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Valuing Parenthood - Part D

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Valuing Parenthood - Options for Paid Parental Leave: Interim Paper 2002

Part D: The Options - Who Pays and How

CHAPTER 10: Scope and coverage of paid maternity leave

10.1 Introduction

10.2 Payment to women versus payment to both men and women

10.3 Payment to natural parents versus payment to both natural and adoptive parents

10.4 Payment to all women versus payment to women in employment

CHAPTER 11: Structure of a paid maternity leave scheme

11.1 Introduction

11.2 Eligibility requirements

11.3 Duration of payment

11.4 Level of payment - fixed amount versus proportion of income

11.5 Funding source

CHAPTER 12: Options

12.1 Introduction

12.2 Option one: Employment based payment - government funded

12.3 Option two: Direct payment from employer to employee - employer funded

12.4 Option three: Universal payment - government funded

12.5 Option four: Social insurance/superannuation style system - jointly funded

12.6 Option five: Employer levy


CHAPTER 10: Scope and coverage of paid maternity leave

10.1 Introduction

The starting point for this paper was that paid maternity leave should be considered a work related entitlement for women. This assumption is discussed in this chapter and comments sought. However, the question remains as to whether paid maternity leave needs to be recast in some more fundamental way. In particular, this section considers who should be covered by a system directed towards supporting parents at the time of the addition of a new child to the family. The specific questions considered are whether payments should be available to men, adoptive parents and/or non-working mothers.

10.2 Payment to women versus payment to both men and women

As noted in Chapter 1, a presumption in favour of maternity leave has been used in this paper as a starting point for discussion. However, the decision on whether paid parental leave should be available to women only or both men and women is not clear cut or uncontested. To a large extent, any decision about the most appropriate recipients of paid leave depend on the objectives of the scheme.

10.2.1 Payment for women

Part C of this paper outlined a series of possible objectives and benefits as a result of providing women access to paid maternity leave. Of particular significance in determining whether payment should be made to women or to both men and women is the fact that a number of these objectives and benefits apply to women only, such as the health impacts of childbirth or the need to address discrimination against women in employment that results from their child-bearing role.

Arguably, a system for women only may compensate for and assist in addressing the unequal impact of children on men's and women's labour force participation. It is women's labour force participation that changes most significantly due to the presence of children or the likely presence of children. Where children under the age of four are present, women's labour force participation, during prime childbearing years drops to 51 per cent down from an average of 70.8 per cent. [186] For men, the presence of children has little or no impact on labour force participation. It is therefore women who are most likely to lose income as a result of having a child.

Special significance is afforded to maternity under international instruments, resulting in an emphasis on women's access to paid leave at the time of the birth of a child. CEDAW considers that access to paid maternity leave recognises the social significance of maternity and assists in ensuring that women are not discriminated against because of their child-bearing responsibilities. The ILO stresses the need to protect the health and welfare of the new mother and infant through access to paid maternity leave. [187]

In countries that do provide for parental leave, it is common to have a period of time exclusively set aside for women in recognition of the health impact of childbirth.

It should be noted that the provision of pregnancy and childbirth benefits exclusively to women, including paid maternity leave, does not infringe anti-discrimination laws. [188] This was most recently recognised by the New South Wales Industrial Relations Commission in deciding that the New South Wales Municipal Employees Union claim for maternity leave was not discriminatory. [189]

10.2.2 Payment for men and women

On the other hand, it is important that men are not dissuaded from participating in family life by limiting paid parental leave to mothers only. Allowing fathers time to bond with newborn children and facilitating their balancing of work and family responsibilities are also important.

A system which limits paid leave to women may further entrench women in their role as primary caregivers and the expectation that it is women who will take time out of the workforce to care for children. Further, to provide benefits only to mothers would not support men who are responsible for infants, for example adoptive fathers, those whose partners have died after the birth of the child or where the family elects to have the father be the primary carer. Making paid leave available to both men and women may foster a greater sharing of family and child caring responsibilities. Alternatively, as mentioned above, a period of maternity leave could be followed by a period of leave available to either parent.

