Rudd Government to Introduce Paid Parental Leave

The Rudd Government will deliver an historic Paid Parental Leave (PPL) scheme to support Australian families and prepare Australia for the economic and social challenges of the future.

This government-funded scheme will provide the primary carer with 18 weeks post-natal leave, paid at the adult federal minimum wage (currently $543.78 per week).

The cost of the scheme – approximately $260 million per annum – is a vital investment in improved productivity and workforce participation.

The scheme will not commence until 1 January 2011, giving the community and businesses time to prepare.

Paid Parental Leave will be delivered in a responsible and sustainable way which takes into account the impacts of the global recession.

The scheme will come into effect when the economy is expected to be recovering and the economic outlook improved.

To ensure the scheme is delivered in an affordable way, it will not mandate paid paternity leave at this time and employers will not be required to pay superannuation on Paid Parental Leave entitlements.

Currently, Australia is one of just two OECD countries without a national statutory paid parental leave scheme, along with the United States.

This historic Paid Parental Leave scheme will encourage women to stay connected to their jobs.

This will boost workforce participation which will be essential in meeting the economic and social challenges of an ageing Australian population.

Paid Parental Leave will help Australian families find a better balance between work and caring responsibilities and will allow mothers to spend vital time with their newborn babies.

The scheme is a huge step forward for all mothers and especially for low and middle-income earners who generally have less access to employer-funded parental leave schemes.

In 2007, less than one quarter of women on very low wages had access to paid maternity leave, compared to three quarters on high wages.

The government-funded scheme will be based closely on the recommendations of the final report of the Productivity Commission Inquiry into Paid Parental Leave: Support for Parents with Newborn Children, which will be released with the 2009-10 Budget.

However, the scheme will be targeted so that taxpayers’ funds go where they are most needed.

To ensure the scheme is responsible and sustainable over the long-term, high income primary carers earning over $150,000 will not be eligible.

The Baby Bonus and Family Tax Benefits will continue to be available for mums who choose to stay at home. A stay at home mum with a partner on average earnings will continue to receive around $12,000 in government assistance in the year after the birth of their baby.

However recipients of the Government’s Paid Parental Leave scheme will not be eligible to also receive either the Baby Bonus or Family Tax Benefit Part B.

The Rudd Government is proud to work with Australian mothers, families and businesses to meet the challenges of the 21st century.