Paid parental leave increases parents' choices
New Zealand's paid parental leave scheme has wide uptake from parents and support from employers.
A new evaluation of New Zealand's paid parental leave scheme shows it enjoys wide take-up by parents and support from
employers, says Labour Minister Ruth Dyson.
"The Department of Labour's evaluation, which looks at the drivers behind parents' decision-making around how they take
parental leave, shows the leave is taken up by 80 per cent of eligible women.
"Last year's extension of eligibility to self-employed parents means paid parental leave is now available to nearly 90
per cent of all women in paid work.
"New parents agree that accessing paid parental leave lessens money worries around the time of their child's birth or
adoption - so they can concentrate more on their family commitments.
"In today's labour market environment, where over 60 per cent of women participate in paid work, paid parental leave
provides essential support for new parents. We are also seeing more flexibility around working arrangements, rather than
the traditional 'nine to five', particularly for mothers returning after the birth of a child," said Ruth Dyson.
"The evaluation has found employers are also supportive of paid parental leave. An overwhelming 90 per cent of mothers
said their employers supported their decision to take the leave and two thirds of employers surveyed agreed the scheme
allows them to plan and manage workloads with greater confidence.
While few fathers use the parental leave provisions available to them and instead used other forms of leave, many said
they would like to take more time off work to share more in the care of their new babies and their partners.
"It's a priority for the Labour Government to ensure paid parental leave can be accessed by even more working parents -
no matter what their working arrangements. These findings will contribute to the ongoing review and improvement of the
scheme."
The evaluation report is available from the Department of Labour's website
Paid parental leave evaluation Questions and Answers
Note: this research was carried out prior to paid parental leave eligibility being extended to self-employed women in
July 2006. Therefore, the report's statistics on women ineligible for leave are higher than they would be today.
How does New Zealand's entitlements to paid parental leave compare to other countries?
A number of countries provide statutory paid maternity leave.
These range from Australia - which provides a 'baby bonus' but no paid leave period - to countries which stand out
internationally through offering paid maternity leave from 30 to 64 weeks, as well as paid paternity leave (Norway,
Sweden, Denmark and Finland). The leave's duration is usually between 14 and 20 weeks, with a high level of
earnings-related payment (that is, at a level greater than 50% of earnings).
How long has New Zealand had paid parental leave for?
In 2002, the Labour-led government introduced paid parental leave to New Zealand for the first time. Since that time, it
has been extended in length, eligibility and payment:
· The initial entitlement was payment for 12 weeks at a maximum rate of $325 per week for employees who had been with
their employer for a minimum of 12 months.
· Duration of leave was extended progressively - to 14 weeks in December 2005
· The leave was extended to parents with six months eligible employment in December 2004, and to self-employed parents
in July 2006
· The maximum payment under the scheme is reviewed annually, and is currently $372.12 per week.
Will paid parental leave be increased from 14 weeks or extended to more women?
Our government recognises that the time around the birth or adoption of a child is important for both parents and
children. In August last year, the Prime Minister launched the Choices for Living, Caring and Working Plan of Action - a
ten year plan of action to enhance caring and employment choices over the next decade.
This plan includes work on improving parental leave provisions to better support parents wanting to care for their
children in their first year of life while taking a break from paid work.
Work is currently underway to consider how paid and unpaid parental leave can be made available to more people. This
includes looking at the circumstances of casual, seasonal, and part-time employees, as well as those currently
ineligible for the scheme.
How is the rate for paid parental leave calculated?
Paid parental leave aims to reduce financial pressure on women and their families while they adjust to their new child.
The scheme recognises the financial impact on families when a parent stops work for a period of leave.
Parental leave payments fully replace a person's earnings up to a cap, which currently stands at $372.12 per week before
tax. This is adjusted annually to remain on par with average weekly earnings (as measured by the Quarterly Employment
Survey).
Who pays for parental leave? Is it employers?
No, Paid Parental Leave is paid for by the government out of your taxes. The scheme is administered by the Inland
Revenue Department, not by employers.
Very few fathers are using the unpaid paternity leave - they are using annual leave instead. Is paid parental leave for
fathers required?
Work by the Department of Labour is currently underway to look at how the provision of paid and unpaid parental leave
can be improved to better support parents. Options for paid leave for fathers will be considered as a part of that work.
What was the overall cost of the evaluation?
The total cost of the evaluation was $253,530 (all costs exclude GST).
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