The importance of men's participation in family life and the need to change traditional gender roles is acknowledged in CEDAW.

Bearing in mind the great contribution of women to the welfare of the family and to the development of society… but that the upbringing of children requires a sharing of responsibility between men and women and society as a whole.



Aware that a change in the traditional role of men as well as the role of women in society and in the family is needed to achieve full equality between men and women. [190]

Australian commentators have suggested that workplace and managerial cultures impede men's use of existing unpaid parental leave provisions. Income maintenance may assist in encouraging fathers to take time out of the workforce to care for children. [191]

The former Department of Employment, Workplace Relations and Small Business has suggested that men are less likely to take periods of unpaid leave, but appear relatively keen to use periods of paid parental leave. [192] This has been attributed to an unwillingness or inability to forego income, particularly where men's income is generally higher than women's. [193]

International evidence supports these arguments. A study of Swedish men taking parental leave found that the number of men taking paternity leave steadily rose from 1974 when it was introduced until 1995, at which point the number of men taking leave started to decline. Björnberg postulates that the reduction in men using paternity leave can be attributed to the drop in income replacement from 90 per cent to 75 per cent of previous earnings. [194] Another commentator argues that the decline related to the continued pay inequities between men and women, meaning that families 'choose' to have the lower income earner out of the workforce for the longer period of time. [195]


QUESTIONS

Q.27 Should a paid parental leave scheme provide payment to women or both men and women? Why?

10.3 Payment to natural parents versus payment to both natural and adoptive parents

While adoptive parents do not necessarily have to deal with the physiological side of giving birth, the health needs of a young baby and the bonding of the baby or child with his or her new parents remains important.

In 1999-2000 there were 566 adoptions of children in Australia. 159 were 'known' adoptions - where the child is adopted by step-parents, carers or other relatives. Some 71 per cent of known adoptions are of children over the age of five years (71 per cent) and 72 per cent of known adoptions are adoptions by step-parents. [196] Current unpaid adoption leave provisions do not provide entitlements to leave in these circumstances. [197]

Of the 407 placement adoptions, 83 per cent were of children under the age of five years, and would therefore be eligible for unpaid adoption leave, subject to other eligibility criteria.

The relatively small number of adoptions where leave is currently available suggests that a minimal additional cost would arise from extending a paid maternity leave scheme to include adoption. Paid adoption leave would result in employer benefits from retention and recruitment, as well as broader social and economic benefits.


QUESTIONS

Q.28 Should a paid maternity leave scheme provide payments to adoptive parents?
Q.29 If paid leave is made available to adoptive parents, should eligibility be limited to parents with adopted children of a particular age?

10.4 Payment to all women versus payment to women in employment

This paper has taken as a starting point that paid maternity leave is a payment relating to employment. However, paid maternity leave discussions necessarily raise social policy issues about how to best support women and families around childbirth.

A number of other countries provide the same level of payment to working and non-working women, however the payment comes from different sources. For example, in the United Kingdom, non-working women receive support through social assistance while working women receive payments through social insurance.

10.4.1 Extending maternity payments to all women

Those who argue that any maternity payment should be available to all women largely do so on equity grounds. The burden of additional costs at the birth of a child, and the need to ensure the health and wellbeing of mother and child applies to all families, and not just those where the mother is employed prior to the birth of a child. Similarly, if the payment is designed to recognise the social significance of maternity, then society should be contributing to the cost of all children, and not just those born to women employed prior to the birth of a child.

Extending maternity payments to all women would also ensure that coverage extends to women in casual employment, those working under contract or self-employed. These groups of women may otherwise be denied access to work entitlements that, in practice, are often limited to permanent employees.

It can be argued that limiting payments to women in employment will not just result in unequal treatment, but that it will actually exacerbate inequality within our society. In effect, it will target payments to high income earners, while the unemployed and social security recipients miss out. This is also an argument in favour of means-testing any system of maternity payments.

The Australian welfare system, which is a means-tested social security system, aims to target government support at those people who are most in need. The need to target government support and assistance has been used as a reason to argue against providing paid maternity leave to women with income from employment.

