2.1
This chapter considers evidence received from submitters and witnesses regarding the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 (the bill).
2.2
Broadly speaking, inquiry participants were supportive of the bill and its overarching intention to make Australia’s Paid Parental Leave scheme (the scheme) more accessible, flexible and gender neutral.
2.3
However, some argued that the reforms do not go far enough and called for further amendments to bring the scheme up to international standards. Other key issues raised as part this inquiry included:
the expansion of the scheme;
the reserved ‘use it or lose it’ period;
increasing scheme flexibility;
transitional arrangements; and
2.4
This chapter will outline the views on the bill and conclude with the committee’s view and recommendation on the bill.
Overarching views on the bill
2.5
The Department of Social Services (the department) submitted that the bill is designed to:
expand access to the scheme, including for families where the birth parent is the higher earner and for residentially qualified fathers and partners;
encourage fathers and partners to take time off work after a birth or adoption to promote shared care and gender equality; and
provide greater flexibility in how families can use their paid parental leave.
2.6
The Northern Territory Working Women’s Centre (NTWWC) indicated that the amendments will ‘significantly’ assist women, men and families in finding a balance between employment and family obligations.
2.7
Women’s Legal Services Australia (WLSA) commended the government for its commitment to women's social, economic and gender equality and expressed its support for the proposed reforms:
WLSA supports the [Paid Parental Leave] Amendment Bill because the changes will make the Scheme more flexible, accessible and supportive of gender equality, women’s participation in the workforce and shared parenting.
2.8
The Australian Chamber of Commerce and Industry (ACCI) outlined how the reforms may benefit the broader Australian economy:
These changes should deliver significant benefits to the economy by boosting women’s workforce participation, improving flexibility in the use of paid parental leave, enhancing gender equity outcomes, and ensuring businesses continue to have access to a diverse, experienced productive labour force.
International comparisons
2.9
The Australian Human Rights Commission (AHRC) welcomed the government’s efforts to improve the scheme, however it called for further reforms to bring the scheme into line with international standards.
2.10
Several submitters called for further measures to improve Australia’s standing amongst comparable Organisation for Economic Co-operation and Development (OECD) nations, with the Minderoo Foundation and Diversity Council Australia (DCA) noting that Australia significantly lags behind OECD averages when it comes to both the length of leave available and total public expenditure.
2.11
Other submitters drew attention to the United Nations International Labour Standards on Maternity Protection Convention (ILO Maternity Convention) which represents international best practice for maternity rights for women.
2.12
Dr Leonora Risse, an academic economist specialising in workforce gender equality, cautioned that even with the amendments, Australia may still fall short of international standards set by the ILO Maternity Convention. The Australian Council of Trade Unions (ACTU) and National Foundation for Australian Women (NFAW) went further and recommended the government to formally ratify the convention.
2.13
The department explained that Australia has a ‘hybrid’ paid parental leave system, in which employers may offer paid and/or unpaid parental leave to new parents, in addition to payments provided under the government-funded scheme.
2.14
The department noted that Australia’s system varies from many of our OECD counterparts, who have ‘contributory’ paid parental leave schemes which require employers and/or employees to make contributions in order to access leave.
2.15
The department advised that due to these differences, it is difficult to compare Australia’s scheme with international examples. However, it also asserted that:
The policy changes being implemented by this Bill have been informed by examples of best practice internationally, with the objective of improving women’s workforce participation and engaging more men in care.
Expansion of the scheme
2.16
Many submitters, including the ACCI, supported the extension of the scheme by combining the existing maximum of 18 weeks of Parental Leave Pay with the current two weeks of Dad and Partner Pay into a single 20-week entitlement. The ACCI added that consolidating the leave payments into a single entitlement ‘appropriately simplifies the system’.
2.17
The AHRC, also expressed support for this reform:
The Commission welcomes the increase in paid parental leave from 18 to 20 weeks, as a consequence of the abolition of 2 weeks of separate Dad and Partner Pay.
2.18
Provisions that enable single parents to access the full 20-week entitlement were also welcomed by submitters. Dr Risse observed that this change was an ‘important equitable first step’ and DCA recognised it as a significant reform for single mothers in particular.
