses will not fall as much as the costs to larger businesses.
Business costs of replacement staff
One of the largest costs identified by the PC is that associated with the
temporary replacement of staff who take parental leave. Employee absences
impose a range of costs on businesses such as the hiring and training of
replacement staff, the potential for reduced productivity and the costs of
administration. Importantly, it is not expected that this option will
increase the numbers of mothers or their partners that will take leave
around the birth of a child.
According to the PC, however, the scheme can be expected to increase the
average term of maternity leave by 10 weeks. Evidence provided to the PC
suggests that the costs associated with hiring replacement staff can be
anywhere between 20 per cent and 200 per cent higher than the cost of the
employee replaced.
However, it could be expected that hiring costs would depend more on the
number of vacancies filled rather than the length of the vacancy, which
would suggest that hiring costs would decrease as a proportion of total
employment costs over time. Also, the productivity of the replacement
employee would increase over time. We have therefore assumed that
employment costs increase by 10 per cent for the duration of the
replacement employment for small businesses. As employers already incur the
costs associated with the current period of maternity leave (an average of
37 weeks), the additional small business employment costs are estimated as
10 per cent of wages for the 10 additional weeks of leave taken.
Assuming these are the only additional hiring costs to the status quo, the
additional cost would be around $26.9 million for small business.
The PC argues that larger businesses are better able to cope with temporary
staff absences by redistributing workloads and adjusting leave rosters.
Assuming a five per cent on-cost for larger businesses their total cost
would be $44.1 million.
It is worth noting in this regard that the higher the replacement costs,
the harder the employee is to replace and the more benefit the employer is
likely to gain from the employee's return to work, and so benefit from the
scheme over the longer term.
However it should be noted that as the PC report indicates, existing
entitlements to unpaid leave impose costs on business. Whilst the PC's
proposal is expected to increase these costs, the PC expects the impacts on
individual businesses to be modest and will only be felt if a parental
leave occurs in any given year. The PC estimates that for small businesses
generally, only four per cent of firms with less than 20 employees will
experience a parental leave event in a given year.
This will be an ongoing cost, and will not fall over time.
Summary of business costs of the PC's proposed PPL scheme
While there are undoubtedly significant benefits from this scheme, they are
not quantifiable. While not all the costs are quantifiable, we have been
able to develop some indicative costs for several aspects of the scheme,
and these are presented in the table below. The totals of the identified
costs in the first year are $59.1 million for small businesses and $137.7
million for larger businesses, giving an overall cost of $196.7 million.
In subsequent years, the total costs to business are estimated to be of the
order of $107 million.
Summary tables of estimated costs of PC's proposed PPL scheme
Table 1: First year
| |Costs by business size ($) |
|Itemised costs |Small(a) |Larger |Total |
|Self education costs (b) |$9,580,666 |$5,431,660 |$15,012,326 |
|Professional advice |$13,629,600 |$6,308,775 |$19,938,375 |
|IT purchases |$4,543,200 |$67,293,600 |$71,836,800 |
|Processing applications - |$2,962,096 |$9,717,894 |$12,679,991 |
|mothers | | | |
|Processing applications - |$1,002,419 |$3,288,801 |$4,291,219 |
|partners | | | |
|Paymaster function |$473,188 |$1,552,424 |$2,025,612 |
|Additional replacement employee |$26,869,288 |$44,075,696 |$70,944,985 |
|costs due to longer average | | | |
|period of PPL taken (10 weeks) | | | |
|Total costs |$59,060,457 |$137,668,850 |$196,729,307|
|(a) Small businesses are those with less than 20 employees while larger |
|businesses are those with 20 employees or more. |
|(b) Rounding the average self-education time for small business down to a|
|quarter of an hour instead of up to half an hour would reduce this cost |
|by $4.8 million. |
Table 2: Second year
| |Costs by business size ($) |
|Itemised costs |Small(a) |Larger |Total |
|Self education costs |$0 |$0 |$0 |
|Professional advice |$9,767,880 |$3,154,388 |$12,922,268 |
|IT purchases |$3,255,960 |$841,170 |$4,097,130 |
|Processing applications - mothers|$2,962,096 |$9,717,894 |$12,679,991 |
|Processing applications - |$1,002,419 |$3,288,801 |$4,291,219 |
|partners | | | |
|Paymaster function |$473,188 |$1,552,424 |$2,025,612 |
|Additional replacement employee |$26,869,288 |$44,075,696 |$70,944,985 |
|costs due to longer average | | | |
|period of PPL taken (10 weeks) | | | |
|Total costs |$44,330,831 |$62,630,373 |$106,961,204|
|(a) Small businesses are those with less than 20 employees while larger |
|businesses are those with 20 employees or more. |
6.2 Business costs of the PC's proposed PPL scheme with the paternity leave
deferred
This option would save the direct costs associated with management time and
payroll function of partner PPL, amounting to $4.8 million per year off the
cost of option 2. The total cost to business would therefore be $191.9
million in the first year, falling to around $102 million in subsequent
years.
