A question that does pop up a lot is, "my employee is about to take maternity leave, can i continue to pay them for say 4 weeks after they leave for there maternity leave period as a goodwill gift along with the governments payments they receive" ?
There are two parts to this, so lets step through first how the government scheme works.
Financial support is offered for up to 18 weeks to help eligible parents take time off work to care for a newborn or recently adopted child. Amount paid is the minimum award wage and equates to $657 per week paid to your employer or to you directly (default tax rate of 15% is applied) and is a taxable payment and is not subject to the SCG Superannuation levy.
Total value of PLP payments before tax is $11,826.
To be eligibility for the PLP payments a few test need to be met:
Be the primary carer of a newborn or recently adopted child
Meet the Paid Parental Leave work test
Meet the Paid Parental Leave income test
Be on leave or not working from the time you become your child's primary carer until the end of your Paid Parental Leave period
Lets look at the tests first
To meet the work test for Parental Leave Pay you must have worked for at least 10 of the 13 months before the birth or adoption of your child, and 330 hours in that 10 month period, which is just over 1 day a week, and had no more than an 8 week gap between 2 consecutive working days.
There are some exceptions to the work test if pregnancy complications or a premature birth have prevented you from meeting it, a letter from the doctor would be required. A working day is a day when you have worked for at least 1 hour. You can count periods of paid leave towards the work test but periods of unpaid leave do not count.
Parental Leave Pay period does not count towards
the work test.
The business doesn’t not need to make a profit for the person in question as long as that person works for a financial gain.
The income test requires an individual adjusted taxable income of $150,000 or less in the financial year either before
the date of birth or adoption, or the date you
claim, whichever is earlier.
For more information on adjusted taxable income see
You must be on leave or not working from when you become the child's primary carer until the end of your Paid Parental Leave period. The Maximum for the government payments is 18 weeks.
You cannot receive Parental Leave Pay and
Newborn Upfront Payment and Newborn Supplement
for the same child.
The the answer to this question is that given the employee meets all the requirements listed above and is entitled to receive the governments 18 week parental leave pay (or maternity leave pay). They would not be able to receive a wage/salary at the same time, you can agree to pay a return bonus to encourage them coming back after 18 weeks or pay a bonus prior to them leaving to begin there maternity leave.
Disclaimer: The information provided here is general in nature only and actual outcomes with the child’s
birth may have alternative effects on the claiming of the
Parental Leave Pay and to
her government benefits payable.