House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Families and Social Services, Senator the Hon Anne Ruston)

SCHEDULE 1 - FLEXIBLE PAID PARENTAL LEAVE

Summary

This Schedule supports women's workforce participation by allowing PLP to be accessed more flexibly. The Bill will enable flexibility in taking PPL by allowing eligible families to take up to 30 days of PLP within 24 months of the birth or adoption of the child, in addition to 12 weeks of PLP within 12 months of the child's birth or adoption.

Background

Under section 11 of the Act, a person's PPL period is the period for which PLP is payable to the person. The maximum duration of a person's PPL period is 18 weeks. Currently, a person cannot separate their PPL period. Rather, PLP is payable to an eligible person in a continuous block of up to 18 weeks if the person claims within 12 months of the birth or adoption of the child.

Each year, approximately 2,300 people access only a portion of their PLP before returning to work. Under paragraph 31(2)(e) of the Act, a person who has returned to work is no longer eligible for PLP for a child. The new arrangements will remove this requirement for PLP that is claimed in a person's flexible PPL period.

Under changes made by this Schedule, claimants will be able to take:

•

up to 12 weeks of PLP in a continuous period within 12 months of the birth or adoption of the child; and

•

up to 30 days of PLP in their flexible PPL period, which usually starts after the person's PPL period ends, and finishes 24 months after the birth or adoption of the child.

Parents will be able to return to work at any time following their PPL period and still claim 30 days of flexible PLP. This means that women can return to work earlier after giving birth or adopting a child without compromising their overall entitlement to PLP.

This change reflects the range of working demands and personal preferences that women may have in relation to their return to work after giving birth. The measure will be particularly beneficial to the increasing number of women who may be running their own business or have career goals that may be enhanced by the additional flexibility.

The amendments made by this Schedule commence on 1 April 2020.

Explanation of the changes

AMENDMENTS TO THE FAMILY ASSISTANCE ACT

These amendments are consequential to the amendments to the Act. The Family Assistance Act includes eligibility provisions for persons to receive family tax benefit. Schedule 1 of the Family Assistance Act sets out how to calculate the rate of that benefit for an individual. In some cases, individuals may be eligible for a higher rate when they have a newborn baby. This is called the "newborn supplement".

Under the existing provisions, however, a person's rate of family tax benefit is not increased for newborn supplement if they are receiving PLP in relation to the child. Further, if the person receives newborn supplement in relation to a child, and later on, PLP becomes payable to the person in relation to that child, then the person will owe a debt to the Commonwealth equal to the amount of newborn supplement they received.

The amendments in items 1 to 5 amend the Family Assistance Act to ensure that this policy is maintained in light of the changes to the Act.

Item 1 inserts a definition of 'continuous flexible period' that refers to the new definition of that term in the Act, to be inserted by this Bill.

Item 2 repeals the definition of 'eligible for PLP' because that term is not used in the Family Assistance Act or the Family Assistance Administration Act.

Item 3 inserts a definition of 'has a continuous PPL period' that refers to the new definition of that term in the Act, to be inserted by this Bill.

Item 4 amends clause 28C of Schedule 1. At present, clause 28C of Schedule 1 ensures that a person's family tax benefit Part B rate is nil if the day occurs during a PPL period. This amendment ensures that the person's Part B rate will be nil for a day if, on that day, PLP is payable to the person. This is to ensure that Part B rate will be nil if the person is receiving PLP on a flexible PPL day.

Item 5 repeals and replaces subparagraphs 35A(9)(b)(i) and (ii) of Schedule 1.

Clause 35A concerns eligibility for newborn supplement.

There are two substantive paragraphs in clause 35A that are relevant to PLP. The first, clause 35A(8), does not require amendment because its terms are capable of applying to both PLP in the PPL period and PLP in the flexible PPL period that will be introduced by this Bill.

The second, clause 35A(9), relates to what happens if a person's partner is receiving PLP. The policy behind this clause is to ensure that, so long as the person and their partner are members of a couple for the period during which the person's partner is receiving PLP, the person should not receive newborn supplement.

The amendments made by this clause essentially maintain this policy in relation to a continuous period of leave taken by the person's partner. This might include the PPL period, as well as any continuous flexible period the person's partner may have.

This clause does not deal with the circumstance where the person's partner claims PLP on a flexible PPL day that falls outside the person's partner's continuous flexible period.

AMENDMENTS TO THE FAMILY ASSISTANCE ADMINISTRATION ACT

The Family Assistance Administration Act relevantly includes provisions on the effectiveness of claims for stillborn baby payment and how those claims are to be determined. As its name suggests, stillborn baby payment is available to certain parents whose children were born stillborn or died shortly after birth.

A person is not eligible for stillborn baby payment if they are receiving PLP in relation to the child who was stillborn or died.

In general, a claim for stillborn baby payment must be made within 52 weeks of the day of the birth of the stillborn child: see section 39. However, there is an exception to this rule if the person made a claim for PLP in relation to that child and the claim is rejected less than 13 weeks before those 52 weeks are up or after those 52 weeks have passed. In that case, the policy is that the person should still be able to make a claim for stillborn baby payment-since the person may have assumed (wrongly) that they would be eligible for PLP.

Similarly, section 41 sets out when the Secretary must determine the claim. Section 41(3) generally provides that if the person has made a claim for stillborn baby payment and a claim for PLP in relation to the same child, then the Secretary must not determine the claim for stillborn baby payment until either:

-

the Secretary rejects the claim for PLP, or

-

the claim for PLP is withdrawn; or

-

if the Secretary determines that PLP is payable-the person's PPL period starts or the Secretary revokes that determination.

The purpose of this provision is to ensure the claim for stillborn baby payment is essentially held in abeyance until the person actually starts receiving instalments of PLP.

The amendments in items 6-9 ensure the policies behind sections 39 and 41 are maintained in light of the changes to the Act.

Item 6 inserts definitions of 'flexible PPL day' and 'maximum PPL period' that refer to the definitions of those terms in the Act.

Item 7 repeals and replaces subparagraph 39(4)(b) to ensure that the notice of rejection given under section 24 must state that the person is not eligible at all for PLP, including in the flexible PPL period. This is because under the new arrangements, a person may be ineligible for PLP in the PPL period, but still be eligible for PLP in the flexible PPL period, which may occur in the second year after the child is born.

Therefore, a person should only get the benefit of the extension in time to claim stillborn baby payment if they have been notified that they are not eligible (or conditionally eligible) for any PLP in the flexible PPL period, as well as being notified that they are not eligible for PLP in the PPL period (where this is applicable).

Item 8 repeals and replaces subparagraphs 41(3)(c) and (d). These amendments ensure that the Secretary will hold the claim for stillborn baby payment in abeyance until the person begins to be paid PLP.

Subparagraph 41(3)(c)(i) replicates existing subparagraph 41(3)(c)(i).

Subparagraph 41(3)(c)(ii) effectively replicates existing subparagraph 41(3)(c)(ii), but with an update to reflect the change to section 25 of the Act, which deals with revocation. Under the new arrangements, a person will have until the last day of the instalment period to request to revoke a payability determination for a flexible PPL day. The amendment to subparagraph 41(3)(c)(ii) ensures that people who use this mechanism and are not paid PLP because a payability determination has been revoked will have their claim for stillborn baby payment determined.

New subparagraph 41(3)(c)(iii) fully replicates the existing subparagraph 41(3)(c)(ii).

New paragraph 41(3)(d) ensures that the notice of rejection given under section 24 must state that the person is not eligible at all for PLP, including in the flexible PPL period.

AMENDMENTS TO THE ACT

Amendments to the objects section and the guide

Item 9 amends the objects section of the Act. Subsection 3A(1) currently provides that the object of PLP is to provide support for primary carers of 'newborn and newly adopted children'. As the amendments made by the Schedule will allow PLP to be claimed on any day until the child's second birthday, it is no longer appropriate for the objects of the Act to be limited in this way.

Item 10 inserts new paragraph 3A(1)(d) to emphasise that an object of the Act is to provide carers with greater flexibility to balance work and family life.

Items 11-16 amend section 4, which contains a simplified guide to the Act.

These clauses are consequential to the other amendments made by the Bill, and explain how the Act as amended will operate at a high level.

Amendments to definitions to facilitate the changes

Item 17 inserts two new definitions into the Act.

A ' conditional eligibility determination ' will be made where the Secretary determines that a claim for PLP is to be rejected because the claimant does not meet one of the eligibility criteria. If the claimant is rejected but satisfies the work test and the income test, the Secretary will generally be required to make a determination that the person is 'conditionally eligible' to claim PLP in the flexible PPL period in relation to the child.

This new statutory concept applies in relation to claims for PLP in the PPL period, as well as for claims for PLP in the flexible PPL period. Its purpose is to ensure that people who have already applied for PLP for a child are not burdened with unnecessarily complicated claim forms when they next apply for PLP in relation to the same child. It also ensures that people do not have to provide the same information multiple times, unnecessarily.

Item 17 also inserts a new definition of ' continuous flexible period for a child '. This term is defined by reference to new section 6A.

Item 18 repeals paragraph (a) of the definition of the term ' eligible ' in section 6 and substitutes new paragraphs (a) and (aa) to identify the provisions under which a person may be eligible for PLP in the PPL period and the flexible PPL period, respectively. Specifically:

•

new paragraph (a) refers readers to see section 31 for the definition of 'eligible' for PLP in relation to the maximum PPL period for a child (these eligibility requirements relate to the PPL period and are unchanged); and

•

new paragraph (aa) refers readers to see new section 31AA for the definition of eligible for PLP on a flexible PPL day for a child-these eligibility requirements are new, reflecting the different eligibility requirements for PLP in the flexible PPL period.

Item 19 inserts definitions for the new terms ' employer notice ', ' expected PPL period ', ' farm household allowance ' ' flexible PPL day ', ' flexible PPL period ', ' has a continuous PPL period ' and ' has not previously satisfied the work and income tests ' into section 6 of the Act.

These definitions are new to the Act and enable the introduction of flexible PPL.

The term ' employer notice ' refers to three different notices given by the Secretary to advise employers of the length of the period they will be required to pay for.

This new definition allows the provisions requiring employers to pay instalments of PLP (subsections 72(1) and (1A)) to define the scope of that payment obligation by reference to the period, or periods, specified in the most recent notice sent by the Secretary to employers under sections 102, 113 or 114, as relevant.

The term ' farm household allowance ' is defined by reference to the Farm Household Support Act 2014.

The terms ' flexible PPL day ' and ' flexible PPL period ' will refer the reader to new section 11D.

The term ' has a continuous PPL period ' is defined by reference to section 6A.

The term ' expected PPL period ' deals with the situation where a person makes a pre-birth claim. In this circumstance, the expected PPL period is the period that the Secretary expects to specify as the person's PPL period once the child's birth is verified.

This term is necessary because, in order to know whether to apply the eligibility requirements for the PPL period or the flexible PPL period for a particular claimed day, the Secretary needs to know whether the day that is claimed is in the person's PPL period, flexible PPL period or neither of those periods. But if a person makes a claim before a child is born, that PPL period (and flexible PPL period) is unknowable, since the PPL period start day depends on the child's actual date of birth and when that birth is verified: see section 11(4) of the Act.

Therefore, this concept will allow the Secretary to make initial eligibility determinations and employer determinations before the child is born.

The item also defines the term ' has not previously satisfied the work and income tests '. This term applies to a person in relation to a child. If there is no payability determination in force in favour of the person in relation to the child and there is no conditional eligibility determination, the person will not have previously satisfied the work and income tests.

These definitions are necessary to ensure that claimants who satisfy the work test and the income test in relation to the child are not required to satisfy those tests each time that they claim flexible PPL days. The definitions are picked up by new subsection 31AA(d), which is inserted by item 34 of the Bill.

