OIA328 Paid Parental Leave Background and Next Steps for Manifesto Commitment Redacted.pdf

BRIEFING

Paid  Parental  Leave:  Background  and  Next  Steps  for  Manifesto
Commitment
Date:
7 December 2023
Priority:
Medium
Security
Tracking
In Confidence
2324-0945
classification:
number:

Action sought

Action sought
Deadline
Hon Brooke van Velden
Discuss the next steps for the paid
Minister for Workplace
parental leave Manifesto
14 December 2023
Relations and Safety
commitment with officials.

Contact for telephone discussion (if required)
Name
Position
Telephone
1st contact
Manager, Employment
Alison Marris
04 901 8564
s 9(2)(a)

✓
Standards Policy
Senior Policy Advisor,
Tim Spackman
Employment Standards
04 897 5059

Policy

The following departments/agencies have been consulted
Inland Revenue

Minister’s office to complete:
Approved
Declined

Noted
Needs change

Seen
Overtaken by Events

See Minister’s Notes
Withdrawn


C
Released under the Official Information Act 1982
omments

BRIEFING
Paid  Parental  Leave:  Background  and  Next  Steps  for  Manifesto
Commitment
Date:
7 December 2023
Priority:
Medium
Security
Tracking
In Confidence
2324-0945
classification:
number:
Purpose
The National Party has a Manifesto commitment in relation to paid parental leave. This paper gives
you background information on New Zealand’s parental leave scheme and seeks a discussion on
your goals and preferred approach to the parental leave work programme.
Executive summary
New  Zealand’s  paid  parental  leave  scheme  offers  job-protection,  leave  and  payments  to
supplement a family’s income while a parent or caregiver is not working, due to a new child in the
family.  Leave  and  payments  are  separate  components,  each  with  different  eligibility  criteria.
Eligibility for both components is based on the primary carer’s employment in the first instance.
The  Parental  Leave  and  Employment  Protection  Act  1987  (the  Act)  has  rigid  rules  and  does  not
meet the needs of some New Zealand families, given the way parenting has evolved. Amendments
to modernise the Act have also made it complex to administer and confusing for parents.
The National Party Manifesto commits to a more flexible and modern parental leave scheme that
allows  parents  to  make  the  choices  that  best  suit  their  personal  circumstances.  Based  on  this
commitment, we have begun to explore ways to introduce more flexibility for parents.
There  are  limited  options  to  achieve  greater  flexibility  within  the  structure  of  the  current  Act.  The
main option would be through amendments to the transfer provisions. In our view, a truly flexible
scheme that meets the needs of today’s families would best be achieved through a full review. This
would also help to manage the risk of making changes to the Act that introduce further complexity.
We look forward to talking with you about your goals and preferred approach. We can then provide
more detailed advice about options and timing for achieving your priorities.
Recommended action
The Ministry of Business, Innovation and Employment recommends that you:
a
Released under the Official Information Act 1982
Discuss the next steps for the Manifesto commitment with officials.
Agree/Disagree