The estimated cost savings to business from the deferral of the paternity
leave component are relatively low because of the low expected take-up of
the paid paternity leave component of the PPL. Most men would be expected
to take annual leave around the time of birth of their child rather than
one of the PPL options, because their annual leave pay would be
considerably higher. The paid paternity leave component of the PC's PPL
scheme is likely to be viewed poorly by most men, compared with other more
financially attractive forms of paid leave.
6.3 Summary of the costs to business of the options
Table 3: First year
| |Costs by business size ($) |
|Options |Small |Larger |Total |
|The status quo |- |- |- |
|The PC's proposed PPL scheme |$59,060,457 |$137,668,850 |$196,729,307 |
|The PC's proposed PPL scheme |$57,938,394 |$133,987,512 |$191,925,906 |
|with the paternity leave | | | |
|component deferred | | | |
Note: Small businesses are those with less than 20 employees while larger
businesses are those with 20 employees or more.
Table 4: Second year
| |Costs by business size ($) |
|Options |Small(a) |Larger |Total |
|The status quo |- |- |- |
|The PC's proposed PPL scheme |$44,330,831 |$62,630,373 |$106,961,204 |
|The PC's proposed PPL scheme |$43,208,768 |$58,949,035 |$102,157,803 |
|with the paternity leave | | | |
|component deferred | | | |
|(a) Small businesses are those with less than 20 employees while larger|
|businesses are those with 20 employees or more. |
6.4 Scheme features which minimise business costs
The PC has proposed a range of measures to reduce the compliance and
administrative burdens and disruption costs that could be faced by
businesses if the Government adopted the PC's scheme. These include:
. Closely aligning elements of the model with the Government's National
Employment Standards (NES). For instance, unpaid leave - such as that
allowed for parental leave under the NES - should not qualify as
'working' for the purposes of a statutory paid parental leave scheme;
. The advance payment of parental leave instalments to paymaster
employers to minimise cash flow shortfalls for firms. In making this
recommendation, the PC recognised that its preferred approach to
payment delivery in the draft report, where businesses would make
payments to their employees and then be reimbursed through reduced Pay-
as-you-go withholding remittances to the ATO could, particularly given
the current difficulties in accessing business credit to address short-
term cash flow shortages, exacerbate such risks;
. Providing guidance to employers on minimising disruption costs. The
New Zealand Department of Labour sought advice from employers on
successful practices used to adapt business practices to minimise
disruption burdens following the introduction of a paid parental leave
scheme in New Zealand. The PC suggests that the Government could
combine such guidance with other information for employers associated
with the introduction of a statutory PPL scheme and that the
Government should develop a web-based calculator that would show which
employees would be eligible, what they would get and that would set
out any obligations by employers;
. Increasing the notice period required under the NES from four weeks to
six weeks for employees wishing to extend their originally indicated
duration of leave. The PC notes that the period for leave notices that
employees must give to employers when they are leaving and returning
to work, more than the total leave period itself, may be the decisive
factor in determining employer costs. This is because employers may
face significant costs if they have to re-arrange contracts with
substitute employees; and
. Introducing a 'keeping in touch' (KIT) provision similar to the United
Kingdom's parental leave scheme and a range of other employer funded
Australian schemes. The UK KIT provision allows parents on statutory
paid parental leave to work up to 10 days while on leave, but only if
the employer and employee mutually consent. For example, parents could
participate in training or planning or strategy days, or undertake any
other activities that maintain contact with the firm or that
facilitate an orderly return. The PC believes a KIT provision would be
likely to improve employee retention for businesses, decrease any
productivity loss associated with a parent's absence from work and
enhance the career prospects of the relevant parent.
There is also potential for costs to be minimised by using existing
administrative and payroll processes.
Other benefits may also offset to some extent the costs to businesses of
the
PC's model. These are particularly pronounced in the areas of staff
retention and the retention of specialist skills and knowledge associated
with it.
7. Consultation
The PC undertook extensive public consultation on proposals for PPL by
seeking public submissions and conducting public hearings.
Following receipt of the terms of reference, the PC placed advertisements
in national and metropolitan newspapers and sent a circular to a wide range
of individuals and organisations, inviting participation in the inquiry.