2.19
Some submitters and witnesses called for a greater, or a more immediate extension of the scheme. However, the department’s submission argued that:
Short parental leave entitlements may incentivise parents to reengage with the labour market earlier, while long parental leave schemes have been criticised for reinforcing the narrative that young children should be cared for by their mothers.
2.20
Other inquiry participants highlighted concerns that the bill does not provide an increase to the value of the payment, or superannuation coverage for claimants.
2.21
Submitters argued that increasing the rate of the parental leave payment would provide a more effective incentive for fathers and partners to take up parental leave. Proposals as to how the parental leave payment should be increased varied, for example:
The Minderoo Foundation proposed the payment should be at least 50 per cent of the average pre-birth wage, with eligibility caps for high-income households.
The Parenthood suggested the payment should be increased to a replacement wage level.
The Shop, Distributive and Allied Employees' Association (SDA) proposed the payment should be increased to a full-replacement wage or the national average weekly earnings – whatever is greater.
NFAW proposed that the payment should be increased to a full‑replacement wage or the national average weekly earnings – whatever is lesser.
2.22
In response to these concerns, the department noted that the parental leave payment rate aligns with the recommendation of the Productivity Commission’s 2009 report, Paid Parental Leave: Support for Parents with Newborn Children, which recommended that eligible parents be paid at a rate based on the national minimum wage. The department explained:
In making this recommendation the Productivity Commission balanced considerations about the cost of the scheme to taxpayers, and the recognition that higher-earning parents are more likely to have better access to resources to take leave without support from the government.
2.23
In regards to superannuation, many called for superannuation coverage to be included in the scheme.
2.24
Dr Leonora Risse contended that there is a strong ‘moral and economic’ justification for the inclusion of superannuation payments on paid parental leave. She added that:
An employer-funded model has already been thoroughly considered and proposed by the Productivity Commission. Legislators should consider the inclusion of this element in the current Bill.
2.25
Parents at Work and the Advancing Parental Leave Equality Network (APLEN) also argued that there is a compelling social and economic case for superannuation coverage in the scheme:
Receiving additional superannuation payments will help reduce the risk of women living in poverty at retirement, contributing to a healthier state of mind when caring for their family and feeling equal worth in their caring and paid work roles, a key confidence booster on returning to work.
Improving women's economic wellbeing and financial security in retirement by paying superannuation during their parental leave years will feed back the economy, be less drain on the welfare system in the long term and lead to greater health outcomes for women towards the end of life.
2.26
The Australian Institute of Family Studies (AIFS) also contended that the lack of superannuation coverage in the current scheme contributes to the retirement income gender gap, and NFAW suggested that it could create inequitable outcomes between parents relying on the government-funded parental leave scheme, compared to those who receive employer support.
2.27
Ms Jo Evans, Acting Deputy Secretary at the department, told the committee that the department considered the issue of applying superannuation to PPL, but that the impact on an individual’s retirement income would be small. Further, that the Retirement Income Review found that ‘there would be other things that would be more beneficial to women if you are looking to address super balances.’ In answers to questions on notice, the department elaborated on the findings of Retirement Income Review:
It found that paying superannuation on government Paid Parental Leave would have a small impact on closing the retirement income gap at most earning percentiles (page 43).
It found that if superannuation was paid on Paid Parental Leave Parental Leave Pay, the median female earner would receive an additional 0.17 per cent in annual retirement income. For middle-income earners in particular, the Age Pension assets test reduces the small gains in annual superannuation income (page 270).
2.28
Noting these concerns, several other submitters recognised the government’s commitment to expand the scheme in coming years. The Australian Industry Group (Ai Group), a peak industry association representing Australian businesses across a range of sectors, acknowledged:
The Australian Government has announced that it will vary its paid parental leave scheme by increasing the current maximum 18-week quantum to 26 weeks by 1 July 2026 via staged increments of 2 weeks each year over the next 4 years. The Bill forms the first step of that policy objective.
2.29
Similarly, UNICEF Australia stated it:
… welcomes the Albanese Labor Government’s commitment to gradually increase PPL to 26 weeks with ‘use it or lost it’ provisions over the coming three years, and acknowledges that the [bill] is the first step along this important journey.