Prior to its decision to introduce paid maternity leave, the New Zealand Government had argued in similar terms when defending the lack of paid maternity leave in New Zealand to the United Nations Women's Anti-Discrimination Committee.

[I]t would be difficult to ask New Zealand's taxpayers to fund a programme that would benefit those already earning above-average salary. If such a programme was implemented, it should be for those earning less than a certain amount. Resources for strategic priorities such as health and education should not be redirected to maternity leave. [198]

10.4.2 Limiting maternity leave to women in employment

There are also arguments in favour of limiting paid maternity leave to women in employment, in particular in relation to workforce incentives, employment rights and the benefits to employers, the economy and government revenues of maintaining women's labour force attachment.

Limiting payments to those in employment can create workforce incentives for women to be employed prior to childbirth and to return to work following the birth of a child. As outlined in Section 7.5, maintaining workforce attachment can improve women's economic security, both in the short and longer term, by providing higher levels of income and allowing the build up of greater amounts of superannuation for retirement. Long periods out of the workforce can lead to the erosion of skills and to the potential for long term reliance on income support. In addition, in the not too distant future Australia's ageing population will place greater importance on ensuring maximum levels of workforce participation by those of workforce age in order to ensure the adequacy of the tax base.

Paid maternity leave for women in the workforce provides those women with a realistic choice between returning to work with a very young infant or remaining at home for at least the initial period. This is not a choice faced by women who are not in paid work.

Limiting paid maternity leave to women in employment also recognises the benefits to employers of maintaining women's labour force attachment. As outlined in Section 8.1, increasing women's likelihood to remain in employment up to the birth of a child and to return to work following the birth of a child represents an economic benefit to many employers, by increasing returns on investment in staff development and training and reducing costs associated with the recruitment and training of new staff. This benefit has led to a number of larger organisations in Australia introducing paid maternity leave.

ILO 183 and CEDAW both support the provision of paid maternity leave as a right of employment. CEDAW identifies paid maternity leave as a mechanism to 'prevent discrimination against women on the grounds of marriage or maternity and to ensure their effective right to work'. [199] The ILO considers paid maternity leave essential to ensuring 'equality of opportunity and treatment of women workers'. [200] Time out from the workforce is considered essential to maternal recovery, and hence should not lead to loss of income during this necessary break from the workforce.

As suggested in Section 9.3 of this paper, targeting payments to women in employment may also reduce some disincentives to childbirth and hence assist in raising Australia's fertility rate. Statistics show that it is women attached to the labour force who are less likely to have higher numbers of children and that women on higher incomes are also less likely to have any children. Loss of income and employment discrimination may be acting as a disincentive to childbirth for these women. By providing a degree of income replacement for lost earnings, paid maternity leave may influence a couple's or a woman's decision to have a family, when to begin that family and the size of that family.

This is not to suggest that government policy should give precedence to the needs of working women over those who leave the labour force to care for children. Women who are not in the labour force still require appropriate government support.


QUESTIONS

Q.30 Do you consider that there are stronger reasons for a work related entitlement or a universal payment? Why?

CHAPTER 11: Structure of a paid maternity leave scheme

11.1 Introduction

The focus of this paper has been on paid maternity leave as a work entitlement for women. While Chapter 10 of this paper raised the issue of whether there is a need to broaden the focus to include men and non-working women with newborn children, the concept of paid maternity leave as a work entitlement is returned to here as a means of focusing discussion.

This section outlines some of the parameters on which paid maternity leave, as a work-related entitlement for women, may be structured. It considers how the benefits and objectives of introducing paid maternity leave may be translated into an entitlement. Eligibility requirements, duration of payment, level of payment and funding source are all considered. The issues discussed in this section would also be relevant if a future scheme were to apply to men and non-working women.

11.2 Eligibility requirements

If paid maternity leave is limited to those in employment, a decision will need to be made as to what constitutes sufficient employment to qualify for paid maternity leave.

Current arrangements for unpaid maternity leave require 12 months employment with a single employer prior to taking leave. As discussed, leave is sometimes available to casual employees, but is not presently available to self-employed workers. [201] Applying this eligibility requirement to a paid maternity leave scheme would effectively limit the cost of providing this payment.