In April 2008, the PC released an Issues Paper and a Personal Feedback
Paper inviting public submissions and personal responses, and indicating
matters of particular interest to its inquiry. The PC held public hearings
in most capital cities.
On 29 September 2009, the PC released its Draft Report and interested
parties were invited to provide their views through a further round of
public hearings and written submissions.
Over the course of the inquiry, the PC received over 400 public
submissions, including around 160 commenting on its draft report.
Submissions were received from many key business and industry
organisations, women's groups, and unions.
In response to its consultations, the PC modified its draft proposal in a
number of respects. These are identified in section 7.2 below, along with
the stakeholder concerns which led to the change.
7.1 Stakeholder reactions
The following stakeholder reactions are summaries of the positions put by
major stakeholders in responding to the PC's draft report on PPL and its
draft proposal for a PPL scheme.
Business and industry organisations
Business groups such as the Business Council of Australia (BCA), the
Australian Chamber of Commerce and Industry (ACCI) and the Australian
Industry Group have generally expressed their support for a Government-
funded PPL scheme. However, they feel that no extra cost or inconvenience
should be borne by them, and therefore do not wish to take on the role of
paymaster or be required to make superannuation contributions to employees
on PPL.
ACCI agreed that PPL should be paid at the level of the Federal Minimum
Wage and that the scheme could be partly funded by changes to the Baby
Bonus. ACCI argued that companies that already provide PPL could use the
money they spend on PPL for other family-friendly policies. ACCI also
suggested that employers should not have to take on the paymaster role,
fund some of the scheme themselves or pay superannuation.
In its submission to the PC inquiry, ACCI identified costs to employers as
a result of PPL. It highlighted that employers already bear costs due to
existing requirements related to parental leave, such as providing at least
52 weeks of unpaid parental leave with the right to return to the same
position or an equivalent one, and incurring additional costs with respect
to replacement employees during parental leave. With regards to the
paymaster model, ACCI believe that employers are not a substitute for
Centrelink for the payment of Government benefits. Employers have a clear
preference to only return employees to their payroll when they return to
work. ACCI highlighted concerns regarding administrative and financial
costs associated with payroll tax, superannuation, workers compensation,
and payroll costs (ACCI, 2008).
The Australian Industry Group (AIG) would like employers to be able to
choose whether to act as 'paymaster' and those that do should receive the
funds in advance to reduce the financial burden. AIG expressed some
reservations about the necessity and cost of an 18 week scheme and
recommended 14 weeks instead. The AIG does not support paternity leave as
a PPL scheme should focus on women due to their intrinsic childbearing
role. The AIG suggests that funding for the scheme should be done through
a reconfiguring of family payments, in particular possible adjustment to
the level of Baby Bonus and its means testing (AIG, 2008).
The Australian Federation of Employers and Industries objected to
characterising PPL as a workplace entitlement - it considered that the PC
is trying to alter the legal status of parental leave as leave will not be
'earned' in the same manner as other leave and superannuation. It regards
parental leave and its payment as social welfare and a community issue, not
a workplace issue. It does not believe employers should have any part in
the process. It does not support payment of superannuation while on
parental leave (Australian Federation of Employers and Industries, 2008).
The Australian Mines and Metals Association supports the introduction of a
PPL scheme that is entirely taxpayer funded but it opposes employers acting
as paymaster. It opposes employers being required to make PPL payments
before being reimbursed by Government and paying superannuation on PPL
without reimbursement. The Association suggests that the 'keeping in
touch' provision should be voluntary and agreed between employer and
employee as it does not apply to all workplaces. It seeks assurance that
employers would not be subject to compulsory arbitration on 'top-up' claims
and that protected industrial action on parental leave issues would be
prohibited. Any agreement should be privately bargained (Australian Mines
and Metals Association, 2008).
The BCA considers PPL will boost maternal and child health. BCA strongly
supports the PC aiming for a six month PPL scheme to increase health
benefits, particularly for low income earners. The BCA considers PPL will
facilitate greater workforce participation. While they consider payment of
superannuation may be difficult for small business, the PC's PPL scheme
will generally only be a slight increase in payments for large business and
on what is already current practice. The PC's scheme is likely to enable
large business to invest in other family support mechanisms (BCA. 2008).
Master Grocers Australia supports PPL in principle, but is opposed to
employers being required to pay superannuation or act as paymaster (Master
Grocers Australia, 2008).
