Paid Parental Leave

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FIONA PARKER: All right let’s talk about a very important issue. You’re pregnant, you want to take your paid maternity leave, but really you don’t want to go back to work to your job after having the baby, but you don’t really want to quit your job either because you want maternity leave money. Well, under a new Federal Government draft law, pregnant women will be able to quit their jobs and still be paid the minimum wage. Jenny Macklin is Federal Families Minister. Good morning, Minister.

JENNY MACKLIN: Good morning Fiona.

FIONA PARKER: I thought the whole idea of Paid Parental Leave was to keep people in the workforce, so why pay them maternity leave if they quit their jobs?

JENNY MACKLIN: You’ll still have to meet the work test and the reason we’ve made this change is really to make sure that paid maternity leave is paid by their employer. As you could imagine if you’re a seasonal worker it could be very difficult to continue your job if you’re heavily pregnant. For some of these mothers they may have their contract finishing up before their baby is born. But if she still meets the work test, that means, having worked 330 hours for at least 10 of the 13 months prior to the birth, or adoption of their child, they will be eligible. But they have to meet the work test.

FIONA PARKER: But if you’re not a seasonal worker, would you still be able to quit your job and be paid the minimum wage? So quit your job after three months before you’re due to have the baby?

JENNY MACKLIN: As long as you meet the work test. The important thing is that you meet the work test and then of course you will be able to get access to Paid Parental Leave. The whole idea of Paid Parental Leave is to support mothers and where they want to share the benefit with dad, with the dads as well, so that they can get support for a new baby coming in to their family.

FIONA PARKER: I’m sure many women out there would be very pleased with the idea of being able to quit their job and still get the money. But from a Government economic perspective and the idea behind parental leave in the first place to keep people in the workforce, doesn’t that contradict itself?

JENNY MACKLIN: Well our objective is to make sure that it’s available for casuals, seasonal and contract workers. And I think if you think about their circumstances and making sure that we support them as well as supporting people who have got continuing employment, you can understand why we’ve made this change. I actually think most people will continue to maintain their connection with their employer. They might not want to take 12 or 18 months off work, that’s something they’ll be able to discuss with their employer. But many, many mothers now want the option of returning to work. So I think it’s unlikely that they’ll take the option you’re talking about. I think it’s more likely they’ll want to keep the connection with their employer.

FIONA PARKER: But they don’t have to keep that connection, do they?

JENNY MACKLIN: No they don’t, they don’t have to and they’ve never had to. That’s not something that’s changed. The real difference is that we want to make it available for those people who are for all sorts of reasons – it might be their health, it might be because the type of job they’re doing is just too difficult for a heavily pregnant woman. We need to make sure that we support those families as well as other families.

FIONA PARKER: The Opposition is talking about inequitable treatment as they’re calling it between two groups of women, in that if you don’t have a job to quit you simply get the Baby Bonus. But if you have a job and then you quit you can get around just under ten grand?

JENNY MACKLIN: What we’re going to do is have a mechanism where people can look at the circumstances that would put them in the best position. So there’ll be a calculator available from the beginning of October this year. People can look up and put their own details into a Centrelink calculator. They can figure out whether or not they’re better off receiving Paid Parental Leave or better off receiving the Baby Bonus. I must say I think that’s a bit hypocritical of the Opposition to raise this point. They want to impose a huge tax on business to pay women up to $150,000 of Paid Parental Leave and of course if you weren’t working the other women would only get the Baby Bonus. So I think it’s a little hypocritical of them to make that point.

FIONA PARKER: But nevertheless I understand that the Coalition is expected to pass the Bill. What are you hearing?

JENNY MACKLIN: They have said that they will support the legislation in the Senate and I think that’s extremely important for parents who’ve frankly waited decades for the introduction of Paid Parental Leave. I hope that that is the case and that from 1 January next year we will finally have Australia catch up with the rest of the developed world and we’ll have a national Paid Parental Leave scheme in Australia

FIONA PARKER: So how much can people expect to get?

JENNY MACKLIN: You’ll receive $543 a week, that’s the National Minimum Wage, for eighteen weeks. So that’s for eligible parents of children who are born or adopted after 1 January next year.

FIONA PARKER: Do you think there’ll be people waiting around before they conceive?

JENNY MACKLIN: Well if your baby is born after 1 January then you will be eligible for the new Paid Parental Leave scheme?

FIONA PARKER: Are you going to do a Peter Costello for us?

JENNY MACKLIN: No, I don’t think so, no. I think I’ll leave that up to parents.

FIONA PARKER: All right, you’re not going to tell everyone to go off and have one for the country now?

JENNY MACKLIN: No, no. I think that’s a very personal matter.

FIONA PARKER: I understand that a six month grace period for businesses has been agreed to, why is that?

JENNY MACKLIN: Yes, we have decided that for employers where they’re going to be the paymaster. So where they’re going to be the responsible people actually paying the Paid Parental Leave, that they can choose to do that after the new financial year starts. We realise that it might be easier for employers to line it all up with the new financial year. So starting on 1 July next year if employers choose that then the Family Assistance Office will be the paymaster from 1 January for any families in that circumstance.

FIONA PARKER: And after this grace period, how will the scheme be administered?

JENNY MACKLIN: It will be administered by the Family Assistance Office providing the funding to employers and then the employers will be the paymaster. We do think it’s very important where it’s possible for employers to keep connection with their employees and so we’ve really wanted to pick up the recommendation of the Productivity Commission that employers take on that paymaster function. There will be circumstances of course where people have either lost their jobs or aren’t employed by any particular employer on the day their baby’s born. In that case the Family Assistance Office will pay the Paid Parental Leave.

FIONA PARKER: Okay, so just to put it very simply. If you get pregnant in the next little while and you’re going to have a baby, this starts on 1 January next year. It’s an eighteen weeks scheme at the minimum wage which is $543.78 to be exact a week. But what are the hours you must work before the birth?

JENNY MACKLIN: You must have worked 330 hours for at least 10 of the 13 months prior to the birth or adoption of your child. So that’s around a day a week.

FIONA PARKER: So that’s not much is it?

JENNY MACKLIN: Well the whole idea is to make Paid Parental Leave available to people who really have not had paid parental leave provided by their employer. We know that the statistics tell us that less than a quarter of women on very low wages have access to employer provided paid parental leave, and that changes dramatically for higher income women. So we really have wanted to make sure that for women in the hospitality industry for example, where they don’t have paid parental leave that finally they too can have time off when their baby’s born. I think it’s very important for those families.

FIONA PARKER: And there is a bit of a cap on the amount that you should be earning before you’re eligible for this, so less than, how much a year?

JENNY MACKLIN: Yes, there’s an income test of $150,000 a year, but that’s an income test on the income of the primary carer which will largely be mum. So it’s a pretty generous income test.

FIONA PARKER: And in terms of this idea that women will be able to quit their jobs and still be paid that wage so they don’t have to make a commitment to going back to work after they have their maternity leave. Some reports are calling that a loophole. Is this a loophole or is that a planned and considered part of these laws?

JENNY MACKLIN: We very carefully considered that. I was very sorry to see that description in the papers this morning because it’s a decision the Government’s taken recognising that for many women, particularly women who are doing heavy work, seasonal workers, contract workers. We wanted to make sure that Paid Parental Leave is available to them as long as they do meet the work test. So it’s certainly not a loophole, it’s something that the Government has decided to do to make sure that Paid Parental Leave is available for casual, seasonal and contract workers, as long as they meet the work test.

FIONA PARKER: Jenny Macklin, Federal Families Minister, thank you.

JENNY MACKLIN: Thank you Fiona.