Alison Marris
Hon Brooke van Velden
Manager, Employment Standards Policy
Minister for Workplace Relations and Safety
Labour, Science and Enterprise, MBIE
..... / ...... / ......
..... / ...... / ......
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Overview of the parental leave scheme
1.
Parental  leave  has  both  economic  and  social  benefits.  Parental  leave  supports  child
cognitive  development,  women’s  and  children’s  health,  and  reduces  child  poverty.  It  also
allows mothers to recover from pregnancy and childbirth and parents to bond with their child.
Parental leave is associated with protective effects on mothers’ mental health 1.
2.
A  well-designed  parental  leave  scheme  can  have  a  positive  impact  on  female  labour  force
participation2 and lowering the gender pay gap3. It helps keep employees connected to their
employer  and  eases  financial  stress  for  new  parents  without  placing  additional  financial
pressure on employers.
New Zealand’s paid parental leave scheme offers job-protection and payments
3.
New  Zealand’s  parental  leave  scheme  protects  employment  and  provides  payments  to
supplement a family’s income while a parent or permanent caregiver has stopped working to
care  for  a  new  child.  The  parental  leave  scheme  is  set  out  in  the  Parental  Leave  and
Employment  Protection  Act  1987  (the  Act).  Over  the  year  to  June  2023,  approximately  60
percent of births had a parent receiving paid parental leave 4.
4.
Job-protected  leave  and  payments  are  separate  components,  each  with  different  eligibility
criteria. Someone may be eligible for one component but not the other5.
5.
Unpaid job-protected leave of up to 52 weeks is available to the ‘primary carer’ of the child6.
Job-protected  leave  can  be  shared  between  eligible  parents,  either  in  alternate  periods  or
simultaneously (see Annex One for an overview). Partners are entitled to up to two weeks of
unpaid leave.
6.
Eligible parents and permanent caregivers are also entitled to up to 26 weeks of government-
funded  parental  leave  payments.  Payment  eligibility  can  be  transferred  to  a  spouse  or
partner7  but  both  parents  cannot  receive  payments  simultaneously  and  only  one  transfer  is
possible after payments have commenced. Payments are made at the rate the person would
usually  be  earning,  up  to  a  maximum  of  $712.17  gross  per  week.  This  rate  increases
annually in line with the average weekly wage (see Annex Two for more information).
7.
The  parental  leave  provisions  set  out  in  the  Act are  a statutory minimum.  Some  employers
negotiate to go above and beyond this minimum.
8.
Parental  leave  policy  falls  within  your  authority  as  the  responsible  Minister  for  Workplace
Relations  and  Safety.  Inland  Revenue  (IR)  administers  applications  and  makes  payments
while  the  Ministry  of  Business,  Innovation  and  Employment  (MBIE)  provides  you  policy
advice  on  parental  leave.  The  Employment  Services  operational  branch  within  MBIE  is
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1 Heshmati, A., Honkaniemi H., & Juarez S. P. (2023). The effect of parental leave on parents’ mental health: a systematic review, The
Lancet, 8(1), 57-75,.
2 Nandi, A., et al., (2018), The Impact of Parental and Medical Leave Policies on Socioeconomic and Health Outcomes in OECD
Countries: A Systematic Review of the Empirical Literature, The Milbank Quarterly, 434–471.
3 Del Rey, Racionero, & Silva, (2021), Labour market effects of reducing the gender gap in parental leave entitlements, Labour
Economics, 72.
4 This is calculated by dividing the number of new applicants who have received a parental leave payment (37,432) divided by the
number of live births (58,707),
5 If an individual is entitled to payments, but is not entitled to parental leave they can take a period of negotiated carer leave or
otherwise stop working to care for the child, and will receive parental leave payments.
6 A primary carer is either the biological mother of the child, or the spouse or partner of the biological mother (if the biological mother
transfers their entitlement to their spouse), or a person taking permanent primary responsibility for the care, development and
upbringing of a child under six years old.
7 The transferee must also meet the parental leave payment eligibility test.
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responsible for operational issues and resolving disputes (see Annex Two for more detailed
information on these roles).
9.
The  parental  leave  scheme  sits  within  a  wider  government  support  system  for  families,
including Working for Families, and the Early Childhood Education subsidy (see Annex One
for other government support).
The Act was built around eligibility to the birth mother in the first instance
10.  When the Act was passed in 1987 it was designed to provide a brief period of employment-
protected  leave  to  women  who  had  given  birth,  with  payments  introduced  in  2002.  A  key
focus of the 2002 changes was incentivising women to stay attached to the labour market8,
which influenced eligibility criteria and the structure of the Act.
11.  If a biological mother is not eligible for payment, their spouse or partner cannot be eligible in
their own right. Although an eligible mother can transfer eligibility for payments to her spouse
or  partner,  this  is  unusual.  As  of  August  2022,  only  2.5  per  cent  of  the  people  receiving
payments over the preceding three years were a spouse or partner.
Past  amendments  to  modernise  the  Act  have  made  it  complex  to  administer  and
confusing for parents
12.  There  have  been  eight  Parental  Leave  and  Employment  Protection  Amendment  Acts  since
the Act was passed in 1987. Eligibility for payments has expanded to a wider variety of family
and working situations, and the ability to transfer to a spouse or partner now exists.
13.  Amendments have modernised the Act to some extent, but have also led to a complex and
unwieldy  piece  of  legislation.  The  Act  has  become  longer  and  more  complicated  with  each
amendment,  and  some  changes  created  loopholes  or  contradictions  that  have  been
addressed through further amendments.
14.  The  complexity  of  the  legislation,  along  with  its  rigid  rules,  leads  to  a  process  that  is
confusing for applicants.  Eligibility  for  payments sits with the mother or primary carer in the
first instance and there is no specific paid leave for  a spouse or partner. The primary carer
can transfer their entitlement to payment to their spouse or partner, but the payments must
be  received  in  one  continuous  period  (i.e.  they  cannot  return  to  work  for  a  while  and  then
resume  payments)  and  payments  can  only  be  transferred  once.  Some  parents  lose  their
entitlements as a result of not understanding the eligibility criteria or going about the transfer
process incorrectly.
15.  Eligibility for unpaid partner’s leave depends on continuous attachment to a single employer
for at least six months and this eligibility requirement may not be met by people working for
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wages, doing ‘gig work’ or in less stable employment9.
16.  As  New  Zealand  family  dynamics  have  shifted  and  working  arrangements  have  become
more flexible, the Act has been less able to accommodate the needs of modern families and
the choices they wish to make about their own caregiving arrangements.