However, consideration should be given to whether a 12 month eligibility requirement for paid maternity leave is necessary or appropriate. Australia's trading partners generally do not require such an extensive period of employment to qualify for paid leave, even where this is funded by the employer. However, New Zealand does require a minimum 12 month period of paid work for qualification. [202]

Extending paid maternity leave to women with less than 12 months employment may create workforce incentives for these women. Women would be encouraged to remain in employment before childbirth in order to be eligible for the payment, and would not be forced to resign to allow for childbirth. Many of these women are likely to have marginal attachment to the labour force and are also at higher risk of becoming reliant on income support if they do leave the workforce. Alternatively, providing paid maternity leave only after 12 months may encourage some women, where they are able, to remain in employment or extend their employment and delay a decision to have a child so that they will be eligible for this form of maternity support.

Making paid maternity leave available to women with less than 12 months employment may also be important in eliminating workplace discrimination. Evidence from the National Inquiry into Pregnancy and Work noted that women who are pregnant and seeking to obtain employment suffer high levels of discrimination. [203] Discrimination may also arise from the failure to accommodate a reasonable period of leave where an employee has less than 12 months service. [204]

If paid maternity leave is to be a payment to women in the workforce, it may be desirable to have some minimum requirement for employment history, in order to establish that the person is genuinely employed. This may be particularly important if there is no equivalent payment to women who are not working.

The appropriateness of an eligibility requirement also depends upon the funding source. It would be unfair to employers in an employer funded scheme not to have a length of service eligibility requirement, while such a requirement may be unnecessary in a fully government funded scheme.

Eligibility for women in casual employment, working on contract and self-employed women would also need to be considered depending on the model of paid maternity leave adopted.


QUESTIONS

Q.31 Should eligibility for paid maternity leave be limited to women with a minimum length of employment? If so, what length of employment do you consider is appropriate? Would this need to be with a single employer?
Q.32 Do you consider that the same eligibility requirements should apply for both unpaid and paid maternity leave?

11.3 Duration of payment

The duration of paid maternity leave depends to a large extent on the objectives of the payment. For example, if ensuring the health and wellbeing of the mother and child following birth were the primary concern, 14 weeks of paid leave may be adequate. However, if increasing the fertility rate or significantly improving the long term attachment of women to the labour market is the desired outcome, a longer period of leave of one year or more and/or other family support measures may be required.

In differentiating between paid and unpaid maternity leave, a distinction can be made between the period of time required to ensure the health and wellbeing of the mother and child and a longer period to allow for the care of a young child.

Arguments in support of paid maternity leave that focus on ensuring the health and wellbeing of the mother and child suggest a leave period of 16 weeks after the birth of a child. [205] International labour standards have adopted 14 weeks (with at least six weeks after birth) as a minimum with a recommendation for longer leave where possible. [206]

Currently, employer funded paid leave arrangements average around four to six weeks, while in the Commonwealth public sector 12 weeks is paid. [207] Other comparable countries provide for a range of paid leave periods from two to six months. [208]

In European countries such as France, with fertility rates of just over one child per woman and facing rapid declines in population, significant amounts of government funding have been allocated to paid maternity leave for periods of up to six months on full pay. [209]


QUESTIONS

Q.33 For how many weeks should paid maternity leave be available?
Q.34 Should the duration of paid maternity leave be extended in special circumstances, such as illness of the mother or child?

11.4 Level of payment - fixed amount versus proportion of income

In part, the level of payment may depend on the structure of any paid maternity leave scheme. Most of Australia's trading partners have tended to adopt models that involve a form of employer payment or insurance payment based on previous earnings. Similarly, most workplace based employer-funded paid maternity leave schemes currently operating in Australia provide payment based on previous earnings. This squarely links paid maternity leave to maintaining financial support for the period of time a woman is absent from the workplace because of having and raising children. Setting paid maternity leave as a proportion of previous earnings also better equates to income replacement.

Under a capped or flat-rate government funded or contributory scheme, the link between previous income and any paid maternity leave payment becomes less clear. In these cases, a flat-rate payment may be preferred to avoid creating significant disparity between high and low income earners, and potentially those without previous earnings.

