House of Representatives

Paid Parental Leave (Consequential Amendments) Bill 2010

Second Reading Speech

Ms Macklin (Minister for Families, Housing, Community Services and Indigenous Affairs)

I move:

That this bill be now read a second time.

This companion bill to the Paid Parental Leave Bill 2010 makes consequential amendments necessary for the operation of the government's landmark Paid Parental Leave scheme.

Our Paid Parental Leave scheme, to begin on 1 January 2011, is fully costed and funded by the government and is a major win for working families.

After decades of waiting for a paid parental leave scheme, this government is delivering a scheme which is fair to business and fair for families.

This bill amends various Commonwealth acts for this purpose, dealing with interactions between the new parental leave pay provisions and existing laws such as those on social security, veterans' entitlements, family assistance and taxation.

Some of the amendments address the relationship between parental leave pay and income for certain purposes in the social security law and veterans' entitlements legislation. Notably, the bill gives effect to the government's intention that parental leave pay be excluded from the ordinary income test for social security and veterans' entitlements purposes.

Similarly, parental leave pay will not count as a leave payment for the purposes of the social security income maintenance provisions, and will be disregarded in calculating a person's pension bonus bereavement payment.

Parental leave pay will, however, be counted under the separate income test for the social security low-income healthcare card.

To protect the integrity of the new parental leave pay in a way that is consistent with arrangements for existing payments, parental leave pay debts will generally be recoverable from social security, family assistance and veterans' entitlements payments.

Further amendments will enable amounts due under a maintenance liability and child support debts to be paid or recovered from parental leave pay.

Provision will also be made for parental leave pay to be included in the compliance activities provided by the data-matching program.

The bill will address several points of interaction between the new Paid Parental Leave scheme and the existing family assistance law.

In particular, new provisions will make sure that, as intended, families receiving parental leave pay will not be able to receive the baby bonus, and family tax benefit part B will not be payable for the duration of the parental leave pay. Those families not eligible for Paid Parental Leave, or who choose not to participate in the scheme, will be able to continue to access the baby bonus and family tax benefit if they are eligible.

The bill will also allow early claims to be made for family tax benefit, baby bonus and maternity immunisation allowance so that families can, if they want to, make all their payment arrangements before their new child arrives in the family, with all the accompanying excitement and loss of sleep.

Among the amendments to the taxation laws included in this bill are amendments to provide that a taxpayer will not be entitled to a dependent spouse, child-housekeeper or housekeeper rebate for that part of the income year for which parental leave pay was payable to the taxpayer or their spouse. This is consistent with the rules that apply where the taxpayer or their spouse is eligible for family tax benefit part B.

Parental leave pay will be subject to PAYG withholding, and employees will be able to salary sacrifice their parental leave pay for non-cash remuneration where that arrangement is offered by the employer.

Further taxation amendments will make sure that tax withheld from a person's parental leave pay can be refunded to the person if it turns out that the parental leave pay was not payable. The rules relating to payment summaries will also be amended to deal with incorrect payments of parental leave pay.

Consistent with the protection and use of taxpayer information for similar payment laws, the parental leave pay scheme will be brought within the system of tax file numbers established under taxation laws, and it will be possible for taxpayer information to be disclosed for the purposes of administration of the new Paid Parental Leave Act 2010.

Lastly, the bill deals with certain aspects of the transition to the new Paid Parental Leave scheme. These provisions include ensuring that the requirement for employers to pay parental leave pay to their long-term employees will take effect for children born or adopted on or after 1 July 2011. However, some employers may want to take up the option of providing any eligible employees with parental leave pay from 1 January 2011.

With the delivery of this scheme, the government is supporting Australian parents to manage the challenges and realities of family life.

Our scheme gives parents more time at home with their new baby, helps maintain their connection with the workforce and, by boosting workforce participation, is a landmark reform that prepares Australia for the challenges of the future.

I commend the bill to the House.

Debate (on motion by Mr Andrews) adjourned.