Ahead of the release of the federal budget tomorrow, the federal government has announced it will move to prevent so-called “double-dipping” for workers who claim both public and employer paid parental leave payments, including many public servants.
The change will save around $1 billion over four years, according to Treasurer Joe Hockey, and will potentially see the entitlements of thousands of public servants cut.
In 2013-14, 553 Department of Human Services employees took 14 weeks maternity leave at full pay, 1052 at half-pay, and 1314 were on leave without pay, says The Australian, costing the department $18.7 million.
1110 DHS staff took both parental leave payments from both the department and the national scheme.
The current public paid parental leave scheme is means-tested, giving 18 weeks of entitlements at the minimum wage to those earning $150,000 per year or less. It was created by Labor in 2011.
“We are going to stop that … You cannot get both parental leave from your employer and from taxpayers,” said Hockey on Sunday.
“For people on the minimum wage they will still get $11,500 for the 18-weeks that they’re off on parental leave but people will not be able to claim it both from their employer and from the taxpayers,” Hockey stated.
47% of eligible mothers are expected to be worse off under the changes, according to figures from a government statement in the Sydney Morning Herald. Around 27%, or 45,000 women a year, will be able to access a part-payment, as they receive some money from their employer, but less than the government scheme.
Around 20% of mothers, around 34,000 women, will lose government payments entirely. More than 50% of mothers will be unaffected, as they do not receive employer benefits. When contacted, the offices of both Treasurer Joe Hockey and Social Services Minister Scott Morrison said they had not released those figures.
Since 2011, all federal public service work agreements provide at least 14 weeks of maternity leave and at least 14 weeks of adoption and foster carer’s leave. Before that bargaining round, there was significant variation in these conditions between agencies, with some agency enterprise agreements only including the 12 weeks of maternity leave.
A report for the Department of Social Services found the current paid parental leave regime was achieving its goal of allowing mothers to stay home for longer, but also helped increase long-term retention rates of mothers who took maternity leave.
The University of Sydney’s Professor Marian Baird, who was a member of the panel reviewing the scheme, said the change was “a complete turnaround from the rolled-gold PPL scheme of a few months ago,” adding that many public servants are now “going to lose $11,500 immediately.”
Far from being a “loophole”, as government figures are calling it, the system of allowing employees to access both public and workplace entitlements was the basis of the current system, said Baird, allowing both private and public sector employees to reach the 26 weeks’ paid leave recommended by the World Health Organisation.
Baird said that because the entitlement to paid maternity leave was originally introduced under Whitlam in 1973, it had not been subject to a great deal of public sector enterprise bargain negotiation, other than over extending entitlements from 12 to 14 weeks.
This new proposal may, however, mean parental leave does become a point of contention in negotiations, Baird told The Mandarin, as reduced public entitlements may see unions push employers to stretch workplace entitlements to 18 weeks.
“I don’t think they consulted anyone,” she argued. “I think unions and employees will push to have it pushed up to 18 weeks. It’ll become a bargaining point.”
Prime Minister Tony Abbott said he wanted to stress the budget would be “about fairness”.
“If you’ve got a generous employer provided scheme, that’s what you should get,” said Abbott.
“If you don’t have any employer-provided scheme, you’ve got the government’s scheme — which has been in place now for several years — and if the employer-provided scheme doesn’t give you as much as the government scheme, well then you’ll be topped up.”
Asked whether there were any plans to improve the government scheme, Abbott responded: “Well not in this budget and we don’t have any plans to. … for a whole host of reasons we decided that the time was not right for the fullness of the policy that we took to the last election.”
The Community and Public Sector Union declined to comment.