What’s going on with paid parental leave?

CHANGES to paid parental leave to stop “double dipping” are set to hit mothers-to-be. This is what’s happening.

The Turnbull Government is trying to change paid parental leave arrangements. Picture: iStock

THE Turnbull Government look set to pass cuts to paid parental leave to stop “double dipping” with consequences for prospective parents around Australia.

The government has a bill before parliament aimed at preventing new mums from claiming money from both the government’s scheme and their separate employer arrangements.

So far it is being held up by Senate crossbenchers who are concerned about its fairness and whether it will impact women who were already pregnant.

Prime Minister Malcolm Turnbull wouldn’t confirm whether his government had reached a compromise deal with the crossbenchers but it has reportedly proposed a more generous scheme.

Here’s what’s going on:

THE CURRENT POLICY

Currently the government provides 18 weeks’ leave paid at the minimum wage ($11,826) to new parents earning less than $150,000, and this is on top of any leave provided by their employers.

WHAT’S ACTUALLY CHANGING?

Last month the Turnbull Government introduced a bill so that it only tops up leave to a maximum of 18 weeks.

So if a new mother got 10 weeks’ leave from her employer, the government would pay an extra eight weeks at the minimum wage.

This new rule was due to start from January meaning women who are already pregnant would be impacted.

According to The Sunday Telegraph, the government is now looking at increasing the proposed limit from 18 weeks to 20 weeks — a $1300 boost for the average mother — to try and get the policy approved through the Senate.

The start date would be moved back to October 1, 2017.

Under the revised proposal 97,000 or 57 per cent of families, especially low income earners, would be better off than under the current scheme.

Some public servants would also be excluded from the public scheme and there would also be a 20-week cap on parental leave for the government and workplace schemes.

The new scheme is expected save taxpayers between $600-$750 million.

WHAT WILL BE THE CONSEQUENCES?

Opposition families spokeswoman Jenny Macklin said even under the new plan about 70,000 mums with a median income of $62,000 would be on average $5600 worse off.

About 4000 new mums would lose access to the government scheme completely and be more than $12,000 worse off.

“Pregnant mums need certainty when planning for the birth of their baby, the last thing they need is confusion about how much paid parental leave they are entitled to,” she said on Sunday.

Some have previously said changing the scheme could have unintended consequences.

When the policy was first unveiled in 2015, Australian Chamber of Commerce and Industry chief executive Kate Carnell said it was hard to see why employers would keep paying parental leave.

Working mother holding baby while talking on cell phone at desk. Child. Mobile phone. Woman. Generic image. Thinkstock.

Ms Carnell said employers may start look at providing other employee incentives.

“The reason employers are paying additional leave entitlements is to give employees additional reasons to work for them,” she said.

Australia Institute senior economist Matt Grudnoff agreed, and said employers would just withdraw their scheme.

“The government won’t save money but the employers will.”

WAIT, DIDN’T THE COALITION SUPPORT PARENTAL LEAVE?

In 2011, Labor introduced the 18 week public scheme as a safety net while allowing employers to top up parental entitlements so mums could spend more time bonding with their babies.

Back when Tony Abbott was the leader of the Liberal Party he wanted to boost this, proposing his own a “rolled gold” scheme that would have given mothers six months’ leave at their current wage.

But there was a sharp turnaround after the Coalition took power and then-treasurer Joe Hockey controversially accused mothers of “double dipping”.

Mr Hockey was the one who first put forward the changes to stop mums getting the government money on top of what they got from their employers.

These changes were not able to be passed through the parliament but remained part of the Coalition’s election platform under Malcolm Turnbull.

Social Services Minister Christian Porter told the National Press Club last month some people earning up to $150,000 a year could receive $30,000 in parenting payments from an employer as well as $12,000 from taxpayers.

It has also been noted about three per cent of mums who have accessed the government-funded leave over the past five years earned more than $120,000.

An ABC survey taken during this year’s election campaign found 58 per cent of voters believed government payments should not be made available if an employer was also making paid leave available.

— With AAP

Originally published as What’s going on with paid parental leave?