2.30
The department confirmed that the Women’s Economic Equality Taskforce (WEET), chaired by Ms Sam Mostyn AO, will review available evidence, and determine the optimal design of a 26-week model. This advice will then be considered by government throughout the development of future legislative reforms.
Use it or lose it period
2.31
Submitters were largely supportive of the bill’s two-week reserved ‘use it or lose it’ provisions. The department explained that the introduction of this measure was based on evidence indicating that reserved periods, specifically for men, actively increases their engagement in care. The department added that:
Research shows that when parents more evenly share the care of their child, women return to work earlier and work for more hours. This is crucial to improving women's economic security and workforce participation, and supporting gender equality.
2.32
At a public hearing of the inquiry, Ms Alison Kitchen, Australian Chairman of KPMG, reflected that the ‘use it or lose it’ period is ‘probably the biggest thing’ that can drive real social change through families and employer groups over time.
2.33
KPMG similarly recognised the importance of ‘use it or lose it’ provisions in promoting balanced caring arrangements in its submission:
Importantly, KPMG considers the government’s proposed ‘use it or lose it’ model is vital to encourage and facilitate more dads and partners to access PPL, so that parents can share in the caring responsibilities more equally.
2.34
AIFS agreed that the ‘use it or lose it’ measure provides an incentive for fathers to take up the leave, noting that the government should prioritise public communications about this change ‘to accentuate the benefits to families (and fathers themselves), of fathers taking up this leave’.
2.35
A number of inquiry participants were of the view that the reserved portion of the leave should be expanded beyond the two-weeks. Dr Leonora Risse cautioned that allowing ‘such a generous unallocated proportion of time’ for parents to choose how to allocate between themselves may do little to shift existing gendered patterns in caregiving:
Given prevailing gender gaps in average earnings, in heterosexual couples it is most likely going to be the birth mother who takes the full or bulk of the unallocated portion, which would have the effect of reinforcing gender norms.
2.36
Dr Risse strongly recommended the ‘use it or lose it’ proportion of the scheme be increased to six weeks for each claimant. She contended that for birth mothers, six weeks would acknowledge the importance of maternal recovery and child health; and that for fathers and partners, that six weeks would legitimise and endorse their role in childrearing and caregiving.
2.37
Chief Executive Women, NFAW and the ACTU recommended that as the overall length of the scheme increases to 26 weeks by 2026, so too should the duration of the ‘use it or lose it’ period. While KPMG proposed that the reserved period for each parent should be at least five weeks by 2026.
2.38
Ms Evans advised that the proportion of ‘use it or lose it’ weeks as the scheme continues to scale up, will be subject to advice from the WEET:
The government's intention was to introduce an initial period of two weeks to allow both parents access to the leave entitlement. The government then sought advice from the Women's Economic Equality Taskforce on the exact structure of the 'use it or lose it' provisions as the scheme rolls out to reach the 26 weeks by 2026. The government is expecting advice from the WEET in the next couple of months—by March or April this year—which will inform the next tranche of legislation, which will take effect from 1 July 2024.
Gender neutral claiming
2.39
As noted in Chapter 1, the bill amends the Paid Parental Leave Act 2010 (the Act) to create a more gender neutral scheme and claiming process. These changes were widely supported by submitters and witnesses.
2.40
The AHRC welcomed the bill’s removal of the notions of ‘primary’, ‘secondary’ and ‘tertiary’ carers and reflected that:
The stereotypical assumption that mothers are the ‘primary caregiver’ is not reflective of the current realities of modern parenting and earning. The Commission therefore supports the removal of labelling claimants as ‘primary’, ‘secondary’ and ‘tertiary’, and that the primary claimants must be birth parents, to allow families to determine how the entitlement is to be shared.
2.41
NFAW also endorsed these amendments, stating that not only do they simplify and create efficiencies in the scheme, they also send ‘an appropriate signal about the direct importance of the role of fathers and partners in the lives of newborns’.
2.42
Some inquiry participants suggested that language in the bill should be more inclusive. For example, Ms Peldova-McClelland of the ACTU stated:
There is just one technical change that I spoke to previously about the use of the term 'birth parent'. I think it's really important that that term is used, rather than birth mother. The reason is the entitlement to paid parental leave and the language used to describe that entitlement should include all people who give birth and it's the proper role of government to ensure that its services and programs respond to the needs of everybody and this includes transgender, gender diverse and non-binary parents, so we think that's a really important technical change. As for the rest of the bill, we are very supportive of all of the changes that it's introducing.
