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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.