Paid Parental Leave: Dad and Partner Pay

Minister's Foreword

Australia caught up with the rest of the developed world when the clock ticked over to 2011, with the introduction of Australia's first national Paid Parental Leave scheme.

For the first time, eligible working parents (usually mothers) are entitled to 18 weeks of Parental Leave Pay at the National Minimum Wage, funded by the Australian Government.

Since the scheme started, more than 89,000 Australian families have applied for Paid Parental Leave, and 62,000 are either receiving Parental Leave Pay right now, or have finished their payment.

When you welcome a new baby into the world, and a parent takes time off work to care for the baby, it's reassuring to know there will be some financial support to help balance the family budget.

Paid Parental Leave is important because it provides this reassurance, but it also gives mums time to recover from the birth, establish breastfeeding and develop the bonds with their baby that will last for a lifetime.

We know that it's not just mum who needs the time to form these important bonds with a new baby, so we are extending the Paid Parental Leave scheme to give fathers and other partners a payment of their own.

From 1 January 2013, fathers and other eligible partners will receive two weeks Dad and Partner Pay to help them take time off work to support new mothers in their caring role and to be involved in the care of their new baby right from the start.

This is good for dads, good for mums, and gives babies the best start in life.

This additional financial assistance will be especially important for fathers who find it difficult to balance the family budget when their baby is born, such as casual employees without annual leave entitlements and self-employed people like tradespeople, small business owners and those working in a family business or farm.

It took until 2011 for Australia to catch up with the developed world by introducing Paid Parental Leave, and we don't want Australian dads to be left behind again.

Dad and Partner Pay delivers on an election commitment of the Australian Government.

In line with our commitment, we want to hear the views of families, employers and the community on how best to introduce this payment.

I encourage you to take the opportunity to provide feedback as we work towards implementing this new component of the Paid Parental Leave scheme.

Thank you for taking the time to make your voice heard.

The Hon. Jenny Macklin MP

Former Minister for Families, Housing, Community Services and Indigenous Affairs

1. Paid Parental Leave: Dad and Partner Pay at a glance

Dad and Partner Pay will be a new dedicated payment for fathers and partners under the Australian Government's national Paid Parental Leave scheme. It will give fathers and other partners financial support to take time off work to support new mothers in their caring role, and help them recover from the birth. It will also help fathers to establish bonds with their new child and be involved in their child's care from an early age.

The new payment will be available to eligible working fathers and partners (including adopting parents and parents in same-sex couples) who share the role of caring for a child born or adopted from 1 January 2013.

Eligible working fathers and partners will be able to receive two weeks Dad and Partner Pay at the rate of the National Minimum Wage (currently around $590 a week before tax), the same weekly rate as Parental Leave Pay.

The residency requirements, income test and work test for Dad and Partner Pay will be consistent with the current Paid Parental Leave Scheme. Dad and Partner Pay will be available to eligible full-time, part-time, casual, seasonal, contract and self-employed workers.

Dad and Partner Pay will be available to fathers and other partners who meet the eligibility requirements, regardless of whether the mother has been in paid work or at home prior to the birth or adoption. A father can be eligible for Dad and Partner Pay even if a mother is not receiving Parental Leave Pay.

Dad and Partner Pay can be taken before, after or at the same time as other family assistance like the Baby Bonus and Family Tax Benefit.

Consistent with the recommendation of the Productivity Commission, Dad and Partner Pay will be available in addition to any employer-funded paid leave but cannot be taken at the same time the employee is taking paid leave. This will encourage fathers to take more time off to care for their child in those critical early months.

Dad and Partner Pay also cannot be transferred to the primary carer (usually the mother). This 'use it or lose it' provision will encourage fathers and other partners to take some time off, and signals to employers that a father's role in caring for a new baby is important.

The Australian Government is providing $188.5 million over five years to extend the Paid Parental Leave scheme to include Dad and Partner Pay.

Full details of the new payment are yet to be finalised. The Government is seeking comments on this policy statement to help inform the final policy and implementation arrangements for Dad and Partner Pay.

2. Why the Paid Parental Leave scheme needs a dedicated payment for fathers and other partners

Most fathers (around 75 per cent) do take some time off around the time of the birth of a child but that time is usually short and most use non-parental paid leave such as annual leave.

The fact that fathers tend to rely on paid leave is not surprising. New fathers and partners often have to balance the need to be the main source of family income after the birth of a child with wanting to spend time with their new baby and supporting their partner.

Dad and Partner Pay will recognise and support the increasing role that fathers are playing in caring for children, helping to reinforce that caring for children is an ordinary part of work and family life for men and women.

The involvement of fathers in children's lives has many positive benefits for children. Dad and Partner Pay recognises the critical importance of the early months in a child's life for bonding and social and emotional development. International experience tells us that a father's involvement in the early years of a child's life leads to increased involvement throughout the entire childhood.

Dad and Partner Pay provides the assistance that families need to make their own decisions about balancing work and family - and balancing the caring role between mum and dad.