8 A payment linked to employment provides an incentive to apply for employment leave that already existed. This job-protected leave
maintains connection with the workplace, minimising longer-term negative financial impacts from time out of the workforce with children.
9 In 2021, approximately 16 per cent of wage-earning fathers may not meet eligibility for the two weeks’ unpaid leave. For Māori and
Pasifika this is closer to 25 per cent of wage-earning fathers not meeting eligibility criteria. (Kulkarni, R & Mok, T. (2021). ‘What about
the menz?’ Low employer attachment and ineligibility for partner parental leave. The Southern Initiative.)
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17.  Having  dated  legislation  that  is  inflexible  and  confusing  places  a  burden  on  delivery
resources10  and  has  resulted  in  legal  challenges  from  applicants  who  have  been  declined
payments. MBIE has observed an increase in appeals to the Employment Relations Authority
(the  Authority)  since  202011.  The  Act  is  also  a  driver  of  demand  for  dispute  resolution
services,  which  could  be  reduced  by  better  legislation  (see  Annex  Two  for  more
information). This is not a significant portion of demand or output for the Authority or MBIE,
but  there  is  a  potential  for  significant  adverse  impacts  on  parents  and  children  during  a
pivotal time period in their lives, due to issues with the overall design of the scheme.
18.  Agencies  have  made  improvements  in  order  to  simplify  the  application  process,  such  as
moving to online applications and  updating online guidance.  Having modern, fit for purpose
legislation  would  assist  families  in making  use  of  the  scheme  and,  in the  long-term,  reduce
demands on both MBIE and IR.
The  National  Party  Manifesto  commits  to  more  flexibility  and
choices for families
19.  Parental leave is not specifically referenced in the National/ACT Coalition Agreement or the
National/NZ  First  Coalition  Agreement.  We  have  taken  the  National  Party  Manifesto
commitment  as  the  starting  point  for  our  advice,  however,  we  would  like  to  discuss  your
objectives for this area of work.
20.  The Manifesto committed to  a more modern and flexible parental leave scheme that allows
parents  to  make  the  choices  that  best  suit  their  personal  circumstances.  The  Manifesto
mentions  allowing  parents  to  receive  parental  leave  payments  simultaneously  or  one  after
another. There is no deadline set for meeting this commitment.
21.  There is already some flexibility with respect to the unpaid job-protected leave. Job-protected
leave from employment of up to 52 weeks is available in some circumstances, which can be
shared between eligible parents. Parents can alternate periods of job-protected leave or take
it simultaneously.
22.  However,  the  rules  around  parental  leave  payments  are  more  rigid  than  those  for  job-
protected  leave;  as  noted  in  paragraph  14,  eligibility  sits  with  the  primary  carer  in  the  first
instance  and  allows  a  single  transfer  of  entitlement  which  then  must  be  received  in  one
continuous period. This may not offer the flexibility some New Zealand families need.
Some  elements  of  the  current  legislation  could  be  amended  to  provide  some
increased flexibility and choice, but that may not go far enough
23.  Due  to  the  way  the  Act  is  structured  (for  example  only  allowing  for  one  primary  carer  at  a
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time)  the  flexibility  and  choice  that  could  be  achieved  through  targeted  amendments  to  the
transfer  provisions  is  limited.  Targeted  amendments  could  provide  more  flexibility  with
receiving  and  transferring  payments  (if  both  parents  meet  eligibility  criteria)  but  may  not
provide the desired level of flexibility and could introduce further complexity or confusion.
24.  s 9(2)(h)

