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May 18 2011

Maternity Pay in Australia

Maternity Pay in Australia

January 2011 Paid Parental Leave – Maternity Pay implementation

Australia’s first national Paid Parental Leave scheme started on 1 January 2011.

This Parental leave is for eligible working parents of children born or adopted on or after 1 January 2011.
It is paid for up to 18 weeks at the National Minimum Wage – currently $569.90 a week before tax (2010)

Claimants must be Australian residents with an income of under $150,000 per year.

Claimants must have worked for at least 10 of the 13 months prior to the birth of the child.

Note: You cannot receive Parental Leave Pay and a Baby Bonus payment for the same child.

More at: Paid Paternity Leave in Australia

2011 Proposed Maternity Leave

From 2011, it is proposed that the Federal Government will pay Maternity Leave for 18 weeks at $543pw, totalling $9,774.

However, recipients of this would NOT receive the current Maternity/Baby Bonus, nor would they receive any FTB payments during the time that they are taking such leave.

There will be cases where it will be more beneficial for the parent to choose NOT to get the Paid Paternity Leave, as the loss of the tax free Baby Bonus and Family Tax Benefits, may be greater than the after tax benefit of the Parental leave.

Compulsory Maternity Leave pre 2011

There is a requirement to provide 52 weeks unpaid maternity leave to the primary care giver.

There is currently NO Compulsory requirement to provide Paid Maternity Leave

There is however, a federal government funded Maternity Payment of $$5,294 paid per child, which is the equivalent to 18 weeks at $294 per week, tax free. There is also the Family Tax Benefit part B, also tax free and per child, at a rate of up to about $68 per week. This totals $362 pw tax free, or the equivalent of about $529 pw before tax at the 30% tax bracket.

Some companies do provide paid maternity leave, although these are mainly large companies, or companies that provide extra benefits for valued employees.

Paid Maternity Leave

In a survey done in October 2007 the following results were found:

  • 45.4% of women said they were entitled to paid Maternity Leave
  • 39.3% of women said they were not entitled
  • 15.3% of women were unaware of what maternity leave they were entitled to

The survey was carried out by the Australian Bureau of Statistics, and the PDF report is here:

www.ausstats.abs.gov.au…202007.pdf

In 2002 this figure was 39 per cent of female employees in Australia being able take an average of seven weeks paid maternity leave, up from 28 per cent in 1997

Update April 2008
The Labor Government has asked the Productivity Commission to examine the implications of maternity leave for Australian Workers, to examine the effectiveness of different models of support for parents.

March 2008
The retail chain Myer, is quoted as being the first big Australian retailer to grant six weeks paid parental leave. This is conditional on having been employed for 18 months either part time or full time. IKEA has been offering this for the last 5 years. The David Jones retail stores currently offers two years unpaid maternity leave.

An indication of Maternity Leave rules is available at http://www.industrialrelations.nsw.gov.au/rights/entitlements/parental.htmlNote that this is specifically for NSW. I think that most States will be similar.

Two Pieces of Statistical information from this report at the Federal Government Library:
http://www.aph.gov.au/library/intguide/ECON/maternity_leave.htm

Report 1:

  • Dr Barbara Pocock estimates that 39 per cent of female employees have access to paid maternity leave of some form (about 7 weeks on average):
  • 39 per cent of female employees in Australia can take an average of seven weeks paid maternity leave, up from 28 per cent in 1997.
  • Although 77 per cent of women in the finance and insurance industries have access to paid maternity leave, only one per cent are covered in the retail sector, and 2 percent in hotels and restaurants.
  • Among developed countries, only the US and Australia have not legislated for minimum paid maternity leave across the workforce.

Report 2:

  • 38 per cent of female employees responded that they were entitled to paid maternity leave (51 per cent of full time employees and 21 per cent of part time employees)
  • women in casual employment had almost negligible access to paid maternity leave (0.4 per cent of self-identified casuals responded that they were entitled to paid maternity leave, compared to 53.6 per cent of other female employees)
  • the highest coverage of paid maternity leave (percent of female employees) occurred in the following industries: Government Administration and Defence (68.1 per cent), Communication Services (59.1 per cent), Finance and Insurance (59 per cent) and Education (57 per cent )
  • the lowest coverage of paid maternity leave was found in the following industries: Agriculture (4.5 per cent), Accommodation, Cafes and Restaurants (13.4 per cent), Retail (20.2 per cent of female employees) and Cultural and Recreational Services (28.2 per cent)
  • the highest incidence of paid maternity leave was recorded in the following occupations: Managers and Administrators (65 per cent) and Professionals (54 per cent)
  • the lowest incidence of paid maternity leave was recorded in the following occupations: Elementary Clerical, Sales and Service Workers (18 per cent) and labourers and related workers (21 per cent) and access to paid maternity leave was higher the greater an employees length of service with an employer.

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