Item 20 amends the definition of ' initial eligibility determination '. Paragraph (a) of the new definition replicates existing paragraph (a) of the definition, but ensures that the paragraph is limited to initial eligibility determinations in relation to the PPL period. Paragraph (aa) of the new definition inserts a reference to new section 26A, which enables an initial eligibility determination to be made in relation to a claim for PLP in the flexible PPL period.

This amendment is necessary to accommodate the existence of a further type of initial eligibility determination in relation to claims for PLP on flexible PPL days.

Item 21 amends paragraph (a) of the existing definition of ' nominated start date ' under section 6 to make it clear that a nominated start date for PLP is in relation to the maximum PPL period for a child. This identifies the date that the claimant's PPL period (that is, the PPL period of up to 12 weeks) will commence, subject to the PPL period starting on a different date because of subsection 11(4) of the Act.

Item 22 amends paragraph (a) of the existing definition of ' payability determination ' under section 6, to include new sections 17A, 17B or 17C. This amendment is consequential to item 76, which inserts new provisions that will grant the Secretary power to make determinations about whether PLP for a flexible PPL day is or is not payable to a person.

Item 23 amends the existing definition of ' PPL day ' to reference new subparagraph 63(3)(a), which is the same as the previous subsection 63(3). This amendment is consequential to the amendments in item 123.

Item 24 inserts new definitions of ' social security benefit ' and ' social security pension ', by reference to their definitions in the Social Security Act 1991.

Item 25 inserts new definitions of " has a continuous PPL period " and " continuous flexible period ". These definitions will ensure that the employer role is maintained without disruption if a person claims PLP on certain flexible PPL days.

To explain this, it is necessary to give some context in relation to the current arrangements.

Given that there is only one PPL period under the current arrangements, if the employer is required to pay instalments of PLP to a person, they will generally be required to pay instalments throughout the entire period.

This will change with the amendments to be made by the Bill.

Under the amendments, if an employer determination is made, employers will continue to pay instalments during the person's PPL period, as well as for a continuous period of payable flexible PPL days that are week days and that immediately follows the end of the PPL period-that is, the person's continuous flexible period.

However, it would be unreasonable to expect employers to pay for individual days of PLP that occur in the flexible PPL period. Therefore, the Bill ensures that payments on these days will paid by the Secretary.

That change-which is designed to ensure employers are not overly burdened with administrative complexity-requires consequential changes, of which these definitions are a part.

In short, the consequential changes ensure that the employer role is maintained if a person chooses to claim PLP on flexible PPL days as if they were claiming a single continuous period made up of the PPL period and those flexible PPL days. Consequential changes to sections 72, 84, 101, 102, 105 and 107 pick up the definition of continuous flexible period and ensure that in this circumstance the employer role is functionally unchanged.

The definition of when a person 'has a continuous PPL period' provides that the period begins on the first week day after the end of the person's PPL period. A person cannot have a continuous PPL period if they have claimed PLP on a flexible PPL day that is on a weekend or public holiday. This is to ensure consistency with the current scheme, under which employers are only obligated to pay PLP on weekdays. The continuous flexible period ends on the first week day in respect of which a payability determination is not in force.

Section 6A(2) ensures that a person may have a continuous flexible period if they have made a pre-birth claim. It sets a person's continuous flexible period by reference to initial eligibility determinations made in favour of the person.

Amendments to the guide to Part 2-1

Items 26 and 27 amend section 7. Section 7 is a guide to Part 2-1, and the amendments ensure that the guide accurately reflects how the new scheme will operate.

Consequential amendments to rules for the PPL period

Items 28-41 make amendments to Division 2 of Part 2-1. At present, this Division sets out when PLP is payable to a person, and includes provisions that require payability determinations to be made in certain circumstances.

The amendments in items 5-13 ensure that the current provisions will continue to operate unchanged in relation to the person's PPL period, but will not operate in respect of PLP during the person's flexible PPL period.

Item 28 amends the heading of Division 2 of Part 2-1 to provide that Division 2 is relevant to when PLP is payable to a person for the person's PPL period. This amendment will differentiate Division 2 from new Division 2A, which is relevant to when PLP for a flexible PPL day for a child is payable to a person.

Item 29 amends the heading of section 8 to make it clear that the section deals with determinations made in respect of PLP for a person's PPL period (as distinct from determinations relating to flexible PPL days made under proposed Division 2A).

Item 30 repeals the existing note in section 8 and substitutes it with a new note to guide the reader to Division 2 of Part 2-2 for the rules about when the Secretary can make a determination under section 13, 14, 15, 16 or 17 (that is, payability determinations in relation to PLP for the person's PPL period). This amendment is consequential to item 76, which inserts new Division 2A of Part 2-2.

Item 31 amends section 9 to ensure that it only applies to determinations under sections 13, 14, 15, 16 or 17.

Item 32 amends the existing note in section 9 to make it clear that Part 2-3 is in relation to the rules about when a person is eligible for PLP for a child on a day that is not a flexible PPL day for the child. This amendment is consequential to the amendments made to Part 2-3 that introduce eligibility criteria for PLP in the flexible PPL period.

Item 33 amends section 10 to ensure that it only applies to determinations under sections 13, 14, 15, 16 or 17.

Item 34 amends subsections 10(a), (b) and (c) to make it clear that the requirements in those subsections only apply to claims for PLP in relation to the maximum PPL period for the child.

Item 35 amends subsection 11(1) to ensure that it only applies to determinations under sections 13, 14, 15, 16 or 17.

Item 36 amends subsection 11(1) to ensure that the reference to the PPL period in section 11(1) is a reference to a PPL period for a particular child.

Item 37 amends the note to subsection 11(1) to ensure that references to the PPL period are tied to a particular child.

Item 38 amends subsection 11(2) to ensure that the reference to the PPL period is a reference to a PPL period for a particular child.

Item 39 amends paragraph 11(4)(a), (b) and (c) to make it clear that the requirements in those subsections only apply to claims for PLP in relation to the maximum PPL period for the child.

Items 40 and 41 amend paragraph 11(5)(a) to update the maximum PPL period end day. Item 12 replaces the reference of 125 days with 83 days and item 13 consequently replaces the reference of 18 weeks with 12 weeks. This amendment reflects the reduction in length of the PPL period to accommodate the introduction of 30 days of flexible PPL.

New general rules about when PLP is payable in the flexible PPL period

Item 42 inserts new Division 3 at the end of Division 2 of Part 2-1. The new Division 3 will include new sections 11A, 11B, 11C and 11D.

The general rules: sections 11A, 11B and 11C

These sections set out the general rules about when PLP for a flexible PPL day is payable to a person.

The first rule, set out in section 11A, is that in order for PLP for a flexible PPL day to be payable, there must be a payability determination under section 17A, 17B or 17C that is in force.

Section 11B builds on this rule, by providing when a payability determination under section 17A, 17B or 17C cannot be made. A payability determination cannot be made for a flexible PPL day unless the person was or will be eligible for PLP on that day.

Section 11C makes clear that a payability determination under section 17A, 17B or 17C will not be made in the abstract. Rather, it may only be made after an effective claim for PLP on a flexible PPL day is made. Division 2 of Part 2-4 of the Act sets out when a claim will be effective, and item 42 of the Bill inserts a new rule setting out the requirements to make an effective claim for PLP on a flexible PPL day.

Two new concepts: 'flexible PPL day' and 'flexible PPL period'

New section 11D defines the terms ' flexible PPL day ' and ' flexible PPL period '.

These concepts are critical for the amendments in this Bill.

A ' flexible PPL day ' is a day that occurs in the flexible PPL period.

The ' flexible PPL period ' is the period that begins on the first day after the PPL period (or PPL periods) in relation to the child has ended. For example, if a primary claimant and secondary claimant have both claimed PLP under sections 14(2) and (14)(4) of the Act, then the flexible PPL period for a child will start on the day after the secondary claimant's PPL period ends.

The flexible PPL period ends on the day before the child's second birthday.

These definitions are critical because a claim may only sensibly be made for PLP in the flexible PPL period if it specifies a flexible PPL day. A claim that is only for days outside the flexible PPL period would not be a claim for PLP on a flexible PPL day. For this reason, new section 57A(1) makes a claim that does not specify any flexible PPL days an ineffective claim. See item 116 of the Bill.

There are some complexities about how these definitions operate in relation to pre-birth claims.

Where a claim is made before the child is born, the Secretary cannot know the person's PPL period, because this will likely depend on the child's date of birth, and when birth is verified: see section 11(4). However, the Secretary will still be able to make an initial eligibility determination on a claim because the Secretary may assume that the person's nominated start date will be the start of their PPL period (see section 27 of the Act). By doing this, the Secretary can assess whether the claim for flexible PPL is effective, and go on to consider whether an initial eligibility determination under new section 26A should be made. The Secretary can also consider whether an employer determination should be made.

Amendments to the guide to Part 2-2

Items 43-46 amend section 12, which contains the simplified guide to Part 2-2 of the Act.

These amendments ensure that the guide accurately reflects how the new scheme will operate.

Technical amendments to clarify the operation of Part 2-2

Item 47 amends the heading to make it clear that Division 2 of Part 2-2 is in relation to determinations about whether PLP is payable to a person for the PPL period (as distinct from determinations relating to flexible PPL days made under proposed Division 2A).

Items 48-50, 52-55, 57, 59-61, 63, 65-67, 70-71 and 73-74 amend various provisions under Division 2 of Part 2-2 to make it clear that they are in relation to the maximum PPL period for the child. This is to accommodate the addition of new Division 2A of Part 2-2, which relates to determinations about whether PLP for a flexible PPL day is payable to a person.

Payability determinations for the PPL period - a new requirement to make a conditional eligibility determination in certain circumstances

Item 51 repeals and replaces subsection 13(4) of the Act. Under the previous provision, the Secretary was required to determine that PLP was not payable to a primary claimant if the primary claimant was not eligible for PLP under subsection 13(2). That requirement is preserved by new paragraph 13(4)(a), but is confined to PLP in relation to the maximum PPL period for the child, to accommodate the introduction of the flexible PPL period.

In addition, a new provision, paragraph 13(4)(b), is added. This provision operates where the Secretary determines that PLP is not payable to the person, and requires the Secretary nevertheless to consider whether the person satisfies the work test and the income test on the day the determination is made. A determination under this subsection is a conditional eligibility determination.

If a conditional eligibility determination is made, the person will not be required to satisfy the work test or income test if they apply for PLP on a flexible PPL day in relation to the same child.

For example, Audrey is an employee of a company which offers a private parental leave entitlement to its employees. After Audrey gives birth, she takes the 6 month period offered by her company. She then returns to work without claiming PLP under the Act. Three months later, Audrey takes unpaid leave to resume primary care for her child, and decides at that stage to apply for PLP under the Act. The Secretary makes a determination under paragraph 13(4)(a) that, in relation to the maximum PPL period for the child, PLP is not payable to Audrey because she has returned to work. However, the Secretary also makes a conditional eligibility determination under paragraph 13(4)(b). This means that when Audrey makes a subsequent claim for PLP for one or more flexible PPL days, she will not be required to satisfy the work test or income test on those days.

Items 56 and 58 insert equivalent provisions to subsections 14(4) and 14(7). At present, these provisions require the Secretary to determine that PLP is not payable to a primary claimant (in the case of subsection 14(4)) and a secondary claimant (in the case of subsection 14(7)) in certain circumstances.

Consistently with item 17, these items amend subsections 14(4) and (7) to ensure that the Secretary is required to consider whether the claimant satisfies the work test and income test on the day the determination is made. A determination under this subsection is a conditional eligibility determination. If a conditional eligibility determination is made, the person will not be required to satisfy the work test or income test when they apply for PLP on a flexible PPL day in relation to the same child.

Items 62, 68, 72 and 75 make equivalent amendments to subsections 15(2), 15(6), 16(5) and 17(4).

Item 64 is a technical amendment to subparagraph 15(3)(a)(i). It makes clear that the person must satisfy the work test and income test on the day the determination is made.