2.43
The Salvation Army welcomed amendments that allow non-birth parents to apply for Parental Leave Pay and noted the government’s efforts to protect victim-survivors of domestic violence by requiring birth parents to grant permission for other carers to apply for paid parental leave. However, they suggested additional safeguards be implemented, including obtaining verbal permission from the birth parent, and specialised family and domestic violence training to be rolled-out for Centrelink officials dealing with these cases.
2.44
The NTWWC also outlined some possible implications the permission granting reforms could have during family disputes, or on women experiencing family and domestic violence.
2.45
The NTWWC cautioned that it would be important to have ‘structures in place’ to ensure victim-survivors and children are not further endangered.
2.46
The department clarified that additional information regarding this change will be provided to both Services Australia staff and birth parents:
There'll be information provided to Services [Australia] staff. They will also provide information to the birth parent. If someone else has sought authority to claim, that information will go back to the birth parent as well, and then Services [Australia] will work through the provision of that information.
Increasing flexibility
2.47
Submitters were broadly supportive of measures that increase flexibility of the scheme by allowing parents to take their entire entitlement in blocks as small as a day at a time, with periods of work in between, within two years of the child’s birth or adoption.
2.48
AIFS submitted that many parents seek flexibility in their employment arrangements to help manage work and care responsibilities. AIFS added that flexibility in leave-taking can help support:
mothers better manage their return and ongoing connection to work;
greater uptake and utilisation of paid parental leave by fathers; and
greater career stability for parents overall.
2.49
NFAW also welcomed these provisions and provided similar reasons for their support:
The additional flexibility available under the Bill will assist parents who continue to participate in the workforce while allowing them to spend time bonding with their child. It will be useful to support women to maintain a useful connection with their workplace.
2.50
In contrast, Ai Group expressed concern about the potential impacts that increased flexibility of the scheme could have on businesses:
… the taking of an increased amount of flexible parental leave would be hugely disruptive for employers, co-workers and replacement employees to manage an extended period of ad hoc single day or multiple block absences, the duration and days of which the employee need not confirm with his/her employer until 4 weeks prior, or if not practicable, at a later stage, including after the leave has commenced.
2.51
Conversely, the ACCI stated that a move to a more flexible scheme would provide benefits to both employees and employers:
First, greater flexibility in the PPL scheme will mean that employees are more likely to gradually recommence working sooner. This will likely improve contact between employers and employees, as the duration for which the employee is entirely absent during a work week will likely shorten, strengthening the employment relationship.
Second, partial vacancies can often be more easily managed by employers than full vacancies that last for several weeks.
… Third, improving flexibility in the labour market generally means that it is more adapted to the diverse needs of workers and their families.
2.52
ACCI concluded that it supports increased flexibility in employment arrangements and particularly measures that ‘do not impose new or increased administrative burdens on employers, such as these changes’.
2.53
Ms Evans confirmed that the bill does not change employers’ administrative responsibilities under the scheme. She explained that employers will continue to administer parental leave payments for employees taking leave in blocks of eight weeks or more. For employees taking less than eight weeks leave, employers can continue to have Services Australia administer these payments.
2.54
She noted that the intent of these provisions is to minimise the regulatory burden on small businesses and provided the following example:
… the parent might decide to move to taking every second Friday off, which they are entitled to do under flexibility provisions, but that could be seen to be more burdensome on the payroll services of small business, and so in that case Services [Australia] could make the payments.
2.55
Ms Evans also told the committee that Services Australia have developed an ‘employer toolkit’ and have already begun engaging with businesses to increase awareness of these provisions.
Eligibility changes
2.56
Several submitters welcomed amendments that expand eligibility of the scheme to eligible fathers or partners, regardless of whether the birth parent meets the income test, residency requirements, or is serving a newly arrived resident's waiting period (NARWP).
2.57
Other views specific to the scheme’s income, work and residency tests are canvassed below.
Changes to the income test
2.58
Submitters and witnesses were overwhelmingly supportive of the introduction of the $350 000 family income test and many recognised that it would deliver more equitable outcomes for Australian families.
