188.8.131.52 When Are Employers Required to Provide PLP?
When an employer determination must be made
An employer determination (1.1.E.60) must be made for a person and their employer if the following conditions are met:
- the person has a payability determination or an initial eligibility determination, and
- the person will have been employed by the employer (or by the Commonwealth) for 12 months or more immediately prior to the child's expected or actual DOB or placement where adoption is involved (as relevant), and
- the person is likely to be an Australian-based employee of the employer for the PPL period (1.1.P.200), and
- instalments of PLP are likely to be payable by the employer to the person for at least 8 weeks (40 consecutive PPL days - 1.1.P.170).
The employer must also have an ABN. This requirement does not apply where the person's employment is as a law enforcement officer or defence force member.
An 'Australian-based employee' is an employee:
- whose primary place of work is in Australia, or
- who works in Australia or overseas for an Australian Government employer (Commonwealth, state and territory or local government).
Certain people who do not fall into the usual definition of employee, such as Defence Force personnel and some law enforcement officers, are regarded as employees for the purposes of PPL.
Note: The only employees working overseas who can be paid by their employer are government employees.
If Centrelink makes an employer determination for a person and their employer, a notice must be given to the person and employer advising of this decision.
The employer must respond within 14 days after the date of the notice by either giving the Secretary an acceptance notice or applying for review of the employer determination.
An acceptance notice given by an employer must contain a declaration that the employer accepts their obligation to pay instalments of PLP to the person and contain bank account information and pay cycle information to enable Centrelink to pay PPL funding amounts to the employer at the appropriate times.
Centrelink provision of PPL funding amounts (1.1.P.180) to employers
Centrelink pays an amount equivalent to the gross amount of PLP payable to the claimant (generally 18 weeks) to the claimant's employer, usually by providing PPL funding amounts to the employer on a fortnightly basis, in advance of the employer's pay cycle for the employee. Employers can elect to receive the total required PPL funding amount for an employee in just 3 funding amounts.
Employer payment of PLP to employees
If an employer determination is in force for the person and their employer, and the employer has been funded to provide PLP to their employee, the employer is required to provide PLP to their employees in accordance with their employee's usual payroll cycle. Employers are not required to make superannuation payments in relation to PLP and employees do not accrue leave entitlements in respect of PLP.
Obligations of employers relating to provision of PLP
Payments of PLP are treated in a similar way to employment-related payments. Employers have certain obligations in relation to the PPL scheme including:
- providing their bank account details and their employee's usual pay cycle details so that PPL funds can be transferred to their bank account before they are required to provide PLP to their employees,
- providing PLP to their employees for their employee's PPL period and in accordance with their employee's normal pay cycle,
- withholding tax from PLP under the usual PAYG withholding arrangements,
- providing employees with written records of PLP paid to their employee - usually a payslip - within one working day after the pay has been transferred,
- including PLP in their employee's annual or part-year payment summary,
- keeping written financial records of PPL funds received from Centrelink and of PLP paid to their employee,
- returning any unpaid PPL funds to Centrelink,
- notifying Centrelink:
- if and when their employee returns to work before or during their PPL period,
- if and when an employee is no longer their employee, if this occurs before the end of the PPL period,
- if the employer changes their bank account or their employee's pay cycle,
- if the employer receives an incorrect PPL funding amount from Centrelink or if they are unable to provide PLP to their employee, and
- notifying Centrelink, in advance if possible, of ceasing to trade, including selling the business, transferring ownership or merging with another business.
Other employer obligations
An employer's obligation to pay an employee PLP is separate and additional to any other obligation the employer has in relation to the employee. For example, if the employer is obliged to provide paid leave to an employee through an industrial instrument such as a workplace agreement, or law, they will continue to have that obligation for the life of the agreement or law.
Pre-registration of employer details
Employers are able to register certain details with Centrelink, regardless of whether any claim has been made by an eligible employee. This allows employers to be prepared for their role in the scheme.
Act reference: PPLAct section 99A Payment of PPL does not affect other employer obligations, Part 3-2 Division 4 Obligations of employer relating to paying instalments, Part 3-5 Employer determinations, Part 4-1 Information gathering