The federal government will add another two weeks to the current paid parental leave scheme as part of a series of compromises on stalled budget measures, but it will also push on with plans to prevent so-called “double dipping” by new parents.
The government will today introduce an “omnibus” bill of proposed changes to welfare payments in a bid to secure billions of dollars in budget savings through the Parliament.
According to the ABC, the bill will include an extension to the current government-funded paid parental leave scheme, from 18 weeks to 20 weeks.
However, the government is also proceeding with its paid parental leave reforms first announced in the 2015 federal budget.
Get business news first
Sign up to SmartCompany’s daily newsletter
The changes are intended to stop employees from accessing the full government-funded parental leave scheme at the same time as receiving parental leave entitlements paid for by their employer.
Currently, the government scheme provides approximately $12,000 to new parents, made up of 18 weeks of leave paid at the minimum wage for primary care givers that earn up to $150,000 a year.
Some parents can receive this full amount while also accessing paid parental leave from their employer if the organisation they work for has a scheme in place.
If the changes proceed, some families would lose access to the government-funded scheme entirely, while others will have their government entitlements reduced, with the Department of Human Services explaining that the changes would mean the government will pay parents the difference between their employer-funded leave and what they would be entitled to under the government scheme.
The proposed changes would not come into effect until nine months after legislation is passed so women who are already pregnant do not have their entitlements changed.
The omnibus bill will also reportedly include some concessions to the government’s proposed cuts to family tax benefits, which are intended to pay for increased funding for childcare services.
The government plans to abolish end-of-year supplements for Family Tax Benefits (FTB) Part A and will now increase fortnightly payments by $20 to compensate for the change.
According to news.com.au, the government will also not proceed with a plan to reduce FTB Part B payments for families when their youngest child turns 13.
With Labor opposed to the government’s plans, the Coalition will need the support of independents and minor parties in the Senate.
Social Services Minister Christian Porter told The Australian the “modified” paid parental leave policy is “designed to be fair, to deliver maximum advantage to the lowest income families who access paid parental leave in Australia, and of course, it has been designed to give the modified policy position the best chance of passage through the Senate”.
Meanwhile Treasurer Scott Morrison told the ABC on Tuesday the compromises are the result of negotiations with the Senate crossbench.
“We have to deal with the crossbench because the Labor Party isn’t serious about bringing the budget back to balance,” he said.
However, Senator Nick Xenophon said this morning that families losing access to some or all of the government-funded entitlements is “still a real issue” for his party.
“I understand something like 60 percent of women would be better off, but 40 percent wouldn’t be and some would be appreciably worse off. We will still keep talking to the government about this, but at this stage we are not convinced but we will still keep talking,” he told the ABC.
“What about the self-employed?”
Peter Strong, chief executive of the Council of Small Business of Australia, previously told SmartCompany the current paid parental leave arrangements tend to favour employees of large businesses and government departments.
Self-employed people “are rarely eligible for paid parental leave and rarely receive any payments”, says Strong.
“Those who work as an employee where there is no paid parental leave in their employment conditions only get the government payment,” he says.
“This happens nearly always in small and medium businesses which cannot afford the extra payment.”
Strong believes there is a risk that a “two-tier” system is created whereby there is a divide between those who work for big businesses and government, and those who either own their own business or are employed in a small or medium business.