10 In 2022/23, the Labour Inspectorate received 94 cases from IR for decisions, up from 75 cases in 2021/22, after a peak of 110 in
2020/21.
11 20 cases went to the Authority for determinations in 2022, up from six cases in 2021, and 1 case in 2020.
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s 9(2)(h)


25.  IR will need an understanding of the scope and desired parental leave settings, to ensure it
can  accurately  advise  on  complexity,  timeframes  for  build  and  implementation,  as  well  as
costs.
26.  We  would  like  to  discuss  the  Manifesto  commitment  and  your  objectives  with  you  in  more
detail to ensure that we understand the outcomes you wish to achieve. We will then be in a
better position to provide more detailed advice.
Full flexibility and choice for parents would require a review of the Act
27.  While  it  is  possible  to  increase  flexibility  around  payment  transfers,  this  would  not  address
challenges in other areas; such as the rigidity of the eligibility thresholds, payment eligibility
defaulting  to  the  mother,  or  technical  issues  that  increase  administrative  costs.  Our  initial
view  is  that  the Manifesto  commitment  would  best  be  achieved  through a  full  review  of  the
Act.
28.  A full review would provide scope to consider the foundations and intent of the scheme, and
create  a  truly  flexible  scheme  that  meets  the  needs  of  today’s  families,  balanced  with  the
needs  of  employers.  This  offers  the  opportunity  to  modernise  the  outdated  legislation,
remove  rigidity,  and  simplify  the  scheme’s  administration.  A  full  review  would  take  longer
than a targeted change.
29.  Additional  information  on  areas  of  the  parental  leave  system  that  impact  on  flexibility  and
choice, and some international examples of changes made to increase flexibility, are outlined
in Annex three.
Next steps
30.  We  would  like  to  talk  with  you  about  your  goals  and  preferred  approach  to  parental  leave
policy.  This  discussion  will  inform  further  advice  to  you  about  this  work  programme.  Some
key questions we would like to discuss during this conversation are:
•  Is  there  more  information  you  would  like  to  receive  about  a  particular  aspect  of  the
parental leave scheme?
•  What outcomes would you like from the parental leave scheme?
•  What sort of flexibility do you want parents to have? Do you want to introduce flexibility
for  the  sharing  of  parental  leave  payments,  or  increase  flexibility  for  the  scheme  as  a
whole?
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•  Do you have key priorities we should consider in preparing advice on options?
•  How should we prioritise work on parental leave, relative to your other planned work in
the Workplace Relations and Safety portfolio?
Annexes
Annex One: Overview of the parental leave scheme
Annex Two: Administration of the parental leave scheme
Annex Three: Changes to increase paid parental leave flexibility in other jurisdictions
Annex Four: OECD comparison of weeks of parental leave

