The Government has confirmed that the new paid parental leave scheme will come into force on 1 July 2002. Working women will qualify for 12 weeks paid parental leave following the birth or adoption of a child.

The scheme will be paid for out of general taxation rather than an employer levy and the total cost of the package is estimated to be about $57 million a year.

Eligibility for paid parental leave will be based on the existing criteria set out under the Parental Leave and Employment Protection Act 1987. The criteria relate to considerations such as the employee's length of service, rather than any financial considerations. It is a universal provision and employees will not be means-tested.

Eligible women will receive a maximum payment of $325 gross per week, which equates to 53% of New Zealand's average male and female weekly earnings.

Around 20,000 working mothers will be covered by the scheme. Another 8,000 are either self-employed or don't meet the eligibility criteria set out under the Parental Leave and Employment Protection Act 1987.

The parental tax credit scheme, set up by the National Government in 1999, for lower and middle income families, will not change. It provides a maximum of $1200 for each newborn child, payable to the principal caregiver at the rate of up to $150 weekly for up to eight weeks. Women who do not meet the eligibility criteria will still qualify for the parental tax credit if they are on low incomes. The Government has earmarked a further $20 million for this scheme and will ensure that there will not be double dipping between the two schemes.

The existing criteria for unpaid extended parental leave of up to 52 weeks will not change.

Payment can be shared between eligible partners, including those in same sex relationships.

This article is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this article.

Copyright Phillips Fox, 2001

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