In 2008, the Australian Government asked the Productivity Commission to investigate whether Australia would benefit from a paid parental leave scheme and what kind of model would work best. The Commission conducted an extensive inquiry, taking public submissions and consulting widely. In its final report Paid Parental Leave: Support for Parents with Newborn Children, the Productivity Commission recommended a paid parental leave scheme that included two weeks paid paternity leave.

The Productivity Commission found that a paid parental leave scheme incorporating paid paternity leave for fathers and partners would have significant benefits, including:

reducing the pressures of caring and working on parents when their children are young
increasing the involvement of fathers in the early months of a child's life, and
providing a strong signal that taking time out of the paid workforce to care for a child is viewed by the wider community as part of the usual course of life and work for parents.

Productivity Commission, Final Inquiry Report: Paid Parental Leave -“ Support for Parents with Newborn Children (2009) xxiv.

'Evidence suggests that paternity leave has emotional benefits for fathers, facilitates bonding between fathers and children, positively affects children's emotional and educational achievements and provides support for the mother' [Productivity Commission, 4.52].

Dad and Partner Pay will provide important financial assistance to Australian families, with lasting benefits for child development and the way that families share caring roles. Dad and Partner Pay will complement existing arrangements under the Paid Parental Leave scheme to help families make their own decisions about balancing paid work and family life.

3. Eligibility

The new payment will be available to eligible working fathers and partners, including adopting parents and parents in same-sex couples.

Full-time, part-time, casual, seasonal, contract and self-employed workers may be eligible for the payment.

To be eligible for Dad and Partner Pay, a person will need to:

be an Australian resident
be providing care for a child born or adopted on or after 1 January 2013
meet the Paid Parental Leave work test. A person will meet the work test if they:
- have worked continuously for at least 10 out of the 13 months prior to the start date of their Dad and Partner Pay , and
- worked for at least 330 hours in that 10 month period (an average of just over one day a week) with no more than an eight week gap between two consecutive working days
have an individual adjusted taxable income of $150,000 or less in the financial year prior to the date of birth or adoption or the date of their claim, whichever is earlier.

Dad and Partner Pay will not be available to birth mothers. Eligible birth mothers can claim up to 18 weeks Parental Leave Pay or the Baby Bonus.

There may also be exceptional circumstances where a partner of a non-parent carer could receive Dad and Partner Pay. The Government invites views on this issue.

In the tragic event of a still birth or neonatal death, Dad and Partner Pay will still be payable.

It is expected that most parents will choose to take leave during the crucial bonding period following birth or adoption but the payment can be taken any time within 12 months of the birth or adoption of the child. Dad and Partner Pay will be payable once for each birth or adoption event, including in the case of a multiple birth.

Dad and Partner Pay will need to be taken in one instalment. An eligible father or partner could still receive unused Parental Leave Pay from the birth mother or their partner in addition to their Dad and Partner Pay but cannot take them at the same time. However, a father or partner will only be eligible to receive a maximum of 18 weeks of combined Parental Leave Pay and Dad and Partner Pay, in order to maintain equity with the maximum Parental Leave Pay entitlement for birth mothers.

4. The financial benefits for new parents

Eligible fathers and partners will be able to receive two continuous weeks of Dad and Partner Pay at the rate of the National Minimum Wage, currently $589.40 a week before tax (a total of $1,178.80 before tax).

A family may receive Parental Leave Pay in addition to Dad and Partner Pay (a maximum total pre-tax payment of $10,609 Parental Leave Pay + $1,179 Dad and Partner Pay).

Families eligible for Dad and Partner Pay may also receive other family assistance payments such as Baby Bonus and Family Tax Benefit. Dad and Partner Pay will count as income for family assistance payments.

Dad and Partner Pay will not be treated as income for income support payments including Parenting Payment (partnered and single), Disability Support Pension and Newstart Allowance.

Employers will not be required to pay superannuation contributions in respect of Dad and Partner Pay but may do so if they wish.

Example 1 - Parents taking Parental Leave Pay and Dad and Partner Pay together

Lola and Stephano are expecting their first child. They are eligible for Parental Leave Pay and Dad and Partner Pay and both are entitled to unpaid parental leave under the National Employment Standards (NES) because they have been with their employers for more than 12 months.

Lola would like to take 12 months leave. Stephano would also like to take some leave immediately after the birth to support Lola and bond with their newborn child.

Both parents take time off when the baby is born using the three weeks unpaid leave they are entitled to take together under the NES. Lola starts her 18 weeks Parental Leave Pay from the birth and Stephano takes his two weeks Dad and Partner Pay, then a third week without pay.

With Dad and Partner Pay Stephano can spend three weeks bonding with his new baby.

Example 2 - Parents taking Parental Leave Pay and Dad and Partner Pay separately:

Sarah and Emily are adopting their first child. Both are eligible for Parental Leave Pay and Dad and Partner Pay as well as unpaid parental leave under the NES.

