Are babies' needs really at the centre of Paid Parental Leave?

Child Poverty Action Group (CPAG) are concerned that there are huge and growing gaps in how newborns are treated in NZ.

In 2012 and in 2015 CPAG submitted that the extension of Paid Parental Leave (PPL) be delayed until such time as there is adequate recognition of the needs of all newborns.

Those who hit the lucky jackpot of full paid parental leave currently get a massive $8326 net extra, paid for by the state. Under Labour’s extension this would rise to just over $12,000 net, regardless of a partner’s income.

Until 2016, only under half of all newborns got paid parental leave because of the stringent and unsuitable rules around the kind of paid work experience prior to the birth that's needed. Recent changes have liberalised the rules so that more mothers now qualify. This just means that the boundary has been shifted and the stakes are very high for those who just miss out.

To qualify for PPL, at least ten hours of work per week is required on average, for each of 26 weeks out of 52 prior to the birth.

Not all mothers get the full PPL. Once the hours of work requirement is met, PPL replaces gross income up to $516.85 a week with a minimum of $147.50. What this means is that a high income earner needs fewer hours to qualify for the maximum payment. This makes a mockery of a fixed 10 hours of work requirement and suggests that PPL is a fundamentally a compensation for lost income and not a payment to support newborns.

Ironically, it is not an employer payment and does not oblige the mother to go back to work and despite being state-paid, it is not income tested. The rhetoric used in the debate over PPL that all babies need to bond with their mothers and be breastfed for the best start in life is at odds with the design of PPL.

About 15,000 or 25% of mothers of newborns who do not get any PPL may get the Parental Tax Credit (PTC) of just $2200 as part of Working for Families (WfF) tax credits. This is income-tested and denied to any family on a benefit or student allowance.That leaves around 15,000 mothers of newborns who qualify for not a single $1 of extra support. These are often the most needy of all babies.

In the recent Parental Leave and Employment Protection (6 Months' Paid Leave) Amendment Bill debate, the Government used the CPAG submission to deny National’s support for this bill. CPAG believes this was a wilful misinterpretation of the submission was actually made. In fact what is needed is a complete overhaul of the mishmash of support for new babies. More money needs to be spent but it needs to be spent more equitably than simply extending the existing PPL to 26 weeks.

All state payments for children under the age of one, including childcare subsidies, the In Work Tax Credit, the Family Tax Credit, the Parental Tax Credit and Paid Parental Leave need to be combined into one payment to the caregiver.

To continue down the path of expansion of PPL perpetuates the growing inequality between mothers who have been in substantial paid work and those who receive income-tested benefits, child support, or who have been working at home to raise their families supported by a partner's income or have been involved in unpaid work.

CPAG says that all newborns have the right for their parents to be supported adequately to enable them to thrive.

ENDS

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