Item 69 amends paragraph 16(1)(a) to ensure that the section only relates to claims for PLP in relation to the maximum PPL period.

Payability determinations for PLP in the flexible PPL period

Item 76 inserts new Division 2A at the end of Division 2 of Part 2-2. New Division 2A sets out when the Secretary must make a determination about whether PLP for a flexible PPL day is payable to a person. The new Division 2A includes new sections 17A, 17B, 17C and 17D.

When a determination must be made on a primary claim

New section 17A sets out the requirements for determinations on a primary claim for PLP on one or more flexible PPL days.

New subsection 17A(1) sets out when a claim is to be determined under section 17A. The Secretary must make a determination under section 17A if the claim is effective and if it specifies one or more flexible PPL days.

New subsection 17A(2) requires the Secretary to make a payability determination on the claim if satisfied that the primary claimant was or will be eligible for one or more of the claimed days. Subsection 17A(2) will ensure that if the claimant claims some days on which they are eligible for PLP and some days on which they are ineligible, the Secretary will be able to make a payability determination in relation to the days that the person is eligible for PLP.

New subsection 17A(3) requires the Secretary to specify the flexible PPL days that are payable in the determination. If the Secretary is only satisfied that the person is eligible for some of the flexible PPL days specified in the claim, the Secretary will only specify those days.

What happens if a primary claim is wholly or partly rejected?

New subsection 17A(4) sets out what the Secretary must do if he or she rejects the claim for some or all of the claimed days. In this circumstance, the Secretary must determine that PLP is not payable to the primary claimant for those days. Consistently with subsection 17A(2), this will allow the Secretary to determine that PLP is payable to the claimant for some but not all of the days that the person has claimed.

If the Secretary makes a determination under subsection 17A(4) rejecting all of the days claimed, and the person has never previously made an effective claim for PLP in relation to the child, he or she must also go on to determine whether the person is conditionally eligible to claim PLP on other flexible PPL days. This will ensure that when the person next claims PLP on a flexible PPL day they are not required to satisfy the work and income tests (assuming they satisfy those tests at this stage). See new section 31AA(2)(d).

The Secretary will not be required to make a conditional eligibility determination if he or she has determined that the person is eligible on some of the days that are claimed. This is because, in this case, the primary claimant will have previously satisfied the work and income tests in relation to the child.

Section 17A(5) requires the Secretary to specify in the determination the days which are not payable. This is to account for the possibility that a person will claim some flexible PPL days for which they are eligible, and some for which they are not eligible.

Determinations on a secondary claim

New subsection 17B(1) sets out the process for determinations on a secondary claim for PLP on one or more flexible PPL days. The Secretary must make a determination under section 17B if the secondary claim is effective and if it specifies one or more flexible PPL days.

There are two subsections setting out the circumstances under which the Secretary must determine that PLP is payable for the secondary claimant: subsections 17B(2) and 17B(3).

Determinations under subsection 17B(2)

Subsection 17B(2) operates if the Secretary is satisfied of each of the following matters:

•

The matters in paragraphs (a)-(b) require there to be a permission under section 17D which has not been revoked.

•

Paragraph (c) ensures that secondary claimants will not get a payability determination for more days than are specified in a primary claimant's permission. The concept of a permission is defined in section 17D, and the explanation of that section goes into detail as to how permissions will work in practice.

•

The matter in paragraph (d)(i) effectively requires an assessment of whether the primary claimant satisfies the work and income tests in relation to the child. If the primary claimant has not previously satisfied the work and income tests in relation to the child, the Secretary must be satisfied that the primary claimant satisfies the work and income tests on the day of the determination.

•

The matter in paragraph (d)(ii) requires the primary claimant to satisfy the Australian residency test on the day the child was born.

•

The effect of paragraph (d)(iii) is to require the primary claimant not to be subject to a NARWP on the date of birth of the child, or to be exempt from the NARWP on that day under either subsection 31A(7) or (7A) (eg, the person is a refugee).

•

The matter in paragraph (e) requires the secondary claimant to be eligible for PLP on the claimed days.

How many days can a determination under subsection 17B(2) be made for?

A determination under subsection 17B(2) may be made for one or more of the claimed days. This means that if the number of claimed days exceeds the number of days specified in the primary claimant's permission, a payability determination may still be made. However, in this circumstance, a payability determination will only be made up to the limit specified in the permission. The same is true if the number of days claimed exceeds the 30 day cap set out in proposed subsection 31AB(2).

This operation of subsection 17B(2) (which is consistent with sections 17A and 17C) ensures that claimants will not be unduly penalised should they make an administrative error in their claim. Rather, in this circumstance claimants will receive a payability determination for the days they have claimed for which they are eligible, and be rejected in respect of the days they have claimed for which they are ineligible, or for which there is no permission in place.

Determinations under subsection 17B(3)

Subsection 17B(3) is the second section that requires the Secretary to determine that PLP is payable to the secondary claimant for one or more flexible PPL days.

However, subsection 17B(3) only operates where the secondary claimant made the claim in exceptional circumstances-see subparagraph 17B(3)(b)(i). This is a reference to a secondary claim that is effective because it is made by a person who satisfies the circumstances prescribed by the PPL rules: see subparagraph 55(2)(d) of the Act. If a secondary claim is effective because it satisfies that subparagraph, it is not necessary for a primary claimant to have granted a permission for the secondary claimant to claim.

The other requirements are the same as for section 17B(2).

Consistently with subsection 17A(5), subsection 17B(4) requires a determination made under subsections 17B(2) or (3) to specify the flexible PPL days that are payable.

What happens if the Secretary rejects some or all of the claim?

Subsection 17B(5) requires the Secretary to determine that PLP is not payable for one or more flexible PPL days that have been claimed if the claimant does not satisfy subsection 17B(2) or (3) in relation to those days. Consistently with subsections 17A(2) and 17A(4), this will allow the Secretary to determine that PLP is payable to the claimant for some but not all of the days that they have claimed.

If this occurs, subsection 17B(6) requires a determination made under subsection 17B(5) rejecting some or all of a claim to specify the days that are not payable.

If the Secretary makes a determination under subsection 17B(5) rejecting all of the days claimed, and the person has never previously made an effective claim for PLP in relation to the child, the Secretary must also go on to determine whether the person is conditionally eligible to claim PLP on other flexible PPL days. This will ensure that when the person next claims PLP on a flexible PPL day they are not required to satisfy the work and income tests (assuming they satisfy those tests at this stage). See proposed section 31AA(2)(d).

Determinations on tertiary claims

New subsection 17C(1) sets out the process for determinations on a tertiary claim for PLP on one or more flexible PPL days. The Secretary must make a determination under section 17C if the claim is effective and if it specifies one or more flexible PPL days.

Consistently with the existing provisions relating to payability determinations and new sections 17A and 17B, this means that if the claim is not effective, the Secretary is not required to make a determination on it.

New subsection 17C(2) sets out when the Secretary must determine that PLP is payable to the tertiary claimant for one or more flexible PPL days specified in the claim. Consistently with the requirements of section 17 of the Act, paragraph (a) requires there to have been a payability determination in favour of a secondary claimant (whether for PLP in the PPL period or on a flexible PPL day). Paragraph (b) requires the tertiary claimant to be eligible for PLP on the claimed days.

New subsection 17C(3) requires the Secretary to specify the days that are payable.

New subsection 17C(4) requires the Secretary to determine that PLP is not payable to the tertiary claimant on one or more flexible PPL days if the Secretary is not satisfied that the claimant satisfies new subparagraphs 17C(2)(a) and (b) in relation to those days.

Consistently with subsections 17A(5), 17B(4) and 17B(6), subsection 17C(5) requires the Secretary to specify in the determination the claimed days for which PLP is not payable.

No conditional eligibility determinations for tertiary claimants

It is not necessary for the Secretary to make a conditional eligibility determination if he or she rejects a tertiary claim. This is because tertiary claimants will not have to satisfy the work or income tests in order to be eligible. Tertiary claimants' eligibility requirements will be set out in amendments to the Paid Parental Leave Rules.

A new concept - permission for secondary claimants to claim

New section 17D establishes a new concept for the Act: a permission to claim flexible PPL days for a child. This links to new section 17B, which provides for when the Secretary must make a payability determination in favour of a secondary claimant for a flexible PPL day.

This mechanism allows the primary claimant to give a permission in respect of flexible PPL days. In most cases, the Secretary will only be able to grant a payability determination to secondary claimants if they have claimed PLP on a flexible PPL day in respect of which there is a permission which has not been revoked: see new subsection 17B(2).

The primary claimant's permission must specify how many days are allocated for a secondary claimant to claim. The permission will not specify who the secondary claimant is. This is to account for complex and blended family arrangements and the possibility that there could be more than one secondary claimant in relation to the child.

How will permissions work in practice?

For example, Evelyn and Jane are married and have conceived a child with the help of their close friend Tom, who donated sperm. Each of Evelyn, Jane and Tom wishes Tom to maintain a close relationship with the child.

Evelyn (who is the birth mother) makes a claim for PLP in her PPL period and a claim for 10 flexible PPL days immediately following the end of that period. She gives a permission for a secondary claim to be made in respect of 20 flexible PPL days. Both Tom and Jane may make a claim for flexible PPL days in respect of the child (Tom is a secondary claimant because he is a parent of the child; Jane is a secondary claimant because, among other things, she is the partner of the primary claimant Evelyn: see paragraphs 55(2)(a) and (b) of the Act).

New subsection 17D(3) states that the number of flexible PPL days for the child specified in the permission must not exceed 30. This is consistent with the cap of flexible PPL days being 30-see subsection 31AB(2), which is inserted by item 96.

What happens if a primary claimant changes their mind about a permission?

New subsections 17D(4)-(6) deal with how a primary claimant revokes a permission.

If the primary claimant revokes the permission in respect of all flexible PPL days, in ordinary circumstances a secondary claimant will no longer be able to obtain a payability determination (see subsection 17B(2)). The revocation may be in respect of some but not all of the days originally set out in the permission. This means that if the primary claimant revokes the permission in respect of some but not all of the flexible PPL days, the secondary claimant will only be able to obtain a payability determination for the number of flexible PPL days remaining on the permission.

For example, Fatima and Ahmed have a baby. Fatima initially planned to claim 12 weeks' PLP in her PPL period and return to work full time, with Ahmed to take over primary care thereafter. Accordingly, Fatima gave a permission in respect of 30 flexible PPL days.

However, during Fatima's PPL period, she and Ahmed's plans change. Fatima arranges with her employer to return to work three days per week, while Ahmed arranges to continue working two days per week. Fatima will be the primary carer for the two days per week she is not working, while Ahmed will be the primary carer for the remaining three days. Before Ahmed makes a claim for flexible PPL, Fatima revokes the permission in respect of 12 of the flexible PPL days.

What if a payability determination has already been made when the primary claimant requests revocation?

A different rule applies if a payability determination is already in force in favour of a secondary claimant. In this case, the revocation of the permission does not affect the operation of the payability determination.

For example, assume that Fatima and Ahmed wanted to arrange their affairs as soon as their child was born. Immediately after Fatima gave her permission in relation to 30 flexible PPL days, Ahmed claimed PLP on 30 flexible PPL days and the Secretary made a payability determination in respect of those days. The fact that Fatima revokes her permission in respect of 12 flexible PPL days has no effect on the payability determination in favour of Ahmed. However, if Ahmed does not intend to be the primary carer on some of the days he has claimed, he should request the Secretary to revoke the determination in respect of those days under new subsection 25(1). This will free up those days and allow Fatima to make a further claim, and prevent Ahmed owing a debt to the Commonwealth because he was not eligible for some of the days in respect of which a payability determination is in force.

What if the primary claimant has given a permission for more days than may be claimed?

The fact that the primary claimant has given a permission to claim a number of flexible PPL days does not prevent the primary claimant claiming those days, assuming there is no payability determination in force.

