Curtin University taxation expert warns reduction to Paid Parental Leave is step backwards

IN THE wake of Social Services Minister Christian Porter’s reintroduction of legislation to reduce access to 18 weeks Paid Parental Leave (PPL) for new mothers, experts warn a reduction in entitlements is going backwards, while local members of Parliament said the changes will be more equitable for employees.

Curtin University Associate Professor in the Department of Taxation Helen Hodgson said the bill would put unnecessary pressure on women, and could reduce work place reintegration and mental health.

“The original purpose was always for (PPL) to be complimentary to anything the employer was providing,” Dr Hodgson said.

“(Christian Porter) is wrong when he says PPL is about getting women back into the workforce, it’s a policy about health and well-being and allowing women the time to prepare to re-enter without the financial pressure.

“The best way to encourage a woman back is to support them… some evaluations say PPL topping up to 26 weeks gets women back into the workforce sooner.”

Tangney MP Ben Morton said changing the legislation was about equity.

“The Coalition policy makes paid parental leave more equitable and better targets taxpayers’ money to people who don’t receive paid parental leave from their employer, or who only have modest employer-provided arrangements,” he said.

He said only those with generous employer schemes – estimated to be 4 per cent – would lose out on a Federal supplement.

“Taxpayer funded paid parental leave for a parent without access to any employer scheme remains unchanged; they receive 18 weeks at the minimum wage, roughly $12,000,” he said.

Dr Hodgson rejected women were “double-dipping” and said people were asking the wrong questions.

“People seem to think women seeking PPL are getting more money than the already earn but that is not the case,” she said.

“The scheme is 18 weeks at minimum wage on the back of what an employee offers topping it up to 26 weeks off, it’s appropriate to refer to (PPL) as a supplement.”

Further, Dr Hodgson criticised the Government push to implement changes from January 1, which could affect women giving birth in less than two months.

“This bill refers to women who are currently pregnant and to talk about retrospectivity with regards to superannuation but not to this is absolute nonsense,” she said.

United Voice WA secretary Carolyn Smith said the cuts would put Australia further behind the global PPL standard.

“Australian women have one of the least generous paid parental leave schemes in the world, now the Liberal Government wants to make it worse by dramatically cutting 80,000 mothers’ rights to government funded paid parental leave,” she said.

“The reality, if this bill passes, is woman and families already doing it tough in this downturn economy of ours will be so much worse off… I feel most for the women who are currently pregnant and who are caught up in all of this.”

What is proposed?

At the moment, new parents are entitled to receive 18 weeks of government-funded paid parental leave at the minimum wage to supplement schemes offered by employers.

The 18 week supplement is taxed, and at the national minimum wage; currently about $670 a week.

The revised scheme would cut or reduce payments to women who receive maternity pay from their employer.

For example, today an employee entitled to eight weeks paid leave from their employer could access 18 weeks, taking their paid leave to 26 weeks, or six months.

Under the proposed legislation, titled Fairer Paid Parental Leave, the same woman would be entitled to claim 10 weeks to take her paid leave to 18 weeks, or four months.

The Federal Government, who aim to implement the changes from January 1, 2017, estimate the change would save $2 billion.

If passed, the scheme is predicted to affect around 80,000 women who would have their entitlement reduced or cut altogether.