What does the new ‘family package’ mean for employers? Importantly, how do working parents feel about it?

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The new childcare and parental leave initiatives have possibly been the most controversial and emotive of Budget 2015.

The Government’s intention is to encourage parents to do more paid work. Sounds good for the economy right? But is it really? And at what expense does it come to our children, working parents and employers?

[Hot news update: 34 leaders and 21 organisations have joined forces to ask government to abandon its proposed changes to PPL. Read more here. Updated: 22.5.2015]

First, a breakdown of the details…

  • A new single means-tested Child Care Subsidy set to begin on July 1, 2017
  • Families earning up to $65,000 will receive 85% of the childcare cost/child, or a designated benchmark price, whichever is lower. That will reduce to 50% for families with incomes of $170,000 and above.
  • Up to 100 hours of subsidised care/child/fortnight
  • New benchmarking of child care fees
  • New In-home Care (nannies) pilot scheme

Pros

  • The Child Care Subsidy is replacing a complicated system – the Child Care Benefit, Rebate and JET programs were difficult to understand.
  • There is no cap for families with an income below $185,000, those who earn beyond that will receive an increased cap of $10,000/child (up from $7,500)

Cons

  • 80,000 (or 47%[1]) new mothers will lose some or all of their parental leave payments with the minimum wage Paid Parental Leave (PPL) scheme being cut completely for those who can access maternity leave through work.
  • It fails to recognise the lack of childcare places – particularly in the under two’s which makes the Government’s Parental Leave cut all the more harsh.
  • There are no incentives in the policy to encourage organisations to offer more flexible work.
  • Family Tax Benefit Payments will stop entirely to single-income families when children turn six.
  • Stay-at-home parents with a household income of over $65,000 will lose all childcare subsidies
  • Increased emotional, financial and physical stress on mother and baby more likely for those not ready to return to work.[2] 
“The new subsidy might simplify the payment system, but it doesn’t comprehensively address issues of access to and quality of childcare, and is therefore unlikely to substantially change workforce participation of women” Lisa Annese, CEO, Diversity Council Australia[3]

The impact on employers

Currently, roughly 48% of organisations Australia wide offer Paid Parental Leave with an average of a 9-week duration for the primary carer.[4] The Workplace Gender Equality Agency (WGEA) offers an excellent Paid Parental Leave Tool for employers to find out what and how many other organisations within their industry currently offer.

At a time when there’s real progress being made by organisations around family friendly practices (thanks in huge part to WGEA initiatives) the new scheme doesn’t appear to support the momentum. Effectively, it puts the pressure on employers to provide strong PPL schemes that fill the gap left from the Government cuts.

The new scheme will also devalue any current employment conditions that were set by the employer and employee during contract negotiation as, in many cases, the government funded Parental leave would have been the starting point to work from or add to. “The scheme that was meant to set a minimum level of paid leave will in many workplaces end up setting the maximum.” [5] SMH paraphrasing Bill Shorten.

“I would really advise employers to continue to be generous with PPL. There’s an excellent business case for it, especially for women and encouraging them not be put off from taking maternity leave. I’d encourage employers to consider other forms of support for families, such as offering workplace flexibility as an enabler to balance work and family life,”   Lisa Annese, CEO of Diversity Council Australia speaking to HC Online. [6]

Read more on why we all need to support families with better Paid Parental Leave: Myth busting: Women, childcare & paid parental leave (particularly note the Canadian example).

The working parent’s viewpoint – why the angry face?

The SMH reported: “Social Services Minister Scott Morrison has said accessing both schemes [as the case currently is] is “double dipping” and “a rort”. Asked last week if it was “fraud” for mothers to collect both schemes, Mr Hockey said: “Well, it is”, but stopped short of using the word himself”.[7]

This obviously hasn’t gone down well with new parents across the nation. Many women negotiated in good faith with their employers an agreement based on the last government’s PPL scheme. But more to the point PPL was always designed to be a ‘top-up’ not a ‘double-dip’.

The current 18 weeks scheme was intended to be a base that employers could build on. Many parents negotiate on top of this base because that’s what they feel they need to make the transition back to work successfully – and the easier the return to work is for the mother the easier it is for everyone – baby, partner, colleagues and employer[8]. Financial stress and the stress of feeling forced to return quicker than they are ready is not good news for anyone.

“We are concerned that workforce participation objectives have been placed ahead of the interests of children. It is often the children whose parents aren’t working that benefit the most.”   Chief Executive, Samantha Page, Early Childhood Australia (Peak early childhood lobby group)

In their own words…

Here’s what working parents said when we asked them about the Government’s new Family Package.