ILO 183 states that paid maternity leave benefits, where 'based on previous earnings … shall not be less than two-thirds of the woman's previous earnings or of such of those earnings as are taken into account for the purpose of computing benefits', [210] or a comparable amount to the average result of this calculation. [211]

Options raised in consultations include

  • unemployment benefits or parenting payment;
  • the federal minimum award wage;
  • average weekly earnings or a proportion of it;
  • women's average weekly earnings or a proportion of it; and
  • an individual woman's full pay or a proportion of it.

QUESTIONS

Q.35 Do you consider that paid maternity leave should be paid as a fixed amount or a proportion of income? Why?
Q.36 If paid maternity leave were to be a fixed amount what should that amount be? For example: unemployment benefits or parenting payment; the federal minimum award wage; average weekly earnings or a proportion of it; women's average weekly earnings or a proportion of it; or an individual's full pay or a proportion of it.
Q.37 If paid maternity leave were to be a proportion of income, what proportion should it be and should there be a cap or maximum rate for payments?

11.5 Funding source

As noted in Chapter 1, a system of paid maternity leave may be funded by government, employers, employees or a combination of each. There is significant diversity internationally with regard to the funding of paid maternity leave.

Arguments in favour of employers funding or contributing to paid maternity leave relate to the direct economic benefits to many employers that result from such a system. Recruitment and training costs may be reduced, employee retention rates may increase and the employer may achieve a business advantage through becoming a preferred employer. This is discussed in detail at Chapter 8.

These direct benefits suggest that individual employers should be responsible for funding paid maternity leave. However, this may result in discrimination in relation to the employment of women, with employers refusing to employ women of child bearing age in order to avoid these costs. [212] In addition, not all employers will gain the same economic benefits from paid maternity leave. In this case, a system which shares the cost across all employers, such as a levy, may be preferred. It would also be possible to exempt certain businesses, such as those with less than 20 employees, from paying the levy if it were considered that such businesses could not afford this expense.

Chapter 9 details the social benefits of a paid maternity leave system. These include economic growth, return on the investment in women's education and training, improved taxation revenues and reduced retirement welfare expenditure, supporting childbirth as a social good, and increasing Australia's fertility rate. These arguments support a system of government funding and/or contributions from across all employees.

The alternative to some form of paid maternity leave is a system of self-provision, as applies currently for most families in Australia. In this case, the argument is that it is women and families who benefit from having children and who should bear the total cost.


QUESTIONS

Q. 38 How do you consider paid maternity leave should be funded? Why?
Q.39 Do you consider that there is a stronger case for funding by government, employers or employees? If so, why? Would a form of combined funding work effectively? How?
Q.40 If employers were to contribute to paid maternity leave, do you think this funding should be provided by individual employers or be spread across all employers?
Q.41 If employers were to contribute to paid maternity leave, should there be any exemptions for certain types of employers (eg. those with less than 20 employees)?

CHAPTER 12: Options

12.1 Introduction

This chapter presents a sample of possible options for paid maternity leave. The options presented are not intended to limit alternative proposals, but are offered as a means for generating discussion. Submissions are welcome on every aspect of these options for paid maternity leave and alternative proposals.

This section sets out five possible models for providing paid maternity leave.

  • A government funded employment based payment
  • An individual employer funded payment
  • A government funded universal payment
  • A social insurance/superannuation style system
  • An employer levy

An outline of possible structure, advantages and disadvantages are given for each of the options.

Other options that were raised in consultations with the Sex Discrimination Commissioner include

  • continuing the current system of self-funded maternity leave and ad hoc individual workplace paid leave provisions;
  • employees and/or employers to contribute to a portable insurance scheme to fund a period of paid maternity leave;
  • removal of the means test on the Maternity Allowance and possible increase of the amount of the payment;
  • a special levy on all taxpayers to fund paid maternity leave, along the lines of the Medicare levy;
  • government to pay a base amount, with employers required to top up this payment to a proportion of previous earnings;
  • an employee entitlements model that required business to pay an insurance levy to cover paid maternity leave;
  • individual income insurance to provide income replacement during periods of maternity leave;
  • tax concessions for employers that provide paid maternity leave;
  • employees to be given the choice of signing up for either long service leave or paid maternity leave at the beginning of their contract with an employer;
  • a system of purchased leave, whereby employees can opt to have a proportion of their salary set aside which will then be paid during the period of maternity leave; and
  • an employer funded payment to women in employment, with a corresponding government payment to women who are not in employment.