The National Farmers' Federation consider that PPL should be framed as
social assistance not a workplace entitlement and PPL should only be
available as a workplace-related entitlement where it is agreed at
individual workplaces. The Federation considers that the imposition of PPL
on farm businesses may cause some farms to avoid the potential liabilities
and obligations of hiring female employees. Payment of PPL prior to
reimbursement would have significant cash flow issues for farmers and
significantly add to their costs as would paying for superannuation
entitlements. The Federation consider a large number of women in
agriculture, while playing vital roles in family farm businesses, may not
meet the test for paid employment where their contribution is not formal or
consistent (National Farmers' Federation, 2008).
Unions
Unions generally support the idea of having employers act as paymaster and
paying superannuation contributions. Many unions believe this should go
further, and that employers should be required to top up wages to the
employee's usual rate of pay, and pay superannuation at the usual rate.
Most unions believed that the workforce attachment criteria in the PC's
draft proposal were too strict, and that the hours should be reduced from
10 to seven per week, over six months instead of 12 months.
The Australian Council of Trade Unions (ACTU) submitted it would like a
move to PPL at full replacement wages over time. It would like the
duration of paid leave increased to 26 weeks. The ACTU considered the
scheme should allow mothers the option of taking PPL at half pay over 36
weeks. It wanted to ensure that the net entitlements for mothers in both
paid and unpaid work were equitable (ACTU, 2008).
The Australian Education Union supported the view that PPL is about women's
participation in the labour market and supported distinguishing PPL from
welfare payments given to those not in the labour force. It suggested
future reviews of the scheme should include consideration of increasing PPL
to six months at full income replacement. It considered that current
workplace entitlements must be preserved and Government-funded PPL should
be offered in addition to these employer provided entitlements (Australian
Education Union, 2008).
The Community and Public Sector Union (CPSU)/State Public Services
Federation (SPSF) Group Federal Office prefer a 26 week PPL scheme at
replacement wages with superannuation paid at the normal rate of pay. It
considered leave should accrue during periods of PPL (CPSU, 2008).
Women's Groups
Women's groups supported the PC's proposed draft PPL model as a positive
first step towards a longer period of PPL in the future. They supported
the suggestion for more Government support for breastfeeding initiatives
and assistance. Many of these groups feel that paying a lower wage to
junior workers is discriminatory and unjustified. Several women's groups
feel that the continuous employment eligibility criterion should be clearly
defined to include workers such as seasonal workers and teacher aides, who
are not paid at certain times of the year.
7.2 Changes to the PC's draft PPL proposal in response to stakeholder
concerns
The PC received over 400 public submissions and held public hearings in all
major capital cities during its inquiry. It received extensive views from
business, unions, women's organisations and community groups on its draft
proposal for a PPL scheme. In developing its final proposal, the PC
modified a number of the parameters of its draft proposal in response to
concerns raised by stakeholders which are summarised below.
|Changes to PC draft PPL proposal |Stakeholder feedback that led to |
| |change |
|Superannuation contribution |Following the release of the draft|
|deferred until review of scheme in|proposal business groups generally|
|three years |expressed support for a |
| |Government-funded PPL scheme, but |
| |most raised concerns about funding|
| |superannuation contributions for |
| |employees during the PPL period. |
|Work test reduced to average of |Unions and women's groups |
|7.6 hours per week for 10 months |suggested changing the work test |
|in the last 13 months. |from a minimum of 10 hours per |
| |week to seven to make it more |
| |likely that contractors, casual |
| |workers and mothers who take leave|
| |before the birth are eligible. |
|Payment of PPL to employers by |Some business groups expressed |
|Centrelink before they make |concerns about the PC's draft |
|payments to employees. |proposals that they take on the |
| |'paymaster' function, in |
| |particular the potential for |
| |negative cash-flow impacts arising|
| |from the proposed model. |
|PPL available for non-parent |Some organisations, such as the |
|carers who take custody of |Office of Child Safety |
|children. |Commissioner Victoria, suggested |
| |making PPL available to non-parent|
| |carers who take custody of |
| |children in exceptional |
| |circumstances (such as |
| |grandparents). |
|Paymaster function to exclude |Business and industry groups |
|additional employer obligations |expressed concerns about the |
|for accrued leave entitlements, |hidden costs to business resulting|
|impacts on notice period and |from accrual of additional leave |
|severance payments, and any |during a PPL period, workers |
|impacts on payroll tax or |compensation liabilities and |
|workcover obligation. This |payroll tax. |
|exclusion will be reconsidered as | |
|part of the proposed three year | |
|review. | |
|Income from statutory PPL will not|FaHCSIA provided advice to the PC |
|count as income for the purposes |about interactions of PPL with |
|of calculating parenting payments |family assistance and income |
|and other income support payments.|support. Some low income families|
| |would have received less financial|
| |assistance under the PC's draft |
| |PPL scheme than if they had |
| |obtained only the baby bonus, |
| |family assistance and income |
| |support entitlements. |
|Removal of lower rate of payment |Some unions and women's groups |
|for juniors and others receiving |raised equity concerns regarding |
|wages less than the Federal |the PC draft recommendation that |
|Minimum Wage. |juniors and others earning below |
| |minimum wage rates would receive a|
| |lower rate of payment from the PPL|
| |scheme. |
| | |
| |The draft PC report noted that a |
| |large differential between pre- |
| |and post-birth earnings for those |
| |on less than minimum wage rates |
| |might act as an inducement to |
| |early childbearing for some |
| |mothers. The PC reconsidered its |
| |position, taking note of the fact |
| |that the existing welfare system |
| |already provides a rate of payment|
| |post-birth that would |
| |substantially exceed the |
| |employment earnings of low wage |
| |groups. |
8. Conclusion and Recommended Option
Based on the analysis of the impacts of the options on families, the
broader community, Government and business and the costs of the options for
business and government, the Government's preferred PPL option could be
either:
. The PC's proposed PPL scheme, or
. The PC's proposed PPL scheme with the paternity leave component
deferred.