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Annex One: Overview of the parental leave scheme
Job-protected leave
1.  Job-protected leave requires the employer of eligible parents and primary carers to allow  their
employee to take time away from work to care for a new child, with up to 52 weeks of unpaid
employment-protected  leave.  This  can  be  shared  between  eligible  parents  or  caregivers.
Partners are entitled to up to two weeks of unpaid leave.
2.  There is complete job protection for the first four weeks for every employee on parental leave.
After  four  weeks,  the  job  must  be  kept  open,  unless  it  is  a  key  position12  or  redundancy
situation. In cases of redundancy or the employer defining the job as a key position, the person
on parental leave will go into a 26 week 'period of preference' at the end of their parental leave
and  must  be  offered  any  available  jobs  that  are  similar  to  their  previous  job  before  these  are
offered to anyone else.
3.  Eligibility for job-protected leave requires firstly that an employee is the primary carer of a child.
To be a primary carer, an employee must be either:
•
a female (biological mother) who is pregnant, or has given birth to a child within the last
year
•
the  spouse  or  partner13  of  a  female  who  is  pregnant,  or  has  given  birth  to  a  child,  and
who has had parental leave payments transferred to them
•
a person, other than the biological mother or her spouse or partner, who takes permanent
primary responsibility for the care, development, and upbringing of  a child who is under
the age of six.
4.  Secondly, the primary carer must have worked for the same employer, for either:
•
at  least  an  average  of  10  hours  a  week  in  the  six  months  immediately  preceding  the
expected  date  of  delivery  of  the  child  (if  a  child  is  to  be  born  to  an  employee  or  their
spouse or partner), or assumption of responsibility for the care of the child (in any other
case), which entitles them to 26 weeks of primary carer leave
•
at  least  an  average  of  10  hours  a  week  in  the  12  months  immediately  preceding  the
expected  date  of  delivery  of  the  child  (if  a  child  is  to  be  born  to  an  employee  or  their
spouse or partner), or assumption of responsibility for the care of the child (in any other
case), which entitles them to 26 weeks of primary carer leave and an additional 26 weeks
of job-protected leave.
Parental leave payments
5.  Parental leave payments (payments) provide financial support during the time away from work,
Released under the Official Information Act 1982
providing  eligible  parents  and  primary  carers  with  up  to  26  weeks  of  government-funded
payments. Payments are at the rate the person would usually be earning, up to a maximum of
$712.17 gross per week (this was increased from $661.12 gross per week on 1 July 2023).
6.  Employee  eligibility  for  payments  has  the  same  requirement  that  a  person  is  a  new  primary
carer of a child. The employment criteria is also similar to that for job-protected leave described

12 An employer must prove that a temporary replacement is not reasonably practicable, due to it being a key position within the
business. In determining whether a position is a key position, the employer may have regarded to the size of their business and the
training period or skills required for the role.
13 Partner means the spouse or partner of the mother or nominated primary carer, male or female, same sex or different sex.
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above  but  the  employment  included  in  calculations  for  this  test  can  be  with  more  than  one
employer and does not have to be continuous employment.
7.  Somebody who has changed employers within six months of their child being born or who has
multiple  employments may  not  be  eligible  for  job-protected  leave from  any  of  their  employers
but may be eligible for payments if they stop working. This person can request negotiated carer
leave from their employer, and this request can only be rejected on specified grounds.
8.  Self-employed  people  may  be  eligible  for  payments,  but  are  not  covered  by  leave  provisions.
To receive payments, they must stop working for the period they are receiving payments, other
than  occasional  administrative  and  oversight  duties.  To  be  eligible,  a  self-employed  person
must  have  been  working  in self-employment  for at  least  an  average  of  10  hours  a  week  over
any 26 of the 52 weeks before the expected date of delivery of the child, or the date where they
become  the  primary  carer  of  the  child.  The  same  maximum  payment  rate  applies  to  both
employees  and  self-employed  people,  but  there  is  also  a  minimum  payment  rate  for  self-
employed  people,  which  is  set  at  10  hours  of  the  minimum  wage  (currently  $227  gross  per
week).
9.  In cases of whāngai14, surrogacy and adoption, one parent elects to be  the ‘primary carer’ for
the purposes of parental leave payments, and this carer can transfer their entitlement to their
spouse or partner (who also meets eligibility criteria) if they wish.
10. The ability to elect the primary carer does not exist  for biological mothers and their spouse or
partner. If the biological mother is not eligible for payments, then the spouse or partner cannot
elect to become the primary carer to receive payments as there is no entitlement to transfer.
Uptake of parental leave payments and length of parental leave is increasing
11. Significant  policy  changes  after  2015  were  followed  by  increases  in  the  number  of  people
accessing parental leave payments. Changes in the number of weeks of entitlement, as well as
the  introduction  of  shared  extended  leave  between  parents,  improving  the  eligibility  for
employees with multiple jobs, and entitlement to preterm baby payments, have been followed
by increased participation in the scheme.
12. On average, recipients of parental leave payments were receiving 90 per cent of the maximum
rate in 202115. Payments were received for approximately 18 weeks (four months),  increasing
from an average of 12.5 weeks in 2003.
The parental leave scheme interacts with other government support
13. Parental leave payments and job-protected leave interact with other systems and are part of a
suite of tools across the tax, welfare and education systems that support families. In addition to
t Released under the Official Information Act 1982
he  parental  leave  scheme,  the  government  provides  a  range  of  financial  support  to  help
caregivers  raise  young  children.  Entitlements  are  based  on  family  income  and  family
circumstances. The support includes:
•  Working  for  Families  Tax  Credits  including  Best  Start,  a  payment  of  $69  a  week  for
eligible families supporting a new baby.

