The birth of our national paid parental leave scheme After a 30 year campaign a national Paid Parental Leave (PPL) scheme is set to take effect in the new year, following the passage of the amended Bill through the Senate last month. This is an historic event and big win for Australian working families. It will give working parents greater financial flexibility to make better choices to balance their own family and work responsibilities, needs and aspirations. Fast facts about the new scheme PPL will commence on 1 January 2011 and deliver 18 weeks pay at the minimum wage (currently $570 per week) to the primary carer (usually the mother) providing they have worked: • Continuously for at least 10 of the 13 months prior to the birth or adoption of a child; and • At least 330 hours in that 10 month period (ie, just over one day per week). PPL will cover employees (including casual and seasonal workers), as well as contractors and the selfemployed. Parents can decide to share the PPL benefit between them; notwithstanding the full 18 weeks of PPL must be taken within 12 months of the birth of the child. (For example if a family decides it is best for the mother to return to work after 12 weeks, they may be able to transfer the unused part of their PPL to the father where he also meets the eligibility criteria. PPL cannot be taken part-time or shared at the same time though). The Productivity Commission estimated that an 18 week PPL payment at the minimum wage, when combined with other leave entitlements, will give more than 90 per cent of parents the option of taking at least 26 weeks of leave without undue financial stress. Parents will be able to apply for PPL up to three months prior to the expected birth of their child by completing an application form and lodging it with the Family Assistance Office. (Applications can be made from 1 October 2010). In most cases, the parent will receive their PPL payment through their employer. If they haven’t been with their employer for 12 months, their payment will be made through the Family Assistance Office. PPL payments will be taxable income and will affect entitlement to family assistance payments. However, income from PPL will not be treated as income for Parenting Payment (partnered & single) or other income support payments such as the Disability Support Pension and Newstart allowance. PPL scheme recipients will not be eligible to receive either the $5,185 Baby Bonus (except in cases of multiple births) or Family Tax Benefit Part B. Eligible families can choose whether to participate in the PPL scheme depending on their individual circumstances. Families electing to receive PPL will not receive the Baby Bonus (except in multiple birth cases) or Family Tax Benefit Part B during the 18 week PPL period. An online calculator will be made available from September to help parents make that choice. PPL will also be available in the tragic circumstances of a stillborn baby. What about stay at home mums or others not eligible for PPL? New mothers who are not eligible for PPL will continue to receive, if eligible, the Baby Bonus (incometested to families with an income equivalent to $150,000) and Family Tax Benefit Part B.
The Baby Bonus currently provides $5,185 paid over 13 fortnights and is non-taxable (this will increase to $5,300 from 1 July 2010). What it means for families There are lots of good reasons for introducing a national PPL scheme. Fundamentally it’s about ensuring new mothers can spend time with their babies – to bond with them, physically recover and establish successful breastfeeding – without financial pressures forcing them back to work too early. Outgoing Australian Council of Trade Unions (ACTU) President Sharan Burrow noted “Two-thirds of Australian women who have a baby currently get no paid parental leave. Parents have been forced to make a choice between having a child and paying the bills.” It also makes good economic sense. Ms Burrow further asserted “…this money will go directly into spending on the necessities that go with having a baby at a time when most families have been reduced to living on one wage…It also recognises that paid maternity leave is good for business and the economy because it will help keep skilled, experienced female staff attached to the workforce.” What it means for Queensland school employees The vast majority of Queensland non-government school employees already have access to employerfunded PPL through union collective bargaining negotiations. In terms of operational arrangements for the new national PPL scheme, the Productivity Commission has indicated that any employer-funded PPL available to the employee through collective bargaining should be taken first, then eligible employees can also access the federal government benefit of 18 weeks paid parental leave at the minimum wage rate as of 1 January 2011. What it means for employers The Family Assistance Office will ensure that employers receive the required federal government funds in advance of their making PPL payments to the employee in their usual payroll cycle to avoid any undue strain on cash flow. Employers will largely use their existing payroll systems. Reasonable costs in implementing the scheme will be tax deductible for relevant employers. It is estimated that only nine per cent of all businesses will be involved in paid parental leave in any given year, and only three per cent of small business. Employers will not be required to make superannuation payments for the period of government-funded PPL, nor will employees accrue leave entitlements over this period. Employers will be responsible for making PPL payments only where the employee has completed 12 months continuous service prior to the date of birth or adoption of the child. IEUA-QNT members contribute to campaign win IEUA - QNT members can be very proud of our contribution to this union achievement and wider campaign. Together, we have: • Collected 1,200 names on the 25,000-strong signature community petition presented by the ACTU to federal politicians last month; • Organised signatures on hundreds of campaign postcards;
• Participated in political lobbying of federal MPs and Senators in targeted areas, ahead of the 2009 Budget; • Promoted public support by marching on Labour Day; • Engaged members on maternity leave to help with campaign activities and with education through the new IEUA-QNT e-zine; • Attended the Queensland Council of Unions’ media events; • Established a designated section on the IEUA-QNT website; • Forwarded chapter briefings to members outlining the importance of this issue in the lead up to International Women’s Day and Labour Day; • Organised a Paid Parental Leave team to run in the annual Brisbane Mother’s Day Classic fun run; • Sent digital video petitions to federal politicians; and • Sent campaign postcards online. Next Steps An estimated 148,000 people will qualify for the PPL benefit each year. Part of the amendment made to the Bill in the Senate was to provide for a review of the new scheme in no more than two years. This may include matters such as superannuation and secondary carer’s leave (formerly known as paternity leave). The review provision is important because no paid paternity leave has been mandated in the first iteration of the new scheme, nor will employers be required to pay superannuation on this benefit - contrary to the Productivity Commission’s initial recommendations. The federal government’s failure to include superannuation payments has been criticised by Federal Sex Discrimination Commissioner, Elizabeth Broderick (among others) for not going far enough. Commissioner Broderick acknowledged it was “a good first step but should have included superannuation payments” as women who choose to care remain disadvantaged through lower retirement income. Notwithstanding some omissions, however, the new national PPL scheme will mean babies can get a good start, parents can be relieved of some financial pressure and employers are assisted in retaining good female staff. Certainly a very healthy beginning. Ros McLennan Assistant General Secretary rmclennan@qieu.asn.au
Good reasons to support paid parental leave 1. New parents often cannot survive on one income, or do not have sufficient savings to enable one of them to choose to stay home and look after babies for a decent amount of time – if that is what they want to do Almost two thirds of Australian parents have no access to paid parental leave. Cost of living pressures mean some new mothers must return to work too early just to keep the family afloat financially; 2. Paid Parental Leave makes good economic sense The cost of a national paid parental leave scheme is around $250 million, representing only about a two per cent increase in spending on existing family assistance measures. Overall the costs would be significantly offset from reduced social welfare payments – including the removal of the baby bonus for employed parents and tax revenue from working parents. 3. Increase retention rates for female workers Research demonstrates that women who have access to paid maternity leave have a return-to-work rate approaching 90 per cent. This helps business retain skilled staff. Encouraging a larger number of women workers to return to paid employment is also good news for the federal government’s taxation revenue.
4. It’s the socially just thing to do Without a national paid parental leave scheme, it has been left to collective bargaining outcomes – with varying results. Typically, professional women working in highly unionised industries have achieved a level of success in accessing paid parental leave; however, there remains significant equity issues for women working in casual or short term contract positions.