The final Government decision on its preferred option should depend on its
consideration of the weight to be placed on:
. The fact that the PC's proposed scheme has already been the subject of
an open consultative process and the design of the final model has
sought to balance the competing interests of parties and tensions
between the scheme's objectives. The PC's proposed PPL scheme is
assessed as being best able to meet the identified objectives, in
particular the objective of promoting gender equity and work/family
balance through more active involvement of fathers and other partners
in child rearing and in achieving better child development outcomes.
. Concerns about the current Budget situation, requiring short term
fiscal stimulus and efforts to ensure the Budget returns to surplus
over the economic cycle. Deferral of the paternity leave component
would provide significant savings with only a moderate adverse impact
on the achievement of the scheme's objectives.
The 'Take no action' option was not recommended as it fails to address the
problem identified in section 2 of the RIS.
9. Implementation and Review
The earliest implementation date for the proposed scheme with employers as
paymasters is 1 January 2011. The scheme would be implemented primarily by
Centrelink and Medicare Australia, with FaHCSIA and DEEWR being the key
policy agencies.
The Government will consult with business groups (including small business)
and employers between August and December 2009.
Program implementation and the first year of program operations will be
monitored on a continual basis to ensure that administrative arrangements
being introduced do not have unforeseen adverse consequences for parents,
employers or Government.
The Government will conduct a comprehensive review of the program at the
end of its first two years. The Review will require the collection of
relevant baseline data, ongoing monitoring of relevant publicly available
and administrative data and post implementation surveys. The scope of the
review would include:
. the effectiveness of PPL in meeting its main objectives;
. assessment of the impacts of the scheme on leave taken by parents,
including the impact of design features (such as employment
eligibility criteria and benefit levels) on who is accessing the
scheme;
. assessment of the impacts of the scheme on existing voluntary employer-
provided PPL schemes;
. employer attitudes to and support for work/family balance and gender
equity in childrearing;
. the viability of implementing mandated superannuation contributions by
employers at that time;
. the scheme's administrative impact on business, in particular the
regulatory impacts and costs on business of the paymaster function;
. whether employer-funded accrued leave or other entitlements should
still be outside the scope of the statutory scheme.
Key performance indicators (KPIs) for the preferred option could include:
. Proportion of women working prior to birth.
. Rate of women resigning prior to birth.
. Average period of leave taken by mothers following the birth of the
child.
. Average period of leave taken by fathers following the birth of the
child.
. Rate of return to work by mothers following birth of the child.
. Rate of return to former employer by mothers following birth of the
child.
. Rate of women returning to work prior to child reaching six months of
age.
. Rate of breastfeeding children to six months.
The review would be followed by Government consideration of potential
changes to the program, such as the possible introduction of the paternity
leave component of the PC's proposed scheme as well as the possible
introduction of mandated superannuation contributions by employers during
the PPL period.
-----------------------
[1] After adjusting for the fact that published statistics for many OECD
countries count women on paid maternity leave as in the labour force,
whereas women on unpaid leave in Australia are not.
[2] Productivity Commission Inquiry Report, Paid Parental Leave: Support
for Parents with Newborn Children, p3.7
[3] ABS, Career Experience, Australia (Cat No 6254.0), November 2002, Table
14.
[4] ABS, Career Experience, Australia (Cat No 6254.0), November 2002, Table
14.
[5] ABS, Career Experience, Australia (Cat No 6254.0), November 2002,
unpublished data.
[6] AWOTE for full-time employees, original data, November 2008, EEH
unpublished original data, May 2006.