The proposal to introduce a family income test is a positive move towards recognizing in many families, women are the higher income earner. Families where this is the case should be entitled to paid parental leave in the same way that other families are where the male or partner is the higher income earner. This will ensure the scheme is more equitable for all families.
2.60
DCA also expressed support for the income test reforms, similarly reflecting that the change promotes gender equality and addresses the issue in the current scheme where the primary carer is assumed to be the lower income earner.
2.61
Ai Group echoed this view, stating that:
The household income limit of $350,000 is an appropriate cap that can ensure families with one income-earner above the current individual income test can still access [Parental Leave Pay], regardless of whether they are male or female.
2.62
AIFS also welcomed the introduction of the family income limit, adding that these ‘are positive steps to improve accessibility for some parents who may currently be missing out’. AIFS noted that monitoring how this change impacts scheme uptake by higher income earning mothers would be of interest.
Comments on the work and residency tests
2.63
Some inquiry participants called for the removal, or a reduction in the scheme’s work test, while others suggested further changes to allow more workers to qualify for the payment.
2.64
Proposals to reduce the work test period varied. For example:
The SDA suggested it be reduced below the existing 10-month requirement;
WLSA suggested it be reduced to 6 months; and
the ACTU suggested there should be no minimum period of work required to qualify for paid parental leave.
2.65
The ACTU added that paid parental leave should be available to ‘every worker who needs it’ including:
… workers on casual, temporary or fixed term contracts; workers on visas; workers on any period of paid or unpaid leave; parents of children on permanent care order; parents who need paid parental leave for pregnancy, childbirth, assisted reproduction or fertility treatment, adoption, bonding, surrogacy, fostering, kinship placements and breastfeeding.
2.66
Ms Madison Williams-Hoffman, a PhD student who is currently expecting her first child, raised concerns that PhD students do not qualify for the scheme as their activity is counted as ‘study through a scholarship or other award of financial aid’ and therefore fails the work test.
2.67
Ms Williams-Hoffman explained that without access to the scheme, she is left to rely on the parental leave offered by her university. She pointed out that the parental leave provided by many Australian universities are not as generous as the government-funded scheme in terms of duration or flexibility.
2.68
She implored the government to consider further changes to allow PhD students to access the scheme:
As the current conditions stand, I am a young woman with great potential at the cusp of my career and starting my young family with my partner. The current exclusion of scholarship from the work test, the effective exclusion of PhD students from accessing appropriate parental leave, means I am having to decide between the two. For me family will always come first, and I am afraid I am being forced into a decision that other primary carers in their PhDs are also silently facing.
2.69
The department acknowledged that the bill maintains the current work test rules, however, that the work test is closely based on the proposal by the Productivity Commission’s 2009 report. In answers to questions taken on notice, the department provided the following explanation:
The work test proposed by the Productivity Commission supports the objective of increasing women’s workforce participation, while avoiding undesirable outcomes such as a large number of mothers failing the work test because of short birth spacing, or reducing the amount of time they take off work caring for a baby in order to re-qualify for the scheme for a subsequent pregnancy.
The number of hours of qualifying work required in the 10-month period takes account of women with children who are more likely to work part‑time hours. The length of work required is flexible to cater for premature births, to allow for some breaks in employment, and to enable employees with more interrupted patterns of work, such as casuals, to qualify. Employer-provided paid leave is counted as qualifying work when calculating work test eligibility.
2.70
In relation to concerns that the work test should be available to every worker, the department advised:
The work test is applied equally to all people who submit a claim for Parental Leave Pay. Workers on casual, temporary or fixed term contracts may meet the work test, including if they have a break between working days of up to 12 weeks. The hours of work performed do not have to be with the same employer.
The Paid Parental Leave scheme is intended to support working parents who have demonstrated an attachment to the workforce. Should a PhD student undertake paid work in addition to their studies, such as tutoring at a university, this could count towards the work test.
2.71
Regarding the residency test, the NTWWC raised that:
The current drafting of the Bill does not address or provide parental leave entitlements for migrants on working visas who contribute significantly to the Australian economy and workforce.
2.72
Similarly, WLSA recommended that the residency test is amended to remove the NARWP and other visa restrictions.
