Senate

Explanatory Memorandum

Circulated By the Authority of the Minister for Families, Housing, Community Services and Indigenous Affairs, the Hon Jenny Macklin MP

OUTLINE

This bill amends various Commonwealth Acts as a consequence of the introduction of the Paid Parental Leave Bill 2010. This bill also provides for certain transitional matters, including provisions to ensure that the requirement for employers to pay parental leave pay to their employees will take effect for children born or adopted on or after 1 July 2011 (although employers will be able to opt in to provide any eligible employees with parental leave pay from 1 January 2011).

The bill includes amendments to:

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address the relationship between parental leave pay and income for certain purposes in the social security law and veterans' entitlements legislation;

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enable parental leave pay debts to be recovered from social security, family assistance and veterans' entitlements payments;

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

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ensure that a person and their partner cannot receive both baby bonus and parental leave pay for a child and make related baby bonus changes;

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ensure that a person and their partner cannot receive family tax benefit Part B for a child for the period for which parental leave pay is payable in relation to the child;

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provide for early claims for family tax benefit, baby bonus and maternity immunisation allowance; and

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include parental leave pay within the compliance activities provided for in the data-matching program.

This bill also makes changes to various taxation laws. These include amendments to ensure that:

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a taxpayer will generally 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;

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parental leave pay is subject to PAYG withholding;

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employees can salary sacrifice their parental leave pay for non-cash remuneration where that arrangement is offered by the employer;

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parental leave pay is appropriately covered within the system of tax file numbers established under taxation laws;

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taxpayer information can be disclosed for the purposes of administration of what will become the Paid Parental Leave Act 2010 ;

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tax withheld from parental leave pay that was not payable can be refunded; and

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incorrect payments of parental leave pay are not included on the taxpayer's payment summary if the error is detected in time, or, if not detected in time, notice is given that an issued payment summary is not correct.