14 Whāngai is the Māori tradition of children being raised by someone other than their birth parents, usually a relative. Whāngai usually
involves a child being raised by its whānau or extended family.
15 The average recipient received a payment of $558 per week in 2021, when the maximum payment was capped at $621.76.
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•  Main  benefits,  such  as  Jobseeker  Support,  Supported  Living  Payment,  Sole  Parent
Support,  and  Young  Parent  Payment,  provide  additional  support  if  the  recipient  has  a
child or children.
•  Orphan’s Benefit and Unsupported Child’s Benefit.
•  Disability Allowance and Child Disability Allowance.
•  Caregiver Allowance.
•  Childcare Subsidy.
•  Early Childhood Education subsidy.
•  Early Learning Payment.
•  Accommodation Supplement.
•  Winter Energy Payment.

Released under the Official Information Act 1982
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Annex Two: Administration of the parental leave scheme
IR  administers  parental  leave  applications  and  payments  while  MBIE  has  policy
responsibility and dispute resolution functions
1.  MBIE delegates its paid parental leave administrative functions to IR. Applicants apply to IR for
parental leave payments and contact IR if they disagree with a decision. On occasion, IR will
refer a case through to MBIE for a decision, as MBIE holds policy responsibility for the Act. If a
dispute is unresolved, a Labour Inspector may be involved. A dispute that remains unresolved
may go to the Authority for a determination.
2.  Although  IR  administers  the  scheme, MBIE  is  a  party  to  all  litigation  about  the  Act  relating to
administrative decisions, including the Authority's review of decisions made by both MBIE and
IR. In a significant proportion of the Authority determinations about the Act, parents seek that
the  Authority  exercise  its  relatively  wide  discretion,  on  the  grounds  of  equity,  to  modify  or
reverse decisions made by IR or MBIE that were based on technical interpretations of the Act.
3.  MBIE  and  IR  officials  keep  in  regular  contact  about  the  operation  of  the  Act,  and  identify
opportunities  for  non-legislative  improvements,  such  as  communications,  systems  and
processes,  to  keep  the  Act  working  as  smoothly  as  possible.  The  Memorandum  of
Understanding  that  governs  how  IR  shares  information  with  MBIE  for  these  purposes  was
updated recently.
The rates of payment are adjusted every year
4.  Parental  leave  payment rates  are  adjusted  on  1 July  each  year  in  accordance  with  a formula
set  out  in  the  Act  (based  on  wage  growth).  If  there  is  a  downward  percentage  movement  in
wages, there is no adjustment in the rates of payment. Officials will brief you in advance of this
change, but there is no discretion in the Act for the Minister for Workplace Relations and Safety
to decide the annual rate adjustment.
5.  On  1  July  2023,  the  maximum  parental  leave  payment  rate  for  eligible  employees  and  self-
employed parents increased from $661.12 to $712.17 per week, before tax - an increase of 7.7
per cent, reflecting the 7.7 per cent rise in average weekly earnings.
6.  The Minister for Workplace Relations and Safety is required to publish the adjusted maximum
rate for employees and self-employed people and the new minimum rate set for self-employed
persons.  MBIE  will  seek  your  agreement  to  publish  these  online  in  order  to  fulfil  this
requirement.
The parental leave payments appropriation
7.  Released under the Official Information Act 1982
Parental  leave  payments  are  part  of  Vote  Revenue,  for  which  the  Minister  of  Revenue  has
responsibility. Parental leave payments for 2022/23 were estimated at $630 million. The Budget
for 2023/24 parental leave payments is $677 million.16

