The ‘game-changing’ reforms to paid parental leave

It’s the major shake-up that will change the lives of new mums and dads. For the first time, parents will be in control of how they take paid parental leave.

EXCLUSIVE

For the first time, new parents will be in control of how they take paid parental leave.

Until now, primary carers — mostly women — have been forced to take Parental Leave Pay as one block of 18 weeks.

But now, a new mum or dad could take, for example, 12 weeks after giving birth then take the balance later.

Minister for Women Kelly O’Dwyer will announce the “game-changing” reform on Tuesday with the policy to take effect in 2020.

Gemma Toogood with her son, five-week-old Rafael. Picture: Jason Edwards

The reform is the centrepiece of O’Dwyer’s $109 million Women’s Economic Security Statement at the National Press Club in Canberra.

The reform involves parents being able to take their 18-week paid parental leave entitlement in an initial block of 12-weeks in the first year of their child’s life and a further six weeks however they choose before their child turns two.

This could include taking one day a week of leave for 30 weeks, meaning whoever is the primary carer could work a four-day week and still be paid for the fifth day at home with their kids via the government entitlement; saving on childcare fees and other caring-related expenses when they may need it most.

Or it may be six periods of one-week of leave over the course of a year or any configuration that suits their individual circumstances.

Laura Lovitt, who works at Flinders Univeristy in Adelaide, welcomes the planned reforms. Picture: Greg Higgs

The new policy is part of a strategy to target cost of living pressures for parents, ahead of a general election in the first half of next year.

The new flexible arrangements will help small business to better co-ordinate around parental leave for their staff.

“This is a real game-changer for parents and particularly for small businesses,” Ms O’Dwyer said.

The minister said it was through her own experience as a working mum to Olivia, three, and Edward, 18 months, and by talking to “countless families across Australia” that she realised flexibility was key to changing the dial on getting more women and parents to stay in the workforce.

“We want to deliver choice to women and their families and we know fathers also want to take time with their children so there needs to be more flexibility in the system,” she said.

“Thousands of Australian parents will be better off under our changes.

“These new measures won’t just give women and their families greater choice, they will also help grow the economy.”

Zoe Chaffer with her daughter Lily, 16 months. Picture: Justin Lloyd.

Currently, parents of a newborn or newly adopted child who access the 18-week Parental Leave Pay are only able to do so in one concurrent block within the first year of their child’s life.

The benefit is paid at minimum wage totalling $719.35 per week before tax and is eligible to mothers or fathers who are the primary carer and have earned less than $150,000 individually over the course of the financial year immediately prior to receiving the benefit provided they meet the work test — which the government will also amend.

In 2017-18, a total of 159,372 parents started receiving Parental Leave Pay according to the Department of Social Services.

Ms O’Dwyer will today additionally propose to extend the break between working days from the current 8 to 12 weeks and allow women to move their work test period if they have had to stop work early due to a workplace hazard.

The new policy would need to be introduced to parliament as legislation and will begin on 1 July 2020 — meaning the Coalition will need to be re-elected and pass it through both houses to see it become a reality.

Ms O’Dwyer said while many men took parental leave and more needed to be done to facilitate that it was still women who mostly took time off and suffered poorer economic security as a result.

Women are likely to earn less than men; they are likely to work part-time at over twice the rate of men; and at retirement age there is a 42 per cent gap in their superannuation balance.

“We want to ensure that women can build their financial security to help them choose their own path so they and their families can live their best lives,” she said.

The policy last night was welcomed by parental support groups.

Co-founder of Circle In Kate Pollard said: “It is great that the government is looking at innovative ways to support working parents”.

Alys Gagnon, executive director of The Parenthood also welcomed the policy shift but said more could be done to ease the burden on parents, including bringing down childcare fees and extending parental leave beyond 18-weeks.

“If you can give parents more options at a time of their life that often contains very big surprises you are doing the right thing,” she said.

@pollietracker

CHANGES TO PARENTAL LEAVE

* 18-week parental leave now can be split.

* 12-week block must be taken in first year then remaining six weeks taken in any configuration that suits the family and employer.

* Commences 1 July 2020

* Must be used within 2 years of birth or adoption

* Small employers / small business, will be able to work with parents to work out what works best. Currently if someone takes the whole 18 weeks small businesses can’t work with their employee to potentially split it.

* Work test modified to extend the break between working days from 8 to 12 weeks and allow women to move their work test period if they have had to stop work early due to a workplace hazard.

WHAT THE PAYMENTS COULD LOOK LIKE

* 18-weeks of $719.35 per week in one block - $12,948.30

* One block of $719.35 per week for 12 weeks - $8632.20

* Six weeks of $719.35 taken at a later date in one block - $4316.10

* Six weeks of $719.35 taken at one day a week over the course of a year - $143.87 per week for 30 working weeks

@pollietracker

Originally published as The ‘game-changing’ reforms to paid parental leave