The purpose of this section is to focus discussion on how a paid maternity leave system could be structured, should Australia choose to introduce such a system. The final options paper will include more detailed analysis, drawing on the feedback received on this interim paper.

12.2 Option one: Employment based payment - government funded

12.2.1 Structure of payment

Flat rate of payment to either

  • women on unpaid maternity leave;
  • women who have had 12 months continuous employment with any number of employers prior to the birth of a child;
  • women who have had 12 months continuous employment with a single employer prior to the birth of a child; or
  • women in employment prior to the birth of a child.

The payment could be

  • paid directly from the government to women through the tax or social security system; or
  • paid by employers to women and then reimbursed to employers by government.

Employers would be encouraged to provide incentives for women to return to work after maternity leave. This may be done by employers providing a top-up payment to the level of a woman's actual earnings (as per Option Two).

12.2.2 Advantages

A government funded, employment based payment would

  • ensure the health and wellbeing of mothers and babies by allowing a financially secure period of time out of the workforce;
  • recognise paid maternity leave as a workplace issue;
  • create workforce incentives for women to be employed prior to childbirth and to return to work following the birth of a child;
  • provide a degree of income replacement for lost earnings;
  • recognise the social significance of maternity;
  • reduce disincentives to the employment of women that may arise if employers were required to directly fund paid maternity leave; and
  • limit the cost to government compared to a universal payment.
12.2.3 Disadvantages

Disadvantages of a government funded, employment based payment include

  • the potential to create an imbalance between those women in and out of the workforce;
  • possible cost-shifting to government by employers that currently provide paid maternity leave;
  • limited recognition of the increased costs faced by all families at the birth of a child, and not just those in the workforce;
  • limited recognition of the benefits to employers of maintaining women's labour force attachment;
  • the possibility of increased administration costs to employers if they are expected to make payments and then seek reimbursement from government; and
  • increased costs to government compared to the status quo or an employer funded model.

12.3 Option two: Direct payment from employer to employee - employer funded

12.3.1 Structure of payment

Employers would be required by legislation to provide paid maternity leave to eligible female employees.

The payment would be paid directly by the employer to women who have had 12 months continuous employment with the current employer prior to the birth of a child.

Payment could be

  • a mandated percentage of previous earnings; or
  • a flat-rate of between two-thirds and 100 per cent of average weekly earnings.

Alternatively, this could operate in conjunction with Option One or Option Three as a top-up payment for women with above average weekly earnings, and could then be mandatory or optional.

12.3.2 Advantages

An employer funded model would

  • recognise the benefits to employers of maintaining women's labour force attachment;
  • create workforce incentives for women to be employed prior to childbirth and to return to work following the birth of a child;
  • ensure the health and wellbeing of mothers and babies by allowing a financially secure period of time out of the workforce;
  • provide a degree of income replacement for lost earnings;
  • recognise paid maternity leave as workplace issue; and
  • have no cost (or minimal cost for regulation) to government.
12.3.3 Disadvantages

Disadvantages of an employer funded model include

  • the potential to create an imbalance between those women in and out of the workforce;
  • possible difficulties for low profit businesses and small businesses in bearing increased costs;
  • the creation of disincentives to employ women;
  • the cost would have an uneven impact on particular industries;
  • limited recognition of the social significance of maternity, as the direct cost is borne by the employer and not wider society; and
  • limited recognition of the increased costs faced by all families at the birth of a child, and not just those in the workforce.