In the example above, assume that neither Ahmed nor Fatima have made a claim for any flexible PPL days before their plans change. Rather than revoking her permission in respect of 12 flexible PPL days, Fatima could simply make a claim for 12 flexible PPL days. Once a payability determination is made on Fatima's claim, Ahmed will only be eligible for 18 flexible PPL days because of the effect of new subsection 31AB(2), which imposes the 30 day cap.

However, if a primary claimant gives a permission for some but not all flexible PPL days, and makes a claim for other flexible PPL days, then the primary claimant's claim will not affect the secondary claimant's capacity to claim unless the sum of the days claimed by the primary claimant and the days in respect of which a permission is granted exceeds 30.

For example, Fatima gives a permission in which she specifies 10 flexible PPL days. Fatima claims 10 flexible PPL days herself. Fatima's claim for 10 flexible PPL days does not affect Ahmed's capacity to claim the 10 flexible PPL days on the permission, because the number of payable days will not exceed the 30 day cap.

Claims in respect of children born before 1 July 2020

Item 77 inserts new section 19A. This section ensures that a person will not be able to claim under the new arrangements if their child is born before 1 July 2020. Instead, if this occurs, the person's claim will be treated as a claim for PLP under the old system. The transitional provisions in Schedule 2 to this Bill provide further detail about what will occur in such cases.

Consequential amendments to section 21

Items 78 and 79 amend subsection 21(1) and paragraphs 21(1)(a), (b) and (c) to make it clear that the payability determinations referred to are those under sections 13, 14, 15, 16 and 17. This is to avoid confusion with the introduction of new determinations in relation to flexible PPL days made under proposed Division 2A.

Consequential amendments to notices under section 24

Item 80 repeals and replaces section 24. This provision requires the Secretary to notify the claimant of determinations in respect of their claim.

New section 24 largely duplicates the previous section 24, and provides that if the Secretary makes a payability determination about PLP for the child, the Secretary must give a notice of the determination to the claimant that states:

•

whether PLP is payable; and

•

if PLP is payable for the claimant's PPL period (where relevant); and

•

if PLP is payable for a flexible PPL day for the child (where relevant); and

•

that the claimant may apply for review of the determination in the manner set out in Chapter 5.

This amendment is to reflect the introduction of flexible PPL and to incorporate it into the notice given under section 24.

Requesting to revoke payability determinations

Item 81 repeals and replaces subsection 25(1).

Existing subsection 25(1) deals with requests by claimants to revoke payability determinations for the PPL period. Such requests must be made before the start of the period to take effect. This requirement is preserved under the new subsection 25(1), but only for payability determinations relating to the PPL period.

Importantly, however, new paragraph 25(1)(c)(ii) provides for a different rule for when a person may request to revoke a payability determination in relation to a flexible PPL day. This new rule allows claimants to make a request to revoke a payability determination for a flexible PPL day up until the last day of the instalment period for the instalment that relates to that day.

In cases where the Secretary is paying, the last day of the instalment period is the last possible day on which Centrelink can prevent a payment being made to the person.

How will the new revocation rule work in practice?

For example, Zhong-wei has a payability determination in force in relation to his secondary claim for PLP in the flexible PPL period, and his instalments are paid by the Secretary. Zhong-wei's instalment period ends fortnightly on a Wednesday, with the last instalment period ending on Wednesday 11 November 2020. Zhong-wei's payability determination specifies that he is to take a flexible PPL day on Thursday 12 November 2020, but he unexpectedly did not have primary care of his child on that day. Zhong-wei has until Wednesday 25 November 2020 to request the Secretary to revoke the payability determination in relation to that day. If he fails to do so and the Secretary makes a payment to him then Zhong-wei owes a debt to the Commonwealth in the amount he was paid for the day of 12 November 2020 (since Zhong-wei was not eligible for PLP on that day).

A similar result would occur where PLP is paid by an employer. In this case, if an employer is paying for PLP in a person's continuous flexible period and the person requests the Secretary to revoke the payability determination before the last day of the instalment period for an instalment, then the Secretary must revoke the determination under section 25(1). Further, when this occurs the Secretary must revoke the employer determination under new subsection 108(1A) and must specify the day on which that revocation takes effect.

The Secretary will then give a notice to employers under section 114 notifying employers of what the revocation means for their obligation to pay instalments under sections 72(1) and (1A).

Once the employer determination is revoked and the revocation takes effect, the employer will no longer be required to pay an instalment-this is the effect of new section 72(1A). In this case, the Commonwealth can recover any additional PPL funding amounts from the employer pursuant to section 168 of the Act.

In addition, the Government expects that employers will nevertheless sometimes pay instalments that are no longer payable-for example, because the employers were only notified of the revocation after the instalment was paid to the relevant person. In this situation, the employer does not owe a debt to the Commonwealth; instead, the person owes a debt to the Commonwealth in the amount that they were overpaid-see section 166 as amended by the Bill.

Amendments to initial eligibility determinations

Items 83-86 amend subsections 26(1) and (2) to clarify that determinations under that section only relate to claims for PLP in the maximum PPL period.

Item 87 inserts new section 26A, which establishes the concept of an initial eligibility determination relating to flexible PPL days. Consistently with section 26 of the Act, this concept will allow claimants to make a claim for flexible PPL days before their child is born. An initial eligibility determination is not a payability determination; however, it will give prospective parents a measure of certainty that they will be likely to obtain a payability determination for the claimed flexible PPL days once their child is born.

If an initial eligibility determination is made for a person for a child, that person will not have to satisfy the work or income tests when they make a further claim for PLP in the flexible PPL period.

Amendments to the guide to Part 2-3

Items 88-91 amend section 30, which contains a simplified guide to Part 2-3 of the Act.

These amendments ensure the guide to Part 2-3 accurately reflects the new arrangements.

Amendments to ensure section 31 - which concerns eligibility for PLP in the PPL period - does not apply to PLP in the flexible PPL period

Item 92 amends the heading of section 31 to make it clear that section 31 is in relation to when a person is eligible for PLP on a day other than a flexible PPL day for a child.

Item 93 amends subsection 31(1) to make it clear that section 31 sets out when a person is eligible for PLP for a child on a day that is not a flexible PPL day for a child.

These amendments will differentiate section 31 from new section 31AA, which is relevant to when a person is eligible for PLP on a flexible PPL day for a child.

Item 94 amends subsection 31(2), (3) and (4) to make clear that the reference is to a day other than a flexible PPL day for a child.

Item 95 repeals the previous subsection 31(4B). Subsection 31(4B) is designed to ensure that a secondary claimant cannot claim more than 18 weeks of total leave under the Act in relation to a child. It does this by preventing secondary claimants from combining a claim for all the PLP for a child with a claim for dad and partner pay under Division 3A.

This policy remains, but it is no longer appropriate to include the restriction in the eligibility provisions for PLP in the PPL period. This is because a secondary claimant could claim all the PLP in the PPL period and all of the dad and partner pay entitlement, but not be above the 90 day cap.

For this reason, the restriction in former subsection 31(4B) has been removed and a new section designed to achieve the same policy goal has been inserted in the new eligibility rules for flexible PPL-see new section 31AB(5).

New eligibility rules for a claim for PLP on a flexible PPL day

Item 96 inserts new sections 31AA and 31AB after section 31.

New subsection 31AA(1) sets out the circumstances where a person is eligible for PLP on a flexible PPL day for a child. The circumstances are that the person satisfies both conditions set out in new paragraphs 31AA(1)(a) and (b). These conditions are that:

•

the person satisfies one set of positive criteria under any of new subsections 31AA (2), (3), (4) or (5); and

•

the person is not made ineligible for PLP on the day by new section 31AB.

The first set of positive criteria - subsection 31AA(2)

New subsection 31AA(2) provides the first instance of when a person is eligible for PLP on a flexible PPL day for a child. Each of new paragraphs 31AA(2)(a) to (e) is required to be satisfied, where relevant.

New subparagraphs 31AA(2)(a) and (b) require that, on the flexible PPL day that is claimed:

•

the person satisfy the Australian residency test under Division 5; and

•

the person be the primary carer of the child under Division 6.

New subparagraph 31AA(2)(c) requires that, on the flexible PPL day that is claimed, the person not be at work, or if they be at work, be at work for a permissible purpose.

The reference to work for a permissible purpose ties into an existing concept in Division 7 of Chapter 2 of the Act. For most claimants, the relevant permissible purpose will be a 'keeping in touch day'-that is, a day that allows the person to work for a day to keep in touch with their employer in order to facilitate a return to employment in the future (see section 50 of the Act). Subparagraph 31AA(2)(b)(ii) ensures that, if a person has a continuous PPL period, they will still be able to work on a keeping in touch day on a flexible PPL day that falls within their continuous flexible period for the child.

New paragraph 31AA(2)(d) requires the person to satisfy the work test and the income test if they have not previously satisfied the work and income tests in relation to the child. The term 'has not previously satisfied the work and income tests in relation to the child' is defined in section 6.

This condition ensures that a person will only be tested for the work and income test if there has not previously been a payability determination made in their favour in relation to the child. Further, if the person has previously made a claim for PLP and the claim has been rejected, but for reasons other than failing to satisfy the work test and the income test, that person will not be retested for the work and income test.

A person who has previously satisfied the work and income tests - an example

For example, Mary and Charles had a baby girl. Mary made an effective primary claim for 12 weeks of PLP in her PPL period, and an effective claim for PLP on 10 flexible PPL days. The Secretary made a payability determination for the PPL period and for the 10 flexible PPL days. Separately, Mary gave a permission to a secondary claimant to claim 20 flexible PPL days. Charles made a claim for PLP on a flexible PPL day on the same day Mary had been found payable for, and accordingly, his claim for this day was rejected (see proposed subsection 31AB(3)). Despite this, Charles met the work and income test on the day of his initial determination, and the Secretary made a conditional eligibility determination in his favour-see section 17B(5). When Charles makes his next claim for PLP in relation to the child he will not be required to satisfy the work or income tests.

Specific NARWP provision for primary claimants

New paragraph 31AA(2)(e) applies to primary claimants only. Primary claimants must satisfy the Australian residency test on the date of birth of the child. Further, the date of birth of the child must not be on a day which is in a NARWP to which the person is subject, or must be a day on which the person satisfies one of the exemptions in subsections 31A(7) and (7A)). This provision ensures that primary claimants in a NARWP and not exempt from the NARWP on the date of birth of the child will never be eligible for PLP on a flexible PPL day, even if they are no longer in a NARWP on the day that is claimed.

This is consistent with the operations of the provisions in relation to eligibility for leave in the PPL period. Under section 13(2), a primary claimant must be eligible from the date of birth of the child until the PPL period ends.

This means that a primary claimant cannot claim PLP if they were in a NARWP on the date of birth of the child. This is the case even if, for example, a child is born 103 weeks into the person's NARWP. Notwithstanding that the person's NARWP is nearly at an end, they can never claim PLP in relation to that child.

Section 31AA(2)(e)(ii) ensures that this policy is applied to the flexible PPL period.

This NARWP requirement may also affect some secondary claimants, but in a different way to primary claimants

Secondary claimants, by contrast, are only required to meet residency and NARWP requirements on the day for which they claim PLP-see subsection 31AB. However, a payability determination for flexible PPL generally cannot be made in favour of a secondary claimant where the primary claimant did not satisfy the residency test on the date of birth of the child or was subject to a NARWP without an exemption on that day: see subparagraph 17B(2)(d)(ii)-(iii).

For example, Yasmine is eight months into her two year NARWP when she has a baby with Australian resident Max. Yasmine does not qualify for any exemptions from the NARWP. Two months after the birth, Yasmine makes a primary claim for 12 weeks of PLP in her PPL period, and a claim for PLP on 30 flexible PPL days. As Yasmine was still serving a NARWP at the time of birth, her claim for PLP is rejected. As Yasmine is not entitled to PLP, she is also unable to transfer the 12 weeks of PLP in the PPL period to Max. If Max were to claim a flexible PLP day the Secretary would not make a payability determination in favour of him (see section 17B(2)(d)(iii)), despite Max's being an Australian resident.