The couple agree that Sarah will provide primary care from the time the child comes into their care. Sarah takes 18 weeks Parental Leave Pay and then returns to work. Emily then takes two weeks unpaid leave with Dad and Partner Pay to provide primary care for their child.

By taking the two payments separately, Sarah and Emily are able to extend the period of time that they can receive pay while spending time caring for their child at home to 20 weeks.

5. Claiming Dad and Partner Pay

A claim for Dad and Partner Pay may be lodged with the Family Assistance Office up to three months before the birth or adoption of a child. Claimants will need to provide sufficient evidence to demonstrate their eligibility, including work history, if required.

Claimants will need to nominate their start date for Dad and Partner Pay. Dad and Partner Pay can be taken from the date of birth or adoption, while a father or partner is on unpaid leave from work or not working.

Dad and Partner Pay cannot be taken at the same time as the claimant's transferred Parental Leave Pay or when the claimant is on employer-funded paid leave. The full entitlement of Dad and Partner Pay must be received within 12 months of the birth or adoption.

6. The role of employers

The Paid Parental Leave scheme has been designed to be as simple as possible for employers and that will not change with the introduction of Dad and Partner Pay.

Employers play an important role in delivering Parental Leave Pay to long-term employees under the current scheme.

It is proposed that eligible fathers and partners will generally receive Dad and Partner Pay from the Family Assistance Office.

However some employers may wish to play a role in providing Dad and Partner Pay to their employees. Employers could also play a role in providing Dad and Partner Pay to long-term employees who will be receiving at least eight weeks of Parental Leave Pay immediately before or after their Dad and Partner Pay.

As is the case now, parents will discuss and agree leave arrangements with their employer before they take leave around the time of the birth or adoption of their child.

Dad and Partner Pay will not:

attract additional workers compensation premium liabilities, or
result in the accrual of additional leave entitlements.

The Government's Dad and Partner Pay is in addition to employer-funded entitlements. The Government expects that employers will retain their existing parental and paternity leave provisions to retain their position as employers of choice for parents.

The Government invites employers and industry groups to provide comments on the potential role of employers in delivering Dad and Partner Pay for some employees. The Government will continue to work with employers to ensure the Paid Parental Leave scheme is as simple as possible for employers.

7. Interaction with existing leave entitlements

Dad and Partner Pay will provide an entitlement to pay, not an entitlement to leave, and will not be available at the same time as employer-funded paid leave. That means parents in ongoing employment will need to take the payment at the same time as unpaid leave.

These arrangements were recommended by the Productivity Commission to maximise the time that supporting parents can spend at home with their new child.

Parents who have been with their employer for 12 months or more before the birth or adoption of their child are entitled to 12 months unpaid parental leave under the National Employment Standards, with the option of extending that time by a further 12 months if their employer agrees. A family cannot exceed a total of 24 months between the two parents. Parents can take three weeks of their unpaid parental leave at the same time, starting immediately after the birth, or by agreement with their employers, within the period up to six weeks after birth.

Unlike parents eligible to receive Parental Leave Pay as a primary claimant (usually the birth mother), parents receiving Dad and Partner Pay will not be able to:

transfer unused Dad and Partner Pay to another person, or
participate in paid work activities during their Dad and Partner Pay period for the purpose of 'keeping in touch' with their workplace.

Employers who provide parental or paternity leave entitlements through an industrial instrument or law cannot withdraw those entitlements for the life of that instrument or law. The Government expects that employers will retain their existing parental and paternity leave provisions to retain their position as employers of choice for parents.

8. Implementation

Subject to the passage of legislation, Dad and Partner Pay will commence from 1 January 2013 and will be available to eligible fathers and partners for births and adoptions that occur on or after that date.

Fathers and partners will be able to lodge their claim for Dad and Partner Pay up to three months prior to the birth or adoption. This means first claims could be lodged from 1 October 2012.

The Government expects to introduce legislation into Parliament in early 2012.

Full details for parents, employers and the community about how Dad and Partner Pay will operate in practice will be included in information products following passage of the Paid Parental Leave: Dad and Partner Pay legislation.

9. Providing feedback

The Australian Government welcomes comments on all elements of the proposed payment, including on the delivery arrangements.

Feedback on Paid Parental Leave: Dad and Partner Pay can be forwarded online to ppl@dss.gov.au or by mail to

Paid Parental Leave Branch - Dad and Partner Pay Consultation
c/- DSS
Canberra Mail Centre
Mail Box 7576
Canberra, ACT, 2610

Feedback should be provided by 17 October 2011.

Information about the Paid Parental Leave scheme for parents is available on the Family Assistance Office website at www.familyassist.gov.au or by calling the Family Assistance Office on 13 61 50.

Information about the Paid Parental Leave scheme for employers is available on the Centrelink website at www.centrelink.gov.au or by calling the Centrelink Employer Hotline on 13 11 58.

For more information about working entitlements and workplace obligations, visit the Fair Work Ombudsman website at www.fairwork.gov.au or call 13 13 94.

Last updated: 23 April 2014 - 4:17pm