12.4 Option three: Universal payment - government funded

12.4.1 Structure of payment

The payment would be paid through the social security system, and would consist of two parts

  • a non-means tested payment to women in work at the time of birth (with no minimum length of employment required for eligibility); and
  • a maternity assistance payment to women who are unemployed or not in the labour force at the time of birth (this could be a top-up payment or temporary replacement payment for those women in receipt of income support payments).

Employers would be encouraged to provide incentives for women to return to work after maternity leave. This may be done by employers providing a top-up payment to the level of a woman's actual earnings (as per Option Two).

12.4.2 Advantages

A universal payment would

  • assist in covering the increased costs faced by parents at the time of childbirth;
  • maintain equity between those in and out of the workforce;
  • maintain equity between those with different lengths and types of employment;
  • recognise the social significance of maternity;
  • ensure the health and wellbeing of mothers and babies by allowing a financially secure period of time out of the workforce;
  • ensure that women who are in casual employment, working on contract or self-employed have access to the payment;
  • be relatively administratively simple; and
  • reduce disincentives to the employment of women that may arise if employers were required to directly fund paid maternity leave.
12.4.3 Disadvantages

Disadvantages of a universal payment include

  • possible cost-shifting to government by employers that currently provide paid maternity leave;
  • limitation of workforce incentives that would be provided by limiting paid maternity leave to those in employment;
  • limited recognition of the benefits to employers of maintaining women's labour force attachment; and
  • increased cost to government.

12.5 Option four: Social insurance/superannuation style system - jointly funded

12.5.1 Structure of payment

Contributions would be made to a maternity leave fund which would be used to pay for paid maternity leave. Contributions could come from employers, employees and government.

Employer contributions could be based on total salaries paid by the organisation, in order to avoid disincentives to employ women.

The payment would be paid by the fund to eligible women.

Paid maternity leave payments could be either

  • a flat rate;
  • based on previous earnings; or
  • based on previous contributions.
12.5.2 Advantages

A social insurance/superannuation style payment would

  • recognise the benefits to employers of maintaining women's labour force attachment;
  • create direct workforce incentives for women to be employed prior to childbirth and to return to work following the birth of a child;
  • recognise the social significance of maternity;
  • provide a degree of income replacement for lost earnings;
  • ensure the health and wellbeing of mothers and babies by allowing a financially secure period of time out of the workforce;
  • recognise paid maternity leave as workplace issue;
  • spread the cost between employers, employees and government; and
  • reduce disincentives to the employment of women that may arise if employers were required to directly fund paid maternity leave.
12.5.3 Disadvantages

Disadvantages of a social insurance/superannuation style payment include

  • the potential to create an imbalance between those women in and out of the workforce;
  • the payment is in effect a new tax, in part paid by all employers and in part by all employees;
  • possible difficulties for low profit businesses in bearing increased costs;
  • potential for some working women (especially part time and casual employees) to miss out if they have not made sufficient contributions to the fund;
  • limited recognition of the increased costs faced by all families at the birth of a child, and not just those in the workforce;
  • potential for significant administrative costs in establishing and maintaining the system; and
  • potential for significant government spending, particularly in the early years, to cover any shortfalls in funding.

12.6 Option five: Employer levy

12.6.1 Structure of payment

Employers would be required to pay a levy based on total salaries paid by the organisation, in order to avoid disincentives to employ women. Small businesses, for example those with less than 20 employees, could possibly be exempted from the levy.

The levy payments could be administered by government or an independent authority, and would be used to pay for paid maternity leave.

The payment would be paid by the levy administrator to eligible women.

Paid maternity leave payments could be either

  • a flat rate; or
  • based on previous earnings.
12.6.2 Advantages

An employer levy would

  • recognise the benefits to employers of maintaining women's labour force attachment;
  • create direct workforce incentives for women to be employed prior to childbirth and to return to work following the birth of a child;
  • provide a degree of income replacement for lost earnings;
  • ensure the health and wellbeing of mothers and babies by allowing a financially secure period of time out of the workforce;
  • recognise paid maternity leave as workplace issue; and
  • reduce disincentives to the employment of women that may arise if employers were required to directly fund paid maternity leave.
12.6.3 Disadvantages

Disadvantages of an employer levy include

  • the potential to create an imbalance between those women in and out of the workforce;
  • the payment is in effect a new tax, paid by all employers;
  • possible difficulties for low profit businesses in bearing increased costs;
  • limited recognition of the increased costs faced by all families at the birth of a child, and not just those in the workforce;
  • limited recognition of the social significance of maternity, as the direct cost is borne by the employer and not wider society; and
  • potential for significant administrative costs in establishing and maintaining the system.

