Proposed changes to paid parental leave will impact new mums and employers.
Prospective new mothers will soon be dealing with changes to paid parental leave entitlements as the Federal Government edges closer to passing new laws.
The Fairer Paid Parental Leave Bill, which is before parliament, aims to stop parents from claiming money from both the government’s scheme and their employer’s. This was controversially labelled “double-dipping” by former Liberal treasurer Joe Hockey.
Currently, new mothers who earn less than $150,000 a year can access 18 weeks of leave paid at the minimum wage under the government scheme – $12,106 per household – on top of any paid parental leave from their employer.
But the changes mean the government will now only top up leave provided by employers. So, if a new mum receives nine weeks of leave from her employer, the government will deliver the remaining nine weeks.
Opponents argue that new mums will either have to cut short their paid parental leave and return to work to cover their bills or stay at home with their baby and be thousands of dollars worse off.
Researchers at the University of Melbourne say scaling back entitlements will result in fewer health benefits for mothers. Associate Professor of Sociology Belinda Hewitt and her team say evidence points to longer paid parental leave giving extra mental and physical health benefits for mothers.
“In a systematic review of international literature, we found paid maternity leave for working mothers was associated with better mental health and well-being, general health and physical well-being,” she says. “Any shortened paid leave associated with ending ‘double dipping’ may have unintended health consequences for women.”
But Minister for Social Services Christian Porter says the updated legislation will be fairer for all parents, particularly low-income earners.
“The government understands the important role of paid parental leave in supporting the health and wellbeing of mothers and babies and in encouraging workforce participation,” he says. “The measures in this Bill are designed to support these objectives in a fair and equitable way that sees paid parental leave funds directed to those most in need of assistance.”
Porter says the new scheme will also reduce red-tape costs for business.
“This Bill will remove the mandatory requirement for employers to administer taxpayer-funded parental leave pay,” he says. “And the change will generate an estimated $44 million reduction in annual compliance costs for Australian businesses.”
Porter says the proposed legislation is supported by the business community, citing a 2013 Australian Chamber of Commerce and Industry survey that showed 84 per cent of businesses agreed employers should not have to administer the paid parental leave scheme.
Senate cross-benchers are close to reaching a compromise with the Turnbull Government, so changes to the scheme could be passed in early 2017.