Is paid parental leave a ‘welfare wage’? > Check the facts

Who: The current paid parental leave scheme only pays “a welfare wage”. Tony Abbott.

“We need to recognise that paid parental leave should be a work place right and not a welfare payment.” Christine Milne.

The claim: That payments from the present paid-parental-leave scheme are inadequate as it is not a replacement for previous wages.

The facts: People on paid parental leave receive the minimum wage which is presently $16.37 per hour or $622.20 per week. The most generous ‘welfare payment’ is the single pension which is presently $366.80 per week. For people of working age the most relevant ‘welfare payment’ is the single Newstart payment which is presently $248.50 a week.

Discussion of evidence: References to a ‘welfare wage’ and ‘welfare payment’ invites comparison with government pensions and benefits. People on the paid-parental-leave payment receive the minimum wage which is presently 70 per cent higher than the single pension and 150 per cent higher than the single Newstart allowance.

While the Opposition and Greens would like to highlight the differences between the present scheme (introduced by the Labor government) and its own policies, it is misleading to infer the present scheme as paying ‘welfare wages’ when clearly the payments greatly exceed ‘welfare payments’.

A more generous scheme which would involve the replacement of prior earnings for 26 weeks up to a limit set by those earning $150,000 per annum. (The Greens have a $100,000 cap.) Many people are already entitled to paid-parental-leave through arrangements with their employer. Such work-based entitlements as well as sick leave, annual leave, long service leave and contributions towards retirement are earnings related.

If an Abbott Government, supported by the Greens were to provide an earnings-related paid-parental-leave scheme it would be the first time in Australia that a payment to individuals was based on prior earnings (for example neither the Age Pension nor unemployment benefits are calculated on prior earnings).

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