It is a very sad day when you see tiny babies being handed over at daycare. Devastating for the mums and bubs. I have seen it first hand. How do you keep up breastfeeding?  How do you bond with your new baby?  When you only see it for a few days a week? It’s horrible. And the ‘double dipping’ comments are patently offensive and rude and completely counter intuitive to the original purpose of the PPL. In my case it (the PPL) allowed me to spend a full year at home with my daughter, breastfeeding and providing all the essential care needed by her in that very precious, vulnerable first year. After 12 months I personally was ready to go back to work and my daughter was ready for a few days of outside care – she loves daycare! It was a wonderful experience for both of us. All that aside, private entitlement negotiations with your employer should not be any business of the government. Ever. It is disgraceful that they are attempting to justify their meddling by these nasty comments, which make working mums out to be greedy money grabbers! The whole thing is off.” Carrie Grierson, Perth mother of a 2 year old and pregnant with twins. 

“Ok totally gender biased view but I sincerely feel the budget has been created by men who haven’t experienced the overwhelming and critical first year of a child’s life. The science proves for a child to be given the best possible chance of stability, attachment to a parent is required. Sending mothers back to work so soon isn’t going to help Australia’s future generations have the best possible start in life. I went back after 3 months slowly ramping each month and it was traumatic for both my daughter and me, and we had the luxury of a nanny but the mortgage had to be paid so no choice.” Victoria, mother of a 4 year old.

‪”The current PPL leave scheme was designed to complement whatever employers were offering so that mums could stay home with their bub’s. Australia is already behind many OECD countries with regards to PPL and for someone who claims that they are the Minister for Women, I shudder to think what his policies would be if he weren’t. I don’t think any mum wants to be a free loader or accused of being a double dipper. However if they are serious about supporting women and increasing participation rates taking away precious time with newborn, vulnerable babies is a terrible way to do it. Not to mention the lack of funding for all the new under 2 childcare places they’d need if all women suddenly had to go back to work at 3/4/5/6 months after giving birth. Exactly how are women going to be empowered to go back to work if there are a) no childcare places for their kids and b) no flexible, family friendly jobs for them to go back to? (I can’t see that it’s considered a choice of the only jobs available mean you are away from your baby for at least 10+hours a day, 5 days a week). Cindy, Sydney mum.

“The changes are completely unfair. My employer paid maternity leave is something that I have (collectively) bargained for. As part of that agreement I don’t get overtime and I have no ability to negotiate a pay rise – ever. It is an insult to refer to it as “double dipping.” Laura with two children under 2.

“I don’t think PPL is the issue, that’s a short term thing. I think the big issue is the utter failure of any government to legislate effectively regarding access to flexible work.” Anonymous mum.

“‪I too am a ‘double dipper’ being a teacher I received 14 weeks paid and the government leave as well. My daughter is now three and I am currently on maternity leave with my second. It is insulting as I know many would not be able to sustain being home if they only received the 14 weeks from the employer – if this was the case I’d be back at work within 4 months of giving birth. At least now with both payments I can stretch my time to almost 8 months bonding with my newborn. I use childcare but only for two days with my eldest and couldn’t afford more days. I’m lucky that I rely on semi retired parents to baby sit other days.” Anonymous mum.

‪”I am due in August with my first. I’m a double dipper, I saved up annual and long service leave to complement my work paid parental leave so I could have 6 months off (I get 14 weeks PPL from work). The 18 weeks government leave means I can actually take 10 months off work which I wouldn’t be able to do otherwise (it will be a tight period but I’m working on getting bills and rent all paid for that period well in advance for the decreased income). What it does mean is I probably won’t go for baby number two as I won’t have the long service leave to draw on, and 3 months at home before having to go back to work just isn’t fair on me or a newborn.” Jules Miller, new mum.

“I think extra funding to childcare instead of PPL, is a more useful use of Government’s resources. However, Government’s should legislate what companies pay as there is a huge disparity in the area.” Sydney mum.

“I’m an alleged ‘double dipper’ – I work for the government and get 18 weeks paid leave plus the paid parental leave – I am insulted that it is referred to as a ‘rort’ as I have simply claimed what was provided. Without the paid parental leave I would have to put my 6 month old baby in full time childcare, which is surely not the best option for the child.” Anna Flynn, Sydney mum.

“It’s very insulting that we are doing something that is legal and are being told we are double dipping. Imagine if negative gearing, which gives you massive tax breaks were abolished. I’m betting all the politicians would be arranging national protests because we’d be cutting their long term benefits.” Anonymous mum.

 


[1] HC Online Magazine, 80,000 mothers lose government funded paid parental leave, viewed 18.5.2015

[2] “Paid parental leave promotes long term health and economic benefits. The optimal period of time for a mother to be with a baby to achieve these benefits is 26 weeks; this is recognised by the World Health Organisation and the NHMRC. Anything that moves Australian mothers closer to being able to spend 26 weeks with their baby, moves us towards those health and economic benefits. That is why reducing the paid leave offered to 79,000 Australian women is an anathema.” Georgina Dent, Women’s Agenda, Myth busting Women, Childcare and Paid Parental Leave, viewed 18.11.2015

[4] WGEA, Paid Parental Leave, viewed 18.5.2015

[6] HC Online Magazine, 80,000 mothers lose government funded paid parental leave, viewed 18.5.2015

[8] Read more here for the research to back this up: Myth busting: Women, childcare & paid parental leave.

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