SMEs warned to get up to speed on new parental pay scheme: What you need to know

Just as businesses were getting used to the idea of the federal government’s maternity leave scheme, experts are warning SMEs to stay on top of the latest addition to parental benefits – Dad and Partner Pay.

But SMEs annoyed by having to administer the government’s maternity leave payments should take heart, with the government saying all payments will be administered by its own services without requiring the business to act as a paymaster.

Business groups continue to protest the maternity leave scheme, which requires businesses pass on the government’s payments to the employee in question.

Partner at law firm TressCox, Rachel Drew, told SmartCompany this morning businesses need to get up to speed on the scheme, which began on January 1, as it may “need a period of time to get used to it”.

“It’s probably going to take some employers by surprise there is this government-funded paid period,” she says.

“They just need to be aware that it’s not the employer paying for this, and the scheme may encourage more partners and dads to take time off whereas they might not have previously done so.”

The new entitlement provides two weeks of government-funded pay at the minimum wage for eligible working dads and partners, including adoptive parents and same-sex partners, whose child is born or adopted after January 1.

Some self-employed, contractor and casual workers may also be eligible for the payments, which will be fully administered by the government.

To be eligible, claims must be lodged by the father or partner up to three months before the expected date of birth or adoption, or within 12 months following their child’s birth or adoption. Applicants must have worked for at least 10 of the 13 months prior to the pay period, and have worked at least 330 hours in that 10-month period.

Workers earning more than $150,000 per year will not be eligible, and during the pay period, the recipient cannot receive paid leave from their employer.

Drew says businesses will need to work with staff in order to figure out when the leave should be taken, but says the scheme is similar to the maternity leave program and businesses already have an idea of what to expect.

“The usual parental leave rules apply from the Fair Work Act, and set out those obligations,” she says.

“There may be an impact, where a dad might have taken a week or two weeks, they may take a little longer now. But it’s not going to be coming out of the employer’s pocket.”