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Paid Parental Leave
From 1 July 2002, parents of children born or adopted on or after that date will be able to claim paid parental leave. Eligible claimants will be entitled to:
- Up to 12 weeks paid leave from employment;
- Up to $325 gross per week, or 100% of the claimant’s weekly earnings – whichever is lower.
Who Funds the Scheme?
Paid parental leave will be government funded with no direct cost to employers.
Who is Eligible?
The scheme will apply only to mothers of children born or adopted on or after 1 July 2002. In addition to this, claimants must have been in paid employment for a minimum of 10 hours per week for at least 12 months with the same employer.
Only the mother can claim paid parental leave, although payment can be transferred to her partner (including a same-sex partner), so long as that person is also eligible.
Options Under the Scheme
Claimants are not required to take the whole 12 weeks to which they are entitled. However, they will only receive payment for the leave that they take.
Claimants are not required to return to work after 12 weeks. The provisions of the Parental Leave and Employment Protection Act 1987 remain in force, whereby parents retain their entitlement to unpaid parental leave of up to 52 weeks.
Individual arrangements for paid parental leave between employers and employees are encouraged. However, any individual arrangements must include the new scheme’s requirements as the minimum statutory entitlements.
The Parental Tax Credit
The parental tax credit is financial assistance currently provided to eligible parents for the first 8 weeks after a child is born. Eligibility for this assistance is based on how many children the claimants have and the total family income. It is different to paid parental leave and will continue to be available. From 1 July 2002, parents who are eligible for both the parental tax credit and paid parental leave will have the option of claiming one or the other, but not both.
Policy behind the introduction of the paid parental leave scheme includes enabling lower income parents in New Zealand to take time off following the birth or adoption of a child. This promotes the health and well-being of mothers and their children and removes the financial pressures of unpaid parental leave.
Criticisms of the paid parental leave scheme include:
- It is not available to parents who work in a casual job or who are self-employed.
- Mothers must have worked for the same employer in the 12 months prior to giving birth.
The first review of the paid parental leave scheme has been set down for 2003. The scheme’s longer term funding options will be evaluated, as will possible extensions to entitlements.