QUESTIONS

Q.42 Who should be responsible for funding paid maternity leave?
Q.43 Do you support a particular option or model for a paid maternity leave scheme?
Q.44 Do you have any information relevant to costing these models?

186. ABS 6203.0 Labour Force Australia August 2001, 26.

187. See Section 7.2.1.

188. See for example s 31 Sex Discrimination Act 1984 (Cth); s 35 Anti-Discrimination Act 1977 (NSW); s 46 Equal Opportunity Act 1984 (SA); s 28 Equal Opportunity Act 1984 (WA); s 37 Discrimination Act 1991 (ACT); s 54 Anti Discrimination Act 1992 (NT); may be covered by s 24 Anti Discrimination Act 1988 (Tas); s 82(2) Equal Opportunity Act 1995 (Vic).

189. Local Government (State) Award 2001 [2001] NSWIRComm 281, per Schmidt J.

190. Preamble Convention on the Elimination of All Forms of Discrimination Against Women GA Res 180 (XXXIV 1970) 19 ILM 33 (1980).

191. John Buchanan and Louise Thornthwaite Paid Work and Parenting: Charting a new course for Australian families Chifley Research Foundation University of Sydney Sydney 2001, 24.

192. Department of Workplace Relations and Small Business "Working fathers and working mothers - Do their needs differ?" (1998) 17 Work and Family Insert No. 17.

193. Department of Workplace Relations and Small Business "Working fathers and working mothers - Do their needs differ?" (1998) 17 Work and Family Insert No. 17; John Buchanan and Louise Thornthwaite Paid Work and Parenting: Charting a new course for Australian families Chifley Research Foundation University of Sydney Sydney 2001, 13.

194. Ulla Björnberg "Equity and backlash: Family, gender and social policy in Sweden" in Linda L Haas, Philip Hwang and Graeme Russell (eds) Organizational Change and Gender Equity Sage Publications California 2000, 57-76 at 61.

195. Linda L Haas and Philip Hwang "Programs and policies promoting women's economic equality and men's sharing of childcare in Sweden" in Linda L Haas, Philip Hwang and Graeme Russell (eds) Organizational Change and Gender Equity Sage Publications California 2000, 133 - 161 at 146.

196. Australian Institute of Health and Welfare Adoptions Australia 1999-00 (Child Welfare Series no. 26) Australian Institute of Health and Welfare Canberra 2001, 3.

197. reg 30H(2) Workplace Relations Regulations 1996 (Cth).

198. United Nations Women's Anti-Discrimination Committee Legislative Measures Needed to Erase Gender Disparities in New Zealand Committee Experts Say Press Release WOM/1072 8 July 1998, 6.

199. art 11(2). See further discussion at Section 3.2.

200. See discussion at Section 3.2.

201. See discussion at Section 2.3.1.

202. See discussion at Section 4.2.

203. Human Rights and Equal Opportunity Commission Pregnant and Productive: It's a right not a privilege to work while pregnant HREOC Sydney 2001, 161-162.

204. Human Rights and Equal Opportunity Commission Pregnant and Productive: It's a Right not a Privilege to Work While Pregnant HREOC Sydney 2001, 144-145.

205. World Health Organization "Health aspects of maternity leave and maternity protection as discussed in a statement to the International Labour Conference 2 June 2000": www.who.int/reproductive-health/publicatins/French_FPP_93_3/Health_aspe…

206. See discussion at Section 3.2.

207. See discussion in Section 2.3.

208. See the table in Appendix B.

209. France provides 26 weeks of paid maternity leave in respect of the third and later children.

210. art 6(3) ILO 183 .

211. art 6(4) ILO 183.

212. See discussion above at Chapter 6.