The Coalition’s Paid Parental Leave Policy – What’s in it for you?

Prior to the September 2013 election, the Coalition released their Paid Parental Leave Policy (“the Policy”) which aims to “give mothers six months leave based on their actual wage”.

THE FACTS

• The policy is proposed to commence from 1 July 2015.
• Mothers will be eligible for 26 weeks paid parental leave at their actual wage (or the national minimum wage – whichever is greater).
• Mothers will be entitled to superannuation entitlements on the payments.
• Fathers may take 2 of the 26 weeks as paternity leave at their actual wage (or the national minimum wage – whichever is greater).
• Both parents may take their leave simultaneously or separately.
• Fathers may be the primary care giver; however they will be paid at the lower of the father’s or mother’s actual wage (or the national minimum wage – whichever is greater). This is to prevent mothers going back to work early so that the family can access higher benefits from the father’s wage.
• The funding will come from a 1.5% levy, to be charged on companies with taxable incomes that exceed $5 million. This levy is proposed to be offset bythe Coalitions announcement to cut Company Tax casino spiele by 1.5%.
• The Government will make payments to parents from the Family Assistance Office, rather than employers liaising with Centrelink and paying parents.

The Coalition notes the following examples on their website:

1. The Coalition’s paid parental leave scheme will result in a woman earning the average full time salary of around $65,000 receiving $32,500 – and they will be around $21,300 better off under the Coalition’s scheme relative to Labor’s scheme.
2. Importantly, the Coalition’s paid parental leave scheme also includes superannuation. For example, a woman earning $65,000 who has two children when aged 26 and 29, will be around $50,000 (in today’s dollars) better off in retirement than under Labor’s scheme, which does not include superannuation.

The current parental leave scheme (from the Labour government) provides for eligible employees to receive 18 weeks paid parental leave at the minimum wage, and the new scheme is therefore very appealing to future parents.

The Government will need to pass the legislation through both houses of government in order for this to be effected.