16 The Treasury, Finance and Government Administration Sector – The Estimates of Appropriations for the Government of New Zealand
for the Year Ending 30 June 2023, B5 Vol 4, 286.
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Annex Three: Changes to increase paid parental leave flexibility in
other jurisdictions
1.
Australia,  Austria,  Japan  and  Quebec  have  increased  flexibility  in  their  paid  parental  leave
schemes,  each  in  different  ways.  These  jurisdictions  provide  examples  of  parental  leave
design  settings  you  could  consider  as  part  of  a  full  review.  Where  possible,  impacts  of  the
changes are included.
Australia
2.
In July 2023, Australia expanded paid parental leave laws so that either parent can make the
initial application for paid parental leave, and parents can access their entitlement in multiple
blocks.  Leave  can  be  taken  at  the  same  time  by  parents,  or  shared.  Requirements  that
parental  leave  must  be  taken  within  the  12  months  following  birth,  and  that  leave  must  be
taken  in  one  continuous  period,  were  removed.  Parents  can  take  leave  in  increments  as
small as one day at a time, while working flexibly around this17. It is too early to measure the
effect of these changes, but they are being welcomed as an "improvement" by most.
Austria
3.
In  2008,  Austria  moved  from  offering  a  flat  payment  rate  for  36  months,  to  introducing  a
second option where parents could take less leave while receiving the same total amount of
payment,  allowing  parents  to  decide  the  amount  of  time  away  from  work  and  income
replacement  rate  that  worked  best  for  them.  In  2010,  a  second  reform  further  increased
flexibility  and  also  raised  the  income-replacement  rate  significantly,  to  80  per  cent  of  usual
income. Each change was followed by an increase in the share of fathers going on parental
leave by about 10 to 20 per cent18.
Japan
4.
Japan  had  a  generous  'Childcare  Leave'  scheme,  but  has  consistently  seen  low  uptake  by
men.  In  April  2022,  the first  phase  of  revised  Childcare  Leave  Laws  were  rolled  out.  Leave
can  now  be  taken  in  two  periods  and  the  requirement  that  the  entitlement  be  used  by  the
child's  first  birthday  has  been  removed.  Flexible  "postpartum  paternity  leave"  of  up  to  four
weeks  has  been  introduced, ring-fenced for  male  employees,  and  must be  used  in the first
eight  weeks  postpartum.  A  Ministry  of  Health,  Labour  and  Welfare  study  of  over  3,000
workplaces  found  eligible  men’s  uptake  of  childcare  leave  increased  by  3.16  per  cent  to
17.13  per  cent  in  2022,  Japan’s  highest  ever  rate.  The  Government  plans  to  increase
subsidies  offered  to  small  and  medium  business  that  offer  "support  allowances"  for  the  co-
workers  who  cover  the  work  of  the  person  who  has  taken  parental  leave,  to  address  a
workplace culture that discourages the taking of leave19.
QueReleased under the Official Information Act 1982
bec
5.
In 2006, the Canadian province of Quebec brought in its own parental leave system, the
Quebec Parental Insurance Plan (QPIP). QPIP gave parents higher payment rates than the
rest of the country (75 per cent of usual income), offered more flexibility for sharing leave,
such as taking leave simultaneously, and instituted a "daddy quota" of five weeks’ paid leave
ring-fenced for fathers and partners on a use-it-or-lose-it basis. Usage of parental leave by

17 Paid Parental Leave Scheme Employer Toolkit (servicesaustralia.gov.au).
18 Ziegler, L and Bamieh, O. (2023). When fathers take parental leave: The role of financial incentives and flexibility, , Centre for
Economic Policy Research.
19 Tochibayashi, N and Kutty, N (2023). Could Japan’s paternity leave policy narrow the gender gap?, World Economic Forum.
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eligible fathers increased over 250 per cent. Over 90 per cent of fathers in Quebec now take
paternity leave, compared with around 20 per cent of eligible fathers in the rest of Canada20.

