Social security refers to welfare payments provided by the Australian Federal Government. These payments generally fall under one of four pieces of legislation:
- Social Security Act 1991 (Cth) (“the SSA”) provides for payment to eligible people, certain pensions, benefits and allowances, such as the age pension, unemployment, carer allowance and payment, and disability pension.
- New Tax System (Family Assistance) Act 1999 (Cth) provides for family tax benefits, maternity allowances and childcare benefits.
- Student Assistance Act 1973 (Cth) provides for allowances and benefits for eligible groups of students and apprentices.
- Paid Parental Leave Act 2010 (Cth) provides financial support to eligible working parents of newborn or recently adopted children.
The current Superannuation Guarantee rate is at 9.5% for the 2019/2020 financial year; the rate will remain at 9.5% until 30 June 2021; it will increase to 10% from 1 July 2021 and then increase by 0.5% increments each year until it reaches 12% by 1 July 2025. Employees can choose to make extra voluntary contributions to their superannuation funds and receive tax benefits for doing so. If individuals contribute more than the cap, they must pay the superannuation excess concessional contributions tax, which is set at 31.5%.
Healthcare and Insurances
Employers are not obliged to provide health insurance for employees in Australia.
Holidays and Annual Leave
The NES entitles employees to be absent on certain public holidays and also preserves the right of an employer to make a reasonable request that an employee work on a holiday, as well as the employee’s right to refuse upon reasonable grounds. Under the NES, full-time employees are entitled to four weeks of paid annual leave (calculated by reference to the employee’s base rate of pay) and part-time employees to a pro-rata amount. Certain shift workers are entitled to five weeks of paid annual leave. Annual leave accrues over a year according to the employee’s ordinary hours of work (i.e. the hours set out in the relevant modern award or enterprise agreement). If the period during which an employee takes annual leave includes a public holiday, a period of another kind of leave (including sick leave, personal leave or community service leave, but not unpaid parental leave), that holiday or period of other leave is not counted as annual leave and therefore, if an employee falls ill during a period of annual leave, for the period that he qualifies for sick leave, he will have that amount of annual leave credited, and sick leave debited.
Maternity and Parental Leave
Unpaid leave is provided for parents who are giving birth to, or are adopting, a child; up to 12 months’ unpaid leave (or 24 months with the employer’s consent) for employees with a minimum of 12 months continuous service. Firstly, some employers will have their own paid leave scheme, where longer serving employees will be granted paid leave for a period (usually, this is for a short period and not for the entire period of leave). This type of entitlement is purely contractual: in the absence of any agreement, there is no right to such leave. Secondly, government funded leave provides financial support to eligible working parents of newborn or recently adopted children. Paid parental leave is paid to the child’s primary carer for up to 18 weeks of pay based on the rate of the national minimum wage. Eligible working fathers and partners (including same-sex partners) also get 2 weeks leave paid at the national minimum wage. Both parents may take separate periods of 12 months’ parental leave, including up to eight weeks of leave taken concurrently; these provisions have been extended to apply to same-sex couples.
Sickness and Disability Leave
Permanent employees are entitled to accrue 10 days of paid personal/carer’s leave per year, and 2 days of compassionate leave per year (to spend time with a member of their immediate family or household who has sustained a life-threatening illness or injury, or after a death of a member of the employee’s immediate family or household). The term ‘personal/carer’s leave’ effectively covers both sick leave and carer’s leave. Australian law also entitles casual employees to 2 days of unpaid carer’s leave and 2 days of unpaid compassionate leave, but not personal or sick leave. Meanwhile, disability leave is not applicable in Australia.
An employee’s entitlement accrues over each year of employment according to the number of ordinary hours worked; continues to accrue when an employee takes leave; and accumulates from year to year. In 2020, the High Court of Australia (by majority) clarified how personal/carer’s leave accrues to permanent part-time employees who worked irregular and longer hours. The Court explained that a person employed to work 36 hours per week, over three 12-hour shifts, would accrue 72 hours of personal/carer’s leave over the course of a single year (being the product of 36 hours and 52 weeks, divided by 26), and rejected the proposition that such a person would be able to accrue 120 hours of leave over the course of a single year (being the product of 12 hours and 10 days).
For all periods of personal/carer’s leave or compassionate leave, an employee must give his or her employer notice. The employer is entitled to request evidence to prove the reason for the leave and a failure to provide this will cause the employee to lose his entitlement to the leave. As with parental leave, paid personal and carer’s leave provisions stipulate that awards and agreements may include terms regarding the cashing out of such leave; any cashing out terms however, must require that the employee be left with a balance of at least 15 days’ accrued leave after the cashing out. As with annual leave, the cashing out arrangement must be included in a separate written agreement.
Other Required or Typically Provided Leave
Community Service Leave: employees are entitled to be absent from work for three main reasons (termed “eligible community service activities”): jury service; a “voluntary emergency management activity”; and any other activity in the nature of community service that the regulations prescribe.
Long Service Leave: the NES does not specifically provide for a long service leave entitlement; it merely provides that an employee is entitled to long service leave as stipulated in the applicable, pre-modernised award. In cases where there is no applicable award, an employee’s entitlement will be derived from state and territory legislation, except where an industrial instrument modifies or excludes the legislative provisions.
Domestic Violence Leave: all employees, including part-time and casual, who are experiencing family domestic violence, or who are providing care or support to another member of their family/household who is experiencing domestic family violence are now entitled, under the NES, to 5 days of unpaid family and domestic violence leave in a 12-month period (employers may agree to employees taking more than 5 days of unpaid leave.
Pensions: Mandatory and Typically Provided
Age Pension: a pension is paid to residents of Australia who have reached pension age and are assessed as not having adequate levels of income or assets that can be used to support themselves. From 1 July 2017 the qualifying age increased to 65 years and 6 months, to continue increasing by six months every two years for the following six years, reaching 67 years by 1 July 2023. The maximum rate paid for an individual is $916.30 per fortnight and $690.70 for a couple. Unlike pension payments of many other countries, in Australia, workers do not contribute to a pension or insurance within Australia, and the payment is available subject to means testing.