Paid Parental Leave - a great start

  • Laila Harré
Labour

From July 1 2002 20,000 working women a year will qualify for 12 weeks paid parental leave following the birth or adoption of a child, Labour Minister Margaret Wilson and Associate Labour Minister Laila Harré announced today.

The scheme will cover about two thirds of working mothers who have babies, the rest are either self employed or don’t meet the eligibility criteria set out under the Parental Leave and Employment Protection Act 1987. These women will still qualify for the Parental Tax Credit if they are on low incomes.

Margaret Wilson said paid parental leave is a significant social policy advance and represents a major achievement for the government and the unions and women’s groups who have campaigned for such a change over many years.

“The Labour Party campaigned at the last election for paid parental leave, supporting a 12-week period as soon as economic conditions allowed.

“The scheme as announced today is a cost-effective enhancement of working conditions for New Zealanders. It continues the process of bringing employment conditions in New Zealand into line with the norm for similar countries”.

Laila Harré said the Alliance has consistently put 12 weeks paid parental leave forward as a priority, and today's announcement will go down in history as one of our most significant achievements within the Labour-Alliance Coalition Government.

"This paid parental leave scheme should be seen as a good starting point. It's now up to New Zealanders to decide how it can best be expanded, and how this should be paid for.

“This is the first non means-tested piece of income policy since the family benefit was abolished. The fact that this Government has introduced paid parental leave as a universal provision is a significant shift.”

Eligible women will receive a maximum payment of $325 gross per week, which equates to 53 per cent of New Zealand’s average male and female weekly earnings. The annual gross cost for the scheme is estimated at about $57 million once PTC savings and tax are accounted for. The new government money needed is estimated at around $42 million, including implementation and delivery.

This equates to a net figure (based on a 21 per cent tax rate) of $256.75.

Up to half of female wage and salary earners will get 80 per cent of their earnings, and about one third will get 100 per cent.

Eligibility for paid parental leave will be based on the existing criteria set out under the Parental Leave and Employment Protection Act 1987.

This means parents who have been in paid employment with a single employer for 10 or more hours a week for a full year before the due birth or adoption date of a child will receive $325 gross per week or 100 per cent of their previous weekly earnings, whichever is lower.

The Department of Labour as the agency responsible for delivery of PPL will be contracting IRD to process the payments. The Department of Labour will be responsible for public information on the scheme and responding to inquiries about eligibility.

Payment can be shared between eligible partners, including those in same sex relationships.

The existing criteria for unpaid extended leave of up to 52 weeks will not change.