2.73
In relation to the residency test, Ms Evans noted:
The newly arrived residents waiting period is something that applies across various social security payments within the architecture of government support. For paid parental leave, the newly arrived residents waiting period is set at two years. That said, what I would say is there is a change around residency in the changes that we're proposing here that would further support non-resident birth parents. Previously a non‑resident birth parent was not eligible to claim, but under the gender‑neutral claiming arrangements that are being introduced here the other parent will be able to claim. So if the other parent meets the residency requirements, the work test and the income test, then that family would have access to PPL. That is an improvement under this scheme.
Commencement and transitional provisions
2.74
The Salvation Army and Ms Madison Williams-Hoffman expressed some reservations regarding the bill’s transitional provisions. The Salvation Army urged the government to consider modifying these provisions and pointed out that:
… relying on the expected date of birth of the child could act as an increased stressor for families expecting a child on or around 1 July 2023, and that the suggested commencement and transition period does not adequately consider nor reflect the needs and potential stressors for these families.
For example, if a child is due on or after 1 July, though is born prematurely prior to this date, the Bill stipulates that this family will not be eligible for the new amendments.
2.75
Ms Williams-Hoffman suggested that the government consider retroactively applying the provisions:
My partner and I will not actually qualify for the new leave entitlements as they do not state they will be retroactively applied. This to me appears to be another potential oversight. Our child will be born in May of 2023, and we will miss out on the new scheme by a matter of weeks.
Scheme review mechanisms
2.76
Some inquiry participants called for measures to ensure the Act is reviewed in coming years. For example, NFAW recommended:
… that the Government commit, in this Bill to undertaking a review of the legislation to assess its progress against the objects of the legislation, and the balance against these outcomes. Clearly, gender equality is a complex endeavour, and it is not something that can be set and forgotten. Legislation such as this Bill require ongoing and effective monitoring and evaluation.
2.77
Dr Leonora Risse also raised this point at a public hearing of the committee:
… I noticed there was no provision made for an independent evaluation and review of the bill, as was included in the original paid parental leave legislation. Particularly given that it is somewhat iterative and you're going to be gauging the impact, I think it would be essential to include that in this bill.
2.78
The department’s submission notes that the government will conduct an evaluation of the amended scheme which will complement and/or build on evidence provided by the WEET. It outlined the scope of the evaluation, including:
… a post-implementation review to assess whether the scheme has been successfully implemented.
It will also identify the short-term outcomes experienced by parents and employers, including whether the scheme is increasing gender equality in the care for children after a birth or adoption. The latter will provide indication of whether greater gender equality outcomes may be achieved in the longer term, e.g. 10 years. Overall, the evaluation will inform potential improvements to the scheme and future policy directions.
Committee view
2.79
The committee recognises that promoting the sharing of childcare responsibilities is one of the biggest levers governments can pull to improve women’s economic security, gender equality and other social and economic outcomes for Australian families. To this end, the committee notes that this bill represents the first major reform to Australia’s Paid Parental Leave scheme in over a decade.
2.80
The committee notes the overwhelming support from submitters and witnesses for the bill’s intention to make the scheme more accessible, flexible and gender neutral, and reiterates evidence from the NTWWC which affirmed that the bill would significantly assist women, men and families in finding a balance between employment and family obligations.
2.81
The committee acknowledges the concerns that suggest that Australia’s Paid Parental Leave scheme lags behind comparable OECD countries and other international standards. However, the committee notes the department’s explanation that Australia’s ‘hybrid’ paid parental leave system is different from many of its OECD counterparts, who have ‘contributory’ schemes. Noting these differences in funding and structure, the committee considers that it is difficult to make international comparisons for Australia’s Paid Parental Leave scheme.
2.82
The committee observed that many submitters and witnesses welcomed the extension of the scheme from 18 to 20 weeks. Whilst some called for a greater or more immediate expansion, the committee acknowledges the government’s commitment to progressively increase the scheme to a total of 26 weeks (a full 6 months) by July 2026.
2.83
The committee is also encouraged that throughout the development of future reforms, the WEET will provide government with advice on the optimal design of the 26-week model to maximise women’s economic equality. Further, the committee is pleased to hear that an evaluation of the amended scheme will also complement the advice provided by the WEET.