Conversely, Pablo is eighteen months into his two year NARWP when he has a baby with Australian resident Rebecca. Rebecca made an effective primary claim for 12 weeks of PLP in her PPL period, and an effective claim for PLP on 10 flexible PPL days. The Secretary made a payability determination for the PPL period and for the 10 flexible PPL days.

Separately, Rebecca gave a permission for a secondary claimant to claim 20 flexible PPL days. Pablo made a claim for PLP for 20 flexible PPL days, to be taken when the baby is 12 months old and when Pablo is no longer serving a NARWP. The Secretary makes a payability determination for the 20 flexible PPL days, despite the fact that, at the time of claim and the child's date of birth, Pablo was serving a NARWP.

The second set of positive criteria - subsection 31AA(3)

New subsection 31AA(3) provides the second instance of when a person is eligible for PLP on a flexible PPL day for a child. It ensures that parents of children who are stillborn or die in infancy will still have access to flexible PPL. The effect of paragraph 31AA(3)(b) is that parents of such children are not required to be the primary carer of the child for the day that they claim and may access the payment on days they are working. Subparagraph (c) requires that the person would have been the child's primary carer for the day if the child had lived. New subsection 31AA(3) is consistent with existing subsection 31(3) of the Act.

The third set of positive criteria - subsection 31AA(4)

New subsection 31AA(4) provides the third instance of when a person is eligible for PLP on a flexible PPL day for a child, and only applies to primary claimants. New subsection 31AA(4) requires that the primary claimant satisfy, on the flexible PPL day that is claimed:

•

the work test under Division 3; and

•

the income test under Division 4; and

•

the Australian residency test under Division 5; and

•

the conditions prescribed by the PPL rules.

However, consistently with paragraph 31AA(2)(d), a person will not be required to satisfy the work and income tests if they have previously done so in relation to the child.

The fourth set of positive criteria - subsection 31AA(5)

New subsection 31AA(5) provides the fourth instance of when a person is eligible for PLP on a flexible PPL day for a child, and applies to secondary or tertiary claimants. It requires that such claimants satisfy the conditions prescribed by the PPL rules.

Factors that render a person ineligible

New section 31AB provides for when a person is not eligible for PLP on a flexible PPL day for a child. A person will not be eligible if they are disqualified by one of the paragraphs in section 31AB, even if they meet a set of positive criteria provided for in subsections 31AA(2), (3), (4) or (5).

That the number of flexible PPL days claimed would exceed 30

New subsection 31AB(2) provides for the first disqualifying factor. It ensures that if a payability determination is in force for 30 flexible PPL days for the child, a person cannot be eligible for any more flexible PPL days in relation to that child. This subsection ensures that the number of flexible PPL days in relation to a child cannot exceed 30.

That there is a payability determination already in force for the day

New subsection 31AB(3) provides for the second disqualifying factor. It states that the relevant claimant is not eligible for PLP on a flexible PPL day for the child if there is in force a payability determination under section 17A, 17B or 17C that PLP is payable to a person for the child in relation to the same day. This ensures that two people cannot be paid PLP on the same flexible PPL day for the same child.

That there is an overlap with the person's DAPP period

New subsection 31AB(4) provides for the third disqualifying factor. It states that the relevant claimant is not eligible for PLP on a flexible PPL day for the child if:

•

there is in force a payability determination that PLP is payable to the relevant claimant for the relevant claimant's DAPP period; and

•

the day is a day that is in the person's DAPP period.

This section ensures that a person cannot claim dad and partner pay on the same day as they claim PLP on a flexible PPL day, so long as the two claims relate to the same child. However, a person could claim dad and partner pay for one child and another flexible PPL day for a different child. Additionally, this section would not prevent a primary claimant from claiming PLP on the same day as their partner claimed dad and partner pay in relation to the same child.

That the claim would mean that the total number of days on which the person had claimed PLP would exceed 90 for the child

New subsection 31AB(5) provides for the fourth disqualifying factor.

This paragraph is to deal with the circumstance where a secondary claimant is paid PLP for some of the PPL period and claims dad and partner pay. In that circumstance, the secondary claimant should still be able to claim some flexible PPL days, but not so that the total number of days claimed (including dad and partner pay days) exceeds 90.

That the claimant is deceased

New subsection 31AB(6) provides for the fifth disqualifying factor. This paragraph ensures that the estate of a deceased claimant cannot be eligible for PLP.

That the day that is claimed is in a NARWP to which the claimant is subject

New subsection 31AB(7) provides for the sixth disqualifying factor. This paragraph ensures that persons cannot claim PLP on a flexible PPL day that falls within a NARWP to which they are subject. This disqualifying factor is disapplied for some claimants-see item 103, which amends subsections 31A(7) and (7A).

Consequential amendments to section 31A

Items 97-101 make consequential amendments to subsection 31A(5).

Items 97 and 99-101 amend paragraphs 31A(1)(a), (2)(b), (3)(b) and (5)(c) to remove references to the Social Security Act 1991 and the Farm Household Support Act 2014. These references are unnecessary because of amendments made to the definitions section.

Item 98 ensures that the reference to the person's PPL period in paragraph 31A(5)(a) is tied to a particular child.

Amendments to the NARWP provisions

The NARWP provisions-chiefly, sections 31(6) and 31A-were initially introduced into the Act by Schedule 4 to the Social Security and Other Legislation Amendment (Promoting Sustainable Welfare) Act 2018.

In relation to a primary claimant, these provisions ensure that claimants are not eligible for PLP on a day that is in a NARWP, subject to exemptions applying. Further, a payability determination cannot be made for primary claimants unless they are eligible on every day from the child's date of birth until the end of the PPL period. This means that, as a matter of substance, primary claimants who are in a NARWP on the day they give birth can never be eligible for PLP in relation to that child, subject to this eligibility requirement being switched off-see sections 31A(7) and (7A).

The question of whether a person is in a NARWP on a day is primarily answered by subsections 31A(1)-(4). This works in the following way:

•

If the conditions in subsection 31A(1) are satisfied, then the person will be subject to a NARWP.

•

If a person is subject to a NARWP, then the length of the person's waiting period will be determined according to subsection 31A(2), (3) or (4).

However, even if a person is subject to a NARWP because they satisfy subsection 31A(1), they can be taken out of a NARWP if one of subsections 31A(5) or (6) applies to them. In short, subsection 31A(5) removes a person from a NARWP for the PPL period if they are receiving certain income support payments under the social security law on the day before their PPL period starts. For primary claimants to have this exception, they have to be receiving an income support payment from the day that the child is born until the day before their PPL period starts.

New subsections 31A(6A) and 31A(6B)

Item 102 inserts new subsections 31A(6A) and 31A(6B) after subsection 31A(6) to include additional exemptions to a person's being subject to a NARWP.

The purpose of inserting subsections 31A(6A) and (6B) is to replicate the exemption in subsection 31A(5) to people being subject to a NARWP, but for leave claimed in the flexible PPL period.

New subsection 31A(6A) provides that a person is not in a NARWP on a flexible PPL day if the person is receiving any of the following on the day before that day:

•

a social security pension (within the meaning of the Social Security Act 1991);

•

a social security benefit (within the meaning of the Social Security Act 1991);

•

farm household allowance under the Farm Household Support Act 2014;

•

PLP for the child, or

•

dad and partner pay for the child.

The effect of subsection 31A(6A) is to prevent a person from being subject to a NARWP if they were receiving one of those payments on the day before a flexible PPL day.

In addition, for primary claimants to take advantage of this exemption, they need to be receiving one of those payments on the day the child is born.

New subsection 31A(6B) applies in relation to a person who has taken a block of flexible PPL days on weekdays starting on the first day after the person's PPL period ends. If the person was receiving a social security pension, social security benefit or Farm Household Allowance on the day before the person's PPL period began, then they will not be subject to a NARWP for that block of days.

Again, primary claimants can only take advantage of this exception if they were also receiving one of those payments on the day the child was born.

Importantly the block of days referred to in subsection 31A(6B) may be different to a person's continuous flexible period in relation to the child. This is because the period that a person is exempt from a NARWP because of subsection 31A(6B) can extend beyond the child's first birthday.

Amendments to subsections 31A(7) and (7A)

Items 103 and 105 amend subsections 31A(7) and (7A) to include a reference to new subsection 31AB(7).

At present, subsections 31A(7) and (7A) provide a different way to exempt people from the requirements of the NARWP. Unlike subsections 31A(5) and (6), and new subsections 31A(6A) and (6B), these provisions do not remove people from being subject to a NARWP. Rather, if subsection 31A(7) or (7A) applies, a person may still be "subject to a" NARWP and be in a waiting period. But for those claimants to whom either subsection 31A(7) or (7A) applies, the fact that they are in a NARWP does not affect their eligibility on any day on which the exemption applies.

This is because subsections 31A(7) and (7A) switch off the requirement in subsection 31(6) that a claimant for PLP in the PPL period not be subject to a NARWP in certain circumstances (for example, where a person is a refugee).

This amendment extends that policy to claims for PLP in the flexible PPL period. It ensures that persons in a NARWP who are covered by subsection 31A(7) or (7A) will also be able to claim PLP on a flexible PPL day, assuming they meet the other criteria and are not otherwise ineligible.

Items 104 and 106 remove obsolete references to the Social Security Act 1991 and replace them with references to how that Act is defined in the definitions section.

Consequential amendments to eligibility concepts

It is also necessary to make consequential amendments to some of the concepts set out in Divisions 3 to 7 of Part 2-3. These Divisions create concepts which are used to test eligibility under section 31, and will also be used to test eligibility to claim PLP in the flexible PPL period under new section 31AA.

Items 107 and 109 amend subsection 33(3) (which deals with the work test) and subparagraph 39(b)(ii) (which deals with the income test) to make it clear that the test date for secondary claimants is the day the person first becomes the child's primary carer. This is necessary because under the scheme for flexible PPL, the person could be a primary carer on one day, return to work for a week and not be the primary carer, and then resume primary care on another flexible PPL day.

These amendments ensure that the work and income test are only calculated by reference to the first day on which the claimant became the child's primary carer.

Item 108 inserts a new subparagraph into subsection 34(1). Section 34 sets out what constitutes qualifying work for the purposes of the work test. The new subparagraph ensures that a person will be taken to be performing qualifying work on a day if they claim that day as a flexible PPL day.

Changes to the reference period for primary care

Item 110 amends subsection 47(2) to make clear that a person's reference period for the purposes of determining whether they are the primary carer of a child can be one or more days.

For the purposes of this section, the Secretary could determine a reference period that spans a claimant's PPL period. This provision makes clear that for a claim for PLP on a flexible PPL day, the reference period can last for just one day. This is consistent with the eligibility rules, which generally provide that for PLP in the flexible PPL period, the Secretary is to test primary care on the particular flexible PPL day that is claimed-see subsections 31AA(2)(b) and (3)(c).

However, this change will not prevent the Secretary from determining a reference period that lasts for a number of flexible PPL days where this is appropriate. For example, this might occur if the person had a continuous PPL period. In that case, the Secretary could determine that the person's reference period for the purpose of determining whether a claimant had primary care was the whole of the continuous flexible period. In that case, the question of whether the person had primary care for the child on a particular day would be answered by looking at the reference period, not the day in isolation.

This flexible approach to the definition of a reference period is necessary because of the way modern parenting works. For example, Eliza claims a 12 week PPL period plus a 6 week continuous flexible period. On a day during that continuous flexible period, Eliza's mum is sick, so Eliza arranges to leave her child with her husband for that day so that she can care for her mum. Because the Secretary defined Eliza's reference period to span a number of flexible PPL days, the fact Eliza does not meet the child's physical needs on one particular day during her continuous flexible period does not disqualify her from being eligible on that day.