Released under the Official Information Act 1982

20 Beaupre, P. (2021). Family Matters: Parental Leave in Canada, Statistics Canada.
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Annex Four: OECD comparison of weeks of parental leave
1.
The chart below shows the number of weeks of reserved (earmarked for mothers, or earmarked for fathers) and shareable statutory paid leave
entitlements across OECD countries, in 202221.
New Zealand

2.
New Zealand law provides 26 weeks of payments, which is 43 per cent of the OECD average of 61 weeks of entitlements. The OECD notes
that “[t]his indicator provides an overview of parental leave systems across OECD and EU countries. Parental leave systems are diverse and
individual systems do not always fit neatly into classifications suitable for international comparison.”
Released under the Official Information Act 1982

21 OECD Family Database, Parental leave systems, http://www.oecd.org/els/family/database.htm
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3.
In  addition  to  issues  around  the  classification  of  leave  entitlements,  international
comparisons of leave systems are affected by other issues:
•  Comparisons  do  not  capture  the  different  uptake  rates  of  the  various  entitlements.  In
some  countries,  societal  norms  and  culture  may  act  as  an  effective  barrier  to  taking  up
leave  entitlements  for  some  parents.  For  example,  Japan  offers  a  generous  father-
specific  paid  leave  entitlement,  but  only  a  low  per  cent  of  new  fathers  in  Japan  take
advantage  of  the  leave22.  As  a  result,  while  the  information  above  reflects  what  is
technically on offer to parents, statutory entitlements may say little about what is actually
taken up.
•  State  and  local  governments  sometimes  provide  alternative  entitlements  and  additional
financial  support  for  parents  on  leave  that  differ  from  federal  settings.  These  local
variations  are  not  included  in  the  OECD  data,  which  results  in  the  United  States’  leave
recorded as zero weeks’ leave.
•  Employer-funded  top-up  payments  (over  and  above  the  statutory  minimum)  are  not
included  in  the  chart.  Practices  differ  across  businesses,  sectors  and  countries,  but  in
many OECD countries these payments are substantial23. As a result, the chart above will
in some countries underestimate the actual amount that parents receive.
•  Leave benefits in some but not all countries may be subject to taxation and may count
towards the income base for social security contributions. As a result, the actual amounts
received by the individual on leave may differ from those shown above, depending on the
rules  for  and  rates  of  taxation  in  the  given  country.  For  instance,  New  Zealand’s
payments  are  subject  to  taxation  and  other  deductions  such  as  student  loan  or  child
support payments.
Notes on OECD data
4.
Information refers to paid birth-related leave entitlements to care for young children in place
as of April 2022, such as maternity, paternity, home care and parental leave.
5.
Periods  labelled  “earmarked  for  mothers”  and  “earmarked  for  fathers”  are  individual,  non-
transferable  entitlements  for  paid  employment-protected  leave  of  absence  for  employed
parents, or periods of an overall leave entitlement that can be used only by one parent and
cannot  be  transferred  to  the  other,  as  well  as  any  weeks  of  shareable  leave  that  must  be
taken by one or both parents for the family to qualify for “bonus” weeks of parental leave.
6.
Weeks  of  shareable  leave  refer  to  parental  and  home  care  leave  entitlements  that  can  be
freely shared between mothers and fathers.
7.
Released under the Official Information Act 1982
For Japan, the 44 weeks of the individual parental leave entitlements for the mother must be
taken  simultaneously  with  the  father  if  both  parents  are  to  use  the  entirety  of  their
entitlements.

22 Tochibayashi, N and Kutty, N (2023). Could Japan’s paternity leave policy narrow the gender gap?, World Economic Forum.
23 Crayon, (https://www.gocrayon.com/) a New Zealand business, provides a searchable database of New Zealand businesses’ parental
leave policies, information for parents and employees, and financial planning services for parents.
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