2.84
The committee acknowledges that some submitters and witnesses called for an increase to the rate of the parental leave payment and/or for the provision of superannuation coverage in the scheme. Evidence suggested that these measures would be more effective in incentivising fathers to engage in care; improving women’s economic security; and supporting gender equality.
2.85
However, the committee notes the advice from the department, that applying superannuation to the paid parental leave payment would have a small impact on the annual retirement income of a female earner (0.17 per cent).
2.86
On balance, the committee believes the bill promotes and incentivises shared parenting, women’s economic security and gender equality.
2.87
For example, the committee observed that witnesses and submitters supported the introduction of a two-week, reserved ‘use it or lose it’ period to encourage parents to share care more equally.
2.88
The committee highlights evidence provided by KPMG which indicates that reserved periods are particularly important to encourage more fathers and partners to access paid parental leave.
2.89
The committee understands that some submitters argued that the reserved period should be longer. However, the committee notes that the WEET will provide advice to government on the recommended proportion of ‘use it or lose it’ weeks as the scheme is scaled up through to 2026.
2.90
The committee acknowledges the strong support for amendments that create a more gender neutral claiming process by removing the existing requirement that the first claimant must be the birth parent; and eliminating the notions of ‘primary’, ‘secondary’ and ‘tertiary’ claimants in the scheme.
2.91
The committee concurs with the AHRC’s point that the stereotypical assumption that mothers are the ‘primary caregiver’ is no longer reflective of the realities of modern-day parenting and earning in Australia. The committee is glad that the amendments not only remove these assumptions, but also simplify the scheme.
2.92
The committee is conscious that some submitters flagged the potential risk of fathers or partners taking out parental leave payments against the wishes of the birth parent, as a form of domestic violence, financial abuse, or coercive control. The committee notes that the bill requires permission from birth parents to permit others to make a claim, and that Services Australia will provide information regarding this change to both its staff and to birth parents, to help mitigate the risk of domestic violence, financial abuse, or coercive control. However, the committee would urge the government to monitor this issue throughout the implementation of the reforms, and introduce further protections if necessary.
2.93
In terms of flexibility, the committee appreciates that many new parents seek flexible leave-taking arrangements to help manage their caregiving responsibilities, and understands that witnesses and submitters were generally supportive of amendments which facilitate this.
2.94
The committee reiterates evidence from AIFS which highlighted that changes allowing claimants to take their paid parental leave in blocks as small as one day at a time, will help mothers manage their return and ongoing connection to work, support greater uptake of paid parental leave by fathers and partners, and facilitate greater career stability for both parents.
2.95
Additionally, the committee is reassured by evidence provided by ACCI which asserted that a more flexible scheme would benefit both employees and employers. The committee is also comforted by evidence which states that the amendments do not impose additional administrative burdens on businesses.
2.96
In relation to eligibility reforms, the committee welcomes wide support for changes that allow qualifying fathers and partners to access the scheme regardless of whether the birth parent meets the income or residency requirements. The committee also notes overwhelming support amongst submitters in relation to the introduction of the new $350 000 family income test. The committee is pleased that this reform rectifies the current policy’s unfair treatment of families where the birth parent is the higher income earner. The committee considers that both of these changes will create a more equitable scheme for Australian families.
2.97
The committee notes some calls to reduce, remove or widen the work test, and other suggestions to ease the residency requirements. However, the committee accepts evidence from the department that Parental Leave Pay is available to all workers, including casual and temporary workers, as well as workers on fixed term contracts. Further, where the non-resident birth parent would not be eligible to claim Parental Leave Pay, the changes proposed by the bill would allow the other parent to claim the payment if they meet the residency and other eligibility requirements.
2.98
The committee is aware that the measures in the bill implement an election commitment of the government to deliver better outcomes for families and advance women’s economic participation.
2.99
The committee is strongly of the view that the reforms proposed by the bill will deliver better outcomes for parents, children, employers and the economy, and it is satisfied that the bill achieves its overarching objectives to create a more accessible, flexible and gender neutral Paid Parental Leave scheme for Australian families.
2.100
The committee recommends that the Senate pass the bill.
Senator Marielle Smith
Chair