What a claim must contain

Division 2 of Part 2-4 sets out what the claim must contain. Changes need to be made to these sections to enable claimants to make a claim for PLP in the flexible PPL period.

Item 111 amends the guide to Division 2 of Part 2-4 to ensure it is consistent with the new arrangements.

Item 112 repeals paragraph 55(1)(b) and substitutes new paragraphs 55(1)(b) and (ba).

Section 55 provides for when a claim for PLP is effective.

Existing section 55(1)(b) requires claims to comply with section 57. This provision requires claimants to nominate a start date. The amendments in this item retain that requirement but limit it to where a claim is in relation to the maximum PPL period.

Further, new section 55(1)(ba) provides that a claim for PLP for a flexible PPL day must comply with new section 57A, which applies specifically to claims for PLP in the flexible PPL period.

Items 113, 114 and 115 amend section 57 (which deals with when a claim for PLP in the PPL period is effective) to make it clear that its requirements apply in relation to the maximum PPL period for a child, not the flexible PPL period.

What a claim for PLP on a flexible PPL day must contain

Item 116 inserts new section 57A after section 57. New section 57A sets out the requirements for a claim for PLP for flexible PPL days for a child to be effective.

New subsection 57A(1) provides that a claim for PLP for one or more flexible PPL days for a child must specify each of those days.

However, subsection 57A(1) does not render ineffective a claim that specifies flexible PPL days and days that are not flexible PPL days. Rather, in this situation, the claim will be treated as a claim for PLP on the flexible PPL days that are specified. This is because the underlying premise of the provisions enabling claims and payability determinations to be made for PLP in the flexible PPL period is that the claim will be on a flexible PPL day. In other words, the part of the claim that does not specify flexible PPL days cannot be treated as a claim for PLP in the flexible PPL period, and will be disregarded.

New subsection 57A(2) provides that a flexible PPL day specified in the claim must not be a day that is more than 42 days before the day the claim is made. This requirement will ensure that claims are made in a timely manner.

For example, assume a child is born on 1 January 2021. The child's mother claims and is paid PLP for the 12 weeks of her PPL period, but does not make a claim for flexible PPL within the child's first year. From Monday 23 October 2023 to 1 December 2023, she takes a break from work, intending to claim these days as flexible PPL days. On Monday 18 December 2023 (ie, 56 days after her first day off work in this period) she makes a claim for flexible PPL in relation to all of the days in that period. Her claim for PLP is not effective for days that are more than 42 days before the day the claim is made. However, the aspects of her claim that relate to days that are 42 days or fewer before the date of her claim will be processed.

New subsection 57A(3) provides that before a payability determination is made on the claim, the claimant may change a flexible PPL day specified in the claim by notifying the Secretary of the new flexible PPL day.

This is an important provision for the workability of the scheme. If a person claims PLP before their child is born, there is necessarily uncertainty about the date their PPL period will begin. Because of this there is also uncertainty about when their flexible PPL period begins. For example, if their child is born late and the person selected particular dates as flexible PPL days (rather than selecting whatever days come after their PPL period) then some of the flexible PPL days they have selected might be subsumed into the PPL period. If their child is born early, then the flexible PPL days they have selected could be separated from their PPL period, even though the person wanted a continuous flexible period.

To address this issue, people will be able to amend their claim at any time before a payability determination is made.

However, the Government does not expect all claimants to alter their claims themselves. It is for this reason that section 57A(4) will be inserted.

New subsection 57A(4) will empower the Secretary to shift the person's claim for PLP on flexible PPL days in certain limited circumstances. If those circumstances exist, the Secretary will be able to treat the claim as having specified certain other flexible PPL days.

One circumstance will be that the person has made a claim before the child is born, and has selected specific dates in a continuous flexible period-that is, a period of consecutive days immediately following the end of their expected PPL period. In that circumstance, if the person's PPL period ends on a different date to that which was expected, the Secretary will be empowered to shift the person's claim for those particular flexible PPL days so that the person still claims the same number of consecutive flexible PPL days that are week days immediately following their PPL period.

Another circumstance will be that a person has made a claim before the child is born, but does not verify their child's birth within 28 days of the birth. In that circumstance, the date the person's PPL period starts will be the day the person verifies the birth, which may cause any claim for flexible PPL days that specifies specific dates to be subsumed into the PPL period. In this circumstance, too, the Secretary will be empowered to 'shift' the dates that are claimed, but only where the dates that are claimed form part of a continuous flexible period.

Of course, if a claimant is unhappy with the new days that the Secretary has specified, they may request to revoke the payability determination once it is made under section 25. In general, however, this power is designed to ensure that claimants are not administratively inconvenienced merely because their child is born earlier or later than expected, or because they verified the birth of their child later than 28 days after birth.

Further, in many cases it will not be necessary for the Secretary to exercise the power, because claimants will specify flexible PPL days that they wish to claim not by reference to particular dates, but by reference to particular week days that occur after the PPL period ends. In this case, the actual date that is claimed will only become known after the person's PPL period becomes known. As such, in these cases it would not be necessary to use the power conferred by section 57A(4).

Item 117 amends subsection 59(1) to include a reference to new subsection 59(5). This amendment is consequential to the amendments in item 42C.

Item 118 inserts new subsection 59(5) to create a fourth kind of tax file number statement .

Subsection 59(5) ensures that a person may comply with subsection 59(1) simply by stating that they have previously provided their tax file number with an earlier claim for PLP.

A person can make this kind of statement if they have previously applied for PLP in relation to another child.

Amendments to when a claim must be made

Generally speaking, a claim for PLP on a flexible PPL day can be made up to two years after the child is born. The amendments discussed below give effect to that policy.

Item 119 is a consequential amendment to item 44. It turns existing section 60 into paragraph 60(1). Existing section 60 provides that a claim for PLP must be made in the period between 97 days before the child's expected date of birth and the child's first birthday.

Item 120 amends section 60 (now section 60(1)) to make clear that the rule only applies in relation to the maximum PPL period for a child, not the flexible PPL period. This ensures that the existing rule in section 60 will be maintained in relation to the person's PPL period while allowing a new rule for the flexible PPL period to be prescribed by new subsection 60(2).

Item 121 inserts new subsection 60(2).

New subsection 60(2).provides that a claim for PLP for a flexible PPL day for a child must be made in the period given by new paragraph 60(2)(a) and (b).

This period starts on the day that is 97 days before the expected date of birth of the child: see new subsection 60(2)(a).

The end of the period depends on whether the primary claimant makes an effective claim for PLP (either for a PPL period or for a flexible PPL day) before the child's first birthday.

If an effective claim for PLP is made before the child's first birthday, then the period spans for two years and extends to the child's second birthday. If an effective claim for PLP is not made before the child's first birthday, then the period ends on the child's first birthday.

The effect of these amendments is to require at least one claim for PLP to be made before the child's first birthday. Failure to make any claim before the child turns one will mean that no one is able to claim PLP for the child in the child's second year.

Amendments to the guide to Part 3-1

Item 122 amends the guide to Part 3-1 to ensure that it is consistent with the new arrangements.

Amendments to how PLP is paid

Item 123 repeals and replaces subsection 63(3). New subsection 63(3) is in relation to when an instalment of PLP is payable and provides that an instalment is payable to a person if either or both of new paragraph 63(3)(a) or (b) apply.

New paragraph 63(3)(a) duplicates the effect of the previous subsection 63(3) and provides that an instalment is payable to a person if one or more days of an instalment period for the person fall within the person's PPL period.

New paragraph 63(3)(b) accommodates the introduction of flexible PPL by enabling instalments to be payable for flexible PPL days.

Item 124 repeals and replaces subsection 65(1). This amendment changes how the amount of an instalment is calculated under section 65. Subsection 65(1) provides that the amount of an instalment is the sum of the amounts given by new paragraphs 65(1)(a) and (b).

New paragraph 65(1)(a) largely duplicates the previous subsection 65(1), and now provides that the calculation of the amount of an instalment is to contain the sum of the daily national minimum wage amounts for each week day, during the instalment period to which the instalment relates, that is also a PPL day.

New paragraph 65(1)(b) is added to accommodate the introduction of flexible PPL and to ensure that flexible PPL days in respect of which a payability determination is in force are included in the calculation of the amount of an instalment under section 65. It provides that the calculation of the amount of an instalment is to contain the sum of the daily national minimum wage amounts for each day, during the instalment period to which the instalment relates, that is also a flexible PPL day.

Amendments to enable deductions from instalments in certain circumstances

Item 125 amends subsection 66(2) to refer to new section 69B. In conjunction with other new provisions, section 69B will enable the Secretary to deduct amounts from future instalments to pay down debts arising under the Act.

Section 66(1) provides that an instalment is "absolutely inalienable". However, this has effect subject to certain sections that enable the Commonwealth to recover debts under the Act. And so, it is necessary to add a reference to section 69B to this list.

Item 126 inserts new section 69B. In conjunction with other provisions (notably, new section 190A), this provision will enable the Secretary to deduct amounts from future instalments to pay down debts arising under the Act.

Rationale is to ensure the scheme is administered flexibly

It is necessary to add this provision to provide for flexible PPL. Under the current system, if a person's entitlement to PLP in the PPL period ceases, they cannot obtain more PLP in relation to the child (subject to a review being successful). As such, the Secretary would never have an occasion to deduct debts arising under the Act from future instalments of PLP in relation to the same child.

By contrast, under the new scheme it will be relatively common for people to claim PLP on a flexible PPL day, have a payability determination made, but not be eligible on that day (eg, because the person did not have primary care on the claimed day). In that situation, the person's payability determination for that day will be revoked and they will owe a debt to the Commonwealth in that amount.

In that situation, the Secretary would give the person a notice under section 173, notifying the person of the existence of the debt. The person could consider whether to contest that debt after receiving that notice. Section 69A allows the Secretary to deduct amounts to recover that debt from future payments of instalments of PLP.

Item 127 inserts a reference to section 69B in section 70.

Amendments to the guide to Part 3-2

Item 128 amends the guide to Part 3-2 to ensure it is consistent with the new arrangements.

Changes to when an employer must pay instalments

Item 129 inserts new subsection 72(1A).

Subsection 72(1) imposes an obligation on employers to pay instalments of PLP if an employer determination is in force.

New section 72(1A) will limit when that obligation applies. In effect, the employer will only pay for instalments that are in the PPL period or the continuous flexible period.

Where a person has claimed post birth, the employer will generally pay for the PPL period and continuous flexible period (where applicable) specified in the notice sent to them under section 102 of the Act.

If the person has claimed before the child's birth, the employer will pay for the PPL period and continuous flexible period (where applicable) specified in the notice sent to them under section 113 of the Act.

If a person's continuous flexible period or PPL period is lengthened after a payability determination is varied, revoked or set aside, and the change takes effect before the end of the period during which the employer is required to pay instalments, then the employer will be required to pay the longer period specified in a notice sent to them under section 114 of the Act. If the change takes effect after the original PPL period or continuous flexible period (as relevant) has ended, then the Secretary will have to pay for the additional days, even if they would otherwise fall within a continuous flexible period or PPL period for the person.

This result, which is designed to minimise disruption to employers, is secured by consequential amendments to sections 92, 87 and 114, and the addition of new section 92A.

Items 130 and 131 amends paragraphs 72(2)(a) and (b) to ensure that references in to the PPL period are tied to a particular child.

Consequential amendments to sections governing PPL funding amounts

Item 132 inserts a note under subsection 75(1), which deals with when the Secretary is required to pay PPL funding amounts. As one of the conditions for this obligation is that 'an employer is likely to be required to pay the instalment to the person', the note refers the reader to subsections 72(1) and 72(1A), which define the scope of that obligation.

This note ensures PPL funding amount will only be paid where the relevant employer has an obligation to pay an instalment.

