Paid Parental Leave in Australia: Baby Bonus versus PPL - Belinda Hewitt * Ning Xiang Judith Rose Laetitia Coles ISSR, UQ
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Paid Parental Leave in Australia: Baby Bonus versus PPL Belinda Hewitt * Ning Xiang Judith Rose Laetitia Coles ISSR, UQ *Corresponding author: b.hewitt@uq.edu.au
Background to Baby Bonus (BB)
2004 BB introduced @ $3000 (non-means tested & lump sum)
Partially Address declining birth rate, pro-natalist policy
High utilization rate – 95 per cent uptake in first year
2007 claimants under 18 were paid in 13 fortnightly
installments
2008 BB increased to $5000
2009 BB means tested to exclude high income families and
all families paid the BB in 13 equal instalments
2013 BB reduced from $5000 to $3000 for second and
subsequent children
2014 1 March, BB will be abolishedPPL: Special Groups expected to benefit
• Casual contract workers
• Self-employed workers
• Lone parents
• Culturally and linguistically diverse
(CALD) parents
• Aboriginal or Torres Strait Islander
parents
Source: Paid Parental Leave Evaluation: Phase 1 (2012: 3)
Productivity Commission Inquiry Report (2009)Literature Review
Payment &
Eligibility Country
United Kingdom Canada1 New Zealand
Payment Statutory maternity pay by employer • Employment Insurance • Paid Parental Leave
• 52 weeks • Maternity Leave Benefit (Can take Maternity • 14 weeks at up to $475.16 per
• 6 weeks = 90% of average weekly earnings Benefit and Parental Benefit consecutively) week.
• 33 weeks = £136.78/week or 90% of income • 15 weeks at 55% of earnings up to
• Last 13 weeks unpaid CA$45,900/year
Eligibility • For “employees” (permanent employee) • Must meet specific work and income tests • Must meet specific work tests
• Must meet a specific work and income test • Can only be taken by the mother
Payment Maternity allowance by government • Employment Insurance • Parental Tax Credit
• 39 weeks at £136.78/week or 90% of income • Parental Leave Benefit (Can take Maternity • 8 weeks at up to $150/week
• May impact some other social security Benefit and Parental Benefit consecutively)
benefits • 35 weeks at 55% of earnings up to
CA$45,900/year
eligibility • For “workers” (contract/casual) • Must meet specific work and income tests Can not receive certain other
• Must meet some employment/self-employed • May be claimed by one parent or shared social security payments/benefits.
work and income test
payment • One-off payment of £500 for first child only
Eligibility • Must be receiving certain other social security
benefits
1 There are some small variations across provinces in Canada in relation to length of leave and earnings ceilingsResearch question
Are there differences between working mothers who
were eligible for PPL but chose to take Baby Bonus
rather than PPL in their:
- social demographics
- family background
- work characteristicsData and Methods The Mothers Process Evaluation (MoPE) Survey: - Conducted in Nov. and Dec. 2011 - A telephone survey - Sample: mothers whose baby was born in July or August 2011 (i.e., babies aged 4-6 months) - Response rate: 81.2% - N=901 (800 PPL + 101 BB) Analysis: - Logistic regression
Variables Dependent variable: took BB (reference took PLP) Independent variables: Social Family Work characteristics demographics background before the birth Maternal age Relationship status Sector Education Partner’s education Employer size Mother’s country of birth Partner’s income Work hours Culturally and Linguistically Other children in Employment contract Diverse household Aboriginal or Torres Strait Whether left job before Islander status the birth Income before the birth
Results – social and demographic characteristics These groups are significantly more likely to take BB: - Age: 18-24 (OR= 4.17, p
Results – Family background These groups are significantly more likely to take BB: - Relationship status: single (OR=2.61, p
Results – Work characteristics These groups are significantly more likely to take BB: - Work hours: Fewer than 19 hours/week (OR=3.22, p
Why?
BB and PPL mothers’ main reason for choosing one payment
over the other
BB mothers PPL mothers
(Per cent) (per cent)
Better off financially with BB/PLP 51 77
Didn't want to take leave 20 n/a
Believed ineligible 14 13
Confusion 8 n/a
Didn't want to involve employer 3 n/a
Other 4 3
Total 100 93 b
N 97 a 796
a4 people had applied for PLP but were not eligible, so were not included in this question.
b4% preferred regular vs. one-off payments, 3% wanted to take more time off work with baby.
Source: MoPEConclusion They are different! BB mothers are more likely to be: Social Family Work characteristics demographics background before the birth Younger Single Sector Less educated Partner’s education Employer size Mother’s country of Partner’s income Working less than 19 birth hours per week Culturally and Have more than 1 child Work on casual bases Linguistically Diverse in household or self employed Aboriginal or Torres Left job before the birth Strait Islander status Income before the birth
Policy implications
Why does it look like these special interest groups
were less likely to choose PPL?
- Confusion over eligibility?
- Can’t afford to take leave?
- Calculate the payment incorrectly?
How to address these special interest groups?
Extra help to those most disadvantaged mothers?Questions/discussion Thanks for listening! Comments / Questions?
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