Items 133-136 amend section 76, which provides for rules which affect the amount of PPL funding amount to be paid to employers in advance of their paying instalments.

The amendments made by Items 134-136 ensure that the amounts paid to employers as PPL funding amount do not exceed the amounts those employers are required to pay as instalments under subsection 72(1), when read with new subsection 72(1A).

In addition, Item 133 amends subparagraph 76(1)(b)(ii) to clarify that amounts are to be paid to the employer of the person who is entitled to PLP.

Item 137 amends paragraph 77(2)(c). Existing section 77 sets out what the Secretary must put in a notice to employers each time the Secretary pays employers PPL funding amounts. Paragraph 77(2)(c) requires the Secretary to state the PPL days for which PPL funding amount has been paid. Under the new scheme, PPL funding amount may also be paid in relation to flexible PPL days. In that case, the amount might not have any relationship to a PPL day.

Accordingly, this amendment recognises that a notice does not have to include the number of PPL days to which PPL funding amount relates if no such days exist.

Item 138 inserts new paragraph 77(2)(da) and (db).

New paragraph 77(2)(da) requires the Secretary's notice to employers to include the flexible PPL days for the person's child that the PPL funding amount has been paid for.

New paragraph 77(2)(db) requires the notice to contain the daily national minimum wage for each of the flexible PPL days.

What certain employers must tell the Secretary

Item 139 amends section 82(1). Section 82 requires employers to notify the Secretary of certain things about claimants in respect of whom they are paying instalments of PLP.

This technical amendment ensures that the obligation to notify only applies where there is an employer determination in relation to the person's employer and in relation to a child of the person.

New matters for employers to notify the Secretary

Item 140 repeals and replaces subparagraphs 82(1)(f) and (g). Each paragraph under subsection (1) sets out a specific matter that the employer must notify the Secretary of.

These amendments ensure that the employer must notify the Secretary if the employer returns to work before the end of the person's PPL period or, if applicable, the continuous flexible period. This notification obligation ensures that the Secretary is notified if a person comes back to work before they said they would. If this occurs, the person would no longer be eligible for PLP on that day, because they would be performing more than one hour of work which is not for a permissible purpose.

Item 141 amends paragraph 82(1)(k) so that it applies in relation to both PPL days and flexible PPL days. Paragraph 82(1)(k) requires employers to notify the Secretary if the PPL funding amount paid for a period is more than what the employer is required to pay their employee as PLP during that period.

Item 142 amends paragraph 82(1)(l) so that it applies in relation to both PPL days and flexible PPL days. Paragraph 82(1)(l) requires the employer to notify the Secretary if the total PPL funding amount paid to them exceeds the total they are required to pay the person.

When employers cease being obliged to notify the Secretary

Subsection 82(3) provides for when the employer is no longer required to notify the Secretary of any of the matters in subsection 82(1). Consequential amendments are required to ensure that this provision works appropriately with the introduction of flexible PPL.

Item 143 removes paragraph 82(3)(a).

At present, subsection 82(3)(a) provides that the employer will no longer be required to notify the Secretary on the day a decision is made that has the effect that PLP is not payable to the person. It is not appropriate to retain this provision in light of the introduction of flexible PPL.

For example, Usma has a payability determination for 12 weeks in the PPL period and 6 weeks in a continuous flexible period. However, 4 weeks into Usma's PPL period, she decides that she wants to go back to work 14 weeks after her PPL period began, not 18 weeks after as originally planned. She accordingly requests the Secretary to revoke her payability determination for the last 4 weeks of her continuous flexible period.

The Secretary does so on a day that is 5 weeks into Usma's PPL period. If subsection 82(3)(a) were retained, this would mean that the employer was no longer required to notify the Secretary of any of the matters under subsection 82(1) from the date the Secretary made his or her decision. But this is not the policy intention. Employers should continue to notify the Secretary of those matters until Usma returns to work for the first time.

This result is secured by subsection 82(3)(b)(ii) as amended by item 44DI. In Usma's case, above, the Secretary would be required to revoke Usma's employer determination under new section 108(1B) (because a decision would be made that PLP is not payable for a flexible PPL day that fell within Usma's continuous flexible period). That decision would come into force on a day specified by the Secretary-in practice, this is likely to be the new day on which Usma is due to come back to work. As such, subsection 82(3)(b)(ii) will operate so that the employer remains under an obligation to notify the Secretary of the matters in subsection 82(1) until Usma first returns to work.

Item 144 repeals and replaces new subsection 82(3)(b)(i). This does not make a substantive change to subsection 82(3)(b)(i), which essentially provides that the notification obligation will end when the employer stops paying for instalments of PLP.

Item 145 amends subsection 82(3)(b)(ii). As discussed above, subsection 82(3)(b)(ii) deals with the situation where the person's employer determination is revoked. Because of the changes to the revocation provisions (see new subsection 108(1A)-(1D)) to allow the Secretary to specify a day on which the revocation comes into force, it is necessary to specify that the time the employer's obligation to notify ceases is the day the revocation comes into force, not necessarily the day that the revocation is made.

Amendments to the guide to Part 3-3

Item 146 amends the guide to Part 3-3 to ensure that it is consistent with the new arrangements.

Amendments to when the Secretary is required to pay instalments

Item 147 inserts new subsection 84(2A). This is a consequential provision to subsection 72(1A). It ensures that the Secretary pays for flexible PPL days which are not covered by an employer determination and which do not fall within the person's continuous flexible period, where relevant.

The amendments in Item 148 and 149 ensure that references to the PPL period in subsections 84(3) and (5) are tied to a particular child.

Item 151 amends paragraph 84(5)(b). Section 84 sets out a number of circumstances in which the Secretary is required to pay instalments of PLP. One of those circumstances is where the Secretary has referred a matter to the Fair Work Ombudsman in relation to failures by the employer to pay instalments of PLP.

This amendment is a technical amendment to clarify that the instalment must be "in relation to a child of the person". It does not alter the substantive operation of the section.

Item 152 ensures that the reference to the person's PPL period in subsection 85(2) is tied to a particular child.

Changes to ensure the Secretary pays for PLP after the employer role ends

Section 87 currently works together with Section 92, and requires the Secretary to pay instalments that are taken to have become payable under that section. Section 92 applies where a person has a PPL period that would be paid for by the employer, and after that PPL period ends it is extended because of, for example, a review. If section 97 did not exist, the additional amounts referable to the longer instalment period would have to be paid for by the employer. But this is not a desirable result from a policy perspective, because it would require employers to pay for amounts in a hodgepodge fashion.

As such, section 97 deems that payment in relation to additional amounts would be made by the Secretary rather than the employer.

In turn, section 87 is the substantive obligation that requires the Secretary to pay for those instalments.

Consequential amendments are required to these sections to ensure they work with the new scheme.

Item 153 amends the heading to section 87 to reflect the amendments made by item 154.

Item 154 amends subsection 87(1).

The amendments to section 87 are to accommodate the introduction of an equivalent section where a person's continuous flexible period is extended after it has ended. In that situation, new section 92A will deem instalments in relation to the extended period to be payable by the Secretary.

Item 155 amends the guide to Part 3-4 to ensure it is consistent with the new arrangements.

Items 156-159 amend various references to a person's PPL period in sections 91 and 92 to ensure that they are tied to a particular child.

Item 160 inserts new section 92A. As explained above, this provision ensures that employers will not have to pay for instalments relating to an extension of the continuous flexible period, so long as that extension takes place after the original continuous flexible period has ended. In this case, instalments relating to the extended period will be deemed to be payable by the Secretary.

Changes to section 99 - tie in with the Fair Work Act 2009

Item 161 amends the heading to section 99. Section 99 is necessary to coordinate with the minimum employment standards in the Fair Work Act 2009, which guarantee a particular entitlement of unpaid parental leave. This amendment ensures that the section applies to leave in the PPL period and leave in the flexible PPL period.

Amendments to the guide to Part 3-5

Item 162 amends the guide to Part 3-5 to ensure it is consistent with the new arrangements.

New preconditions to making an employer determination

Item 163 amends subparagraph 101(1)(a). Section 101 obliges the Secretary to make an employer determination if certain preconditions are met. The amendments in this item ensure that a precondition to there being an employer determination is that there be a payability determination, or initial eligibility determination, in relation to the person's PPL period.

The existence of a payability determination, or initial eligibility determination, in relation to PLP on a flexible PPL day is not a necessary condition for an employer determination to be made. This is because employers will only have to pay instalments if a person has a PPL period.

Item 164 amends paragraph 101(1)(b). This precondition to an employer determination currently requires 40 consecutive PPL days to be payable (or to be likely to be payable) before an employer determination can be made. This amendment removes the reference to "PPL days". This change ensures that the Secretary is able to add together days in the PPL period and days in what will become the person's continuous flexible period. If the sum of payable days in those periods equals 40 days or more, then this precondition to an employer determination being made will be satisfied.

For example, a payability determination is in force for Evangeline's PPL period, which is 35 days. Evangeline also has a payability determination in force for 10 flexible PPL days on consecutive weekdays commencing on the first week day after the end of her PPL period. Assuming the other preconditions in subsection 101(1) are met, the Secretary must make an employer determination under subsection 101(1).

Item 165 repeals and replaces subparagraph 101(1)(d). At present, this paragraph ensures that an employer determination will only be made if the person is likely to be an Australian-based employee of the person during the PPL period, or, otherwise, during the period of days for which instalments will be payable by the employer.

These amendments are necessary to maintain that policy in light of the creation of the flexible PPL period. They will ensure that an employer determination will only be made if the person is likely to be an Australian-based employee of the employer during the period of days for which instalments are likely to be payable by the employer.

Section 101(d) will apply where a person has a continuous PPL period because there are one or more payability determinations under section 17A, 17B or 17C that are on consecutive week days commencing on the first week day after their PPL period ends.

Section 101(da) will apply where a person has a continuous PPL period because there are one or more initial eligibility determinations in relation to flexible PPL days that are on consecutive week days commencing on the first week day after their PPL period will end.

Item 166 inserts a note at the end of subsection 101(1). Consistently with the explanation of the changes in item 44F, the note explains that the requirement that there be 40 consecutive days in a payability determination may be satisfied by a combination of days in the PPL period and flexible PPL days.

When the Secretary can decide not to make an employer determination

Item 167 clarifies the operation of subsection 101(4). Subsection (4) relates to when the Secretary may decide not to make an employer determination. The amendment ensures that this decision is in relation to an employer determination that is in relation to a child of the person.

Item 168 repeals and replaces paragraph 101(4)(a). One of the reasons the Secretary may decide not to make an employer determination is if the person's PPL period has ended. The amendments in this section ensure that the Secretary may only decide not to make an employer determination in reliance on subsection 101(4)(a) if the time he or she is considering the matter is after the last day in relation to which the employer would be required to pay instalments to the person in relation to the child.

Employer notices under section 102

Item 169 amends subsection 102(1). Under section 102, the Secretary is required to notify an employer if he or she makes an employer determination. This amendment does not alter the substance of that obligation but ensures that the obligation relates to an employer determination in relation to the person's employer in relation to a child of the person.

Item 170 amends paragraph 102(3)(b). When the Secretary is required to notify the employer of an employer determination under subsection 102(1), he or she is required to specify certain things in that notice.

These amendments require the Secretary to notify the employer that he or she has made a payability determination in relation to the person's PPL period.

Item 171 amends paragraph 102(3)(c) to ensure that references to the person's PPL period are in relation to a specific child.

Item 172 repeals 102(3)(d) and inserts two new paragraphs to change what the notice must contain. This amendment requires the notice to contain a statement of the PPL period as well as a statement of the continuous flexible period. The second requirement only applies if the person has a continuous PPL period-that is, if they are taking a block of flexible PPL days straight after their PPL period ends.

Acceptance notices under section 104

The amendments in Items 173 and 174 ensure that the acceptance notice must contain information that is relevant to the particular child to which the acceptance notice relates.

These amendments also ensure the cross-reference to subparagraph 102(3)(d) in subparagraph 104(3)(b)(ii) is accurate in light of other changes.

Employer becomes obliged to pay instalments otherwise than through acceptance notice - consequential changes

Item 175 amends subparagraph 105(1)(c). Section 105 applies if the employer contests the employer determination in judicial review proceedings, and that review is unsuccessful or is withdrawn. In that circumstance, the Secretary must give a notice requiring the employer to give certain information and the employer must give the Secretary that information.

At present, these obligations only apply if the person's PPL period has not ended-that is, they apply if the employer would still have an obligation to pay instalments of PLP to the person. These amendments continue this policy but adapt it to the new context of flexible PPL. They ensure that if the person has a continuous PPL period, the section will apply if it becomes known that the review is unsuccessful or withdrawn before the end of the person's continuous flexible period.

Changes to when employer determination comes into force

Item 176 amends paragraph 107(3)(b). Section 107 provides for when an employer determination comes into force. One of the ways in which an employer determination can come into force is if the Secretary receives certain information from an employer after an unsuccessful or withdrawn judicial review application. But if this applies, an employer determination can only come into force if the Secretary receives that information before the end of the person's PPL period. This is because there would be no utility in an employer determination coming into force in circumstances where it would not oblige the employer to pay anything to the person.

These amendments update paragraph 107(3)(b) to adapt it to the new context of flexible PPL. They ensure that if the person has a continuous PPL period, the employer determination will come into force if the Secretary receives the information before the end of the person's continuous flexible period.

Revoking employer determinations

Item 177 repeals table item 3 in subsection 108(1). This amendment is consequential to the addition of new subsections 108(1A), which cover the situation dealt with by existing item 3.

Item 178 inserts new subsections 108(1A)-(1D) into section 108. These subsections provide for additional circumstances in which the Secretary must revoke an employer determination.

Subsection (1A) replicates former table item 3, which item 177 would repeal. That is, it deals with the situation where a person has a PPL period and a decision is made that PLP is not payable during that period. The difference with subsection 108(1A) as compared with former table item 3 is that rather than taking effect on the day the decision is made, this decision will now take effect on a day specified by the Secretary.

Subsection (1B) is a new situation where the Secretary must revoke an employer determination. This subsection deals with the circumstance where a person has a continuous PPL period-that is, where the person is taking a block of flexible PPL days straight after the end of their PPL period. In this circumstance, the person's employer will ordinarily pay instalments during the person's continuous flexible period where there is an employer determination in force-see subsections 72(1) and (1A).

However, an employer should not be required to pay for instalments if a payability determination for a flexible PPL day falling within the person's continuous flexible period is revoked. (This might happen because, for example, the person decides to return to work early.) As such, subsection (1B) requires the Secretary to revoke the employer determination in that circumstance. If an employer determination is not in force during an instalment period, the employer is not required to pay instalments.

Subsection (1C) is another situation where the Secretary must revoke an employer determination. This provision is directed to where a person decides to claim PLP on a weekend that falls within a continuous flexible period. If this occurs, the person's employer should not have to pay instalments of PLP, because in the ordinary case employers would not pay salaries referable to weekends.

For each of subsections (1A), (1B) and (1C), the revocation takes effect on the date specified by the Secretary-see subsection (1D). This may involve some retrospectivity in some cases, since the date of effect specified by the Secretary may be a day before the decision is made. However, a retrospective revocation of an employer determination will not have a negative effect on any person's rights.

This is because, if an employer determination is revoked, then the employer will no longer be required to pay instalments from the day that revocation takes effect. Accordingly, making the revocation take effect from an earlier day will not have a negative effect on employers.

In addition, allowing a revocation to be backdated will not negatively affect claimants. For claimants, the consequence of an employer determination being revoked is not that they will not be paid. Rather, it may simply be that for some of the days for which a payability determination remains in force instalments will be paid by the Secretary instead of the person's employer.

Employers who elect to pay instalments

Item 179 repeals and replaces paragraph 112(a). Section 112 is in Division 4 of Part 3-5 of the Act, which sets out a mechanism for employers to opt in to paying instalments if, for whatever reason, an employer determination cannot be made for them. Briefly, this Division allows employers to make an election to pay instalments of PLP.

The amendments to section 112(a) will ensure that if an employer has made an election to pay instalments, they will pay instalments relating to PLP in the PPL period and the continuous PPL period, subject to the election being withdrawn or cancelled.

Employer notices under section 113

Section 113 deals with the situation where the Secretary has made an employer determination before the child is born. In this situation, the Secretary will have sent a notice to the employer under section 102, setting out the person's expected PPL period and, where relevant, the person's continuous flexible period.

However, as explained in the discussion of the insertion of subsection 57A(3), a person's expected PPL period and continuous flexible period may change when their child is born. This is because, before birth, the expected PPL period and continuous flexible period will be set on the basis of the person's nominated start date, and babies may be born before or after that date, thus shifting the actual PPL start day. People might also change their minds about when they want their period of PLP to start, and so change the days that they claim. For this reason, the dates specified in the section 102 notice may not be the dates for which a person is actually paid PLP.

Section 113 responds to this issue. It requires the Secretary to send a new notice to employers once a payability determination is actually made on the person's claim. If an employer receives a section 113 notice, they will have to pay for the period specified in that notice rather than the section 102 notice.

Item 180 amends paragraph 113(1)(a). This amendment is a technical amendment that ensures that a notice under section 113 will only be sent to an employer if there is an employer determination for the person and the person's employer that is in relation to a child of the person.

Item 181 amends paragraph 113(1)(b).

The amendments made by this section ensure that the obligation to provide this notice only arises after the Secretary makes a payability determination for the PPL period. This is to ensure that the obligation to give this notice does not arise every time the person claims PLP on a flexible PPL day.

Item 182 amends paragraph 113(2)(b), to update what the notice must say. The changes made by this item ensure that the notice must state the PPL period as well as the continuous flexible period, if this is relevant.

Item 183 amends the note to subsection 113(2) to reflect the new provisions about when employer determinations may be revoked.

Employer notices under section 114

Section 114 is another provision requiring the Secretary to send a notice to employers specifying the length of time that they will be required to pay instalments of PLP to a person.

Section 114 applies where the Secretary has made an employer determination and a decision is made to vary, set aside or revoke a payability determination. This memorandum earlier referred to the example of Usma, who had a payability determination for a 12 week PPL period and for a 6 week block of flexible PPL days that immediately follows the end of that period (ie, a continuous flexible period). When Usma decided to go back to work 14 weeks after first receiving PLP, she asked the Secretary to revoke the payability determination in relation to her last four weeks of PLP. When the Secretary does this, he or she will also be required to send a notice under section 114 to Usma's employer. In substance, this will advise the employer that Usma's continuous flexible period is only two weeks, not six weeks as was originally planned. Under section 72(1) and (1A), Usma's employer will only be required to pay instalments that relate to her PPL period and her revised continuous flexible period.

Item 185 amends paragraph 114(1)(a). This is a technical amendment that ensures that a notice under section 114 will only be sent to an employer if there is an employer determination for the person and the person's employer that is in relation to a child of the person.

Item 186 is a similar technical amendment, but in relation to paragraph 114(1)(b).

Item 187 amends paragraph 114(2)(b). Subsection 114(2) provides for what the notice to employers must state. This amendment ensures that the notice must state what the revised PPL period and the revised continuous flexible period (if there is one) are, following the variation, revocation or setting aside of the payability determination.

Eligibility for dad and partner pay - consequential amendments

Item 188 amends the guide to Part 3A-3 to ensure it is consistent with the new arrangements.

Items 189 and 190 amend subsection 115CB(5) to ensure that it refers to a PPL period that is tied to a particular child.

Item 191 inserts new subsection 115CB(5A) after subsection 115CB(5).

Section 115CB concerns eligibility for dad and partner pay.

New subsection 115CB(5A) provides that if there is in force a payability determination that PLP for a flexible PPL day is payable to a person for a child, then, despite subsections (2), (3) and (4), the person is not eligible for dad and partner pay for the child on that same day.

This ensures that a person cannot be paid dad and partner pay on a flexible PPL day on which they are paid PLP, and is consistent with subsection 31AB(5).

Item 192 amends subsection 115CB(7). This subsection ensures that a person is not eligible to claim dad and partner pay if they have already claimed a combined total of 90 days' PLP in relation to a child (whether those days are made up of days in the PPL period, flexible PPL days or other DAPP days).

Items 193-198 ensure that references to the Farm Household Support Act 2014 and the Social Security Act 1991 in section115CBA are consistent with how those Acts are referred to elsewhere in the Act.

Deductions from instalments in certain circumstances

The provisions discussed below, as well as new section 69B, will allow the Secretary to deduct the amount of a debt arising under the Act from a future instalment of PLP.

This power is necessary for the efficient administration of the Act. The Government expects that people will claim PLP on individual flexible PPL days but turn out not to be eligible on those days. For example, Sharon has decided to use flexible PPL days to go back to work 4 days a week after the end of her PPL period. On one of the individual days Sharon claims, she was not the primary carer of her child because she had to deal with an unexpected family emergency. Because of the unexpected nature of the emergency, Sharon could not notify the Secretary of her change of plans in time, and the Secretary paid Sharon an instalment in relation to the day, even though she was not eligible.

When Sharon notifies the Secretary of the fact she was not eligible, the Secretary would revoke the payability determination for that day. This will trigger a debt being owed to the Commonwealth. This provision will allow the Secretary to recover the debt by not paying an instalment (or part of an instalment) for the next day on which Sharon is scheduled to be paid PLP.

Item 199 repeals and replaces 166(3)(a) with two new subsections. This amendment is to ensure the existing provision works consistently with the new arrangements. This amendment will not lead to any changed operation in the section in practice.

Item 200 amends note 1 to subsection 166(3) to ensure it is consistent with the amendments to paragraph 166(3)(a).

Item 201 repeals and replaces section 167. Under the previous section 167, a debt only arose when the Secretary had paid all instalments of PLP to a person for a child. Under the new arrangements, a debt will arise if the Secretary pays an instalment of PLP, and that instalment exceeds the amount that should have been paid.

The change is to allow the Secretary to deduct amounts relating to overpayments of instalments from future payments of PLP. Using Sharon's example, above, this will effectively enable to Sharon to 'swap' her days: if she is overpaid for one day, she will not be paid for another that she claims.

Item 202 is a technical amendment to section 168(3)(b)(ii). It does not alter the operation of the section.

Item 203 amends paragraph 178(b) to update references to the Social Security Act 1991.

Item 204 amends section 182. Section 182 provides for the means by which the Commonwealth can recover debts arising under the Act.

This provision adds a reference to new section 190A.

Item 205 inserts new section 190A. As explained above, section 190A will allow the Secretary to deduct the amount of a debt arising under the Act from a future instalment of PLP. This power only relates to debts arising under the Act-see section 181.

Items 206 and 207 make consequential amendments to sections 207(3)(b) and 224(2)(b), to refer to the changes to section 101(1).

Item 208 and 209 insert new paragraphs into sections 275 and 276. These paragraphs alter the way the Act applies to adopted children and to claims made in exceptional circumstances. The amendments ensure that for such claimants, references to the child's second birthday become a reference to the second anniversary of when the child became entrusted to the person's care (in the case of section 275) and the second anniversary of when the person first became the child's primary carer (in the case of section 276).

Item 210 amends subsection 277(1) to accommodate the new concepts created by the Bill. Section 277 alters the operation of most (but not all) of the Act for parents of stillborn or deceased children. This amendment ensures that section 31AA is not affected by section 277 in relation to such claimants.

This amendment is consequential to the amendments in item 34, which specify the eligibility requirements for flexible PPL.

Item 211 amends the note of section 277 so that it reflects the addition of new section 31AA. The new note informs the reader that section 31 and 31AA deal with eligibility for PLP.