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Self-employed to qualify for paid parental leave

9 August 2005 Media Statement

Self-employed to qualify for paid parental leave

Self-employed mothers will be eligible for paid parental leave from July 2006 under legislation tabled in Parliament today, Associate Labour Minister Ruth Dyson said.

The Parental Leave and Employment Protection (Paid Parental Leave for Self-Employed Persons) Amendment Bill provides for 14 weeks paid parental leave from 1 July 2006 for self-employed mothers who have been working an average of 10 hours a week or more during either a six or 12 month period immediately before the birth or adoption of a child. Self-employed mothers will have the same right as employees to transfer this leave to their eligible partners.

Ruth Dyson said she was delighted to introduce a further extension to the government’s paid parental leave scheme.

“The bill reflects the Labour-led government’s commitment to provide paid parental leave for working families. It will extend coverage to a range of self-employment activity including the working arrangements of farming families. This is a significant step, giving practical, financial help to families where new mothers have been self-employed, and supporting positive health outcomes for both mothers and babies.”

Under the legislation, a self-employed person will be entitled to paid parental leave if they are engaged in more than one type of work consecutively, and/or if they have a break of 30 days or less between engagements. Like employees, they will be required to stop working while receiving payments. However, they will be able to maintain a level of oversight of their business during the leave period.

Parental leave payments for the self-employed will equal their average weekly income, up to the maximum rate paid to employees (currently $357.30 per week before tax). Those who make a loss or earn less than the minimum wage for at least 10 hours per week will be entitled to payments for 10 hours a week at the minimum wage (currently $95 per week before tax).

It is estimated that 2,173 self-employed parents will apply for paid parental leave each year.

The government extended paid parental leave from 12 to 13 weeks in December 2004, with a further commitment to extend it to 14 weeks in December 2005.

ENDS

QUESTIONS AND ANSWERS

PARENTAL LEAVE AND EMPLOYMENT PROTECTION (PAID PARENTAL LEAVE FOR SELF-EMPLOYED PERSONS) AMENDMENT BILL


THE BILL HAS NOT PASSED ITS FIRST READING OR BEEN REFERRED TO A SELECT COMMITTEE. BEFORE THESE ENTITLEMENTS COME INTO EFFECT, THE BILL MUST BE PASSED BY PARLIAMENT.

These questions only respond to material contained within the proposed Bill.

What does the Bill do?

The Bill extends paid parental leave from 1 July 2006 to self-employed mothers who give birth to a baby; and self-employed people who are the primary caregivers of an adopted child.

It provides for 14 weeks paid parental leave for eligible self-employed mothers if:

- the expected date of delivery of her child is on or after 1 July 2006; or

- the child is born on or after 1 July 2006.

It provides for 14 weeks paid parental leave for the self-employed in the case of adoption if:

- a person or their partner assumes the care of a child with a view to adoption on or after 1 July 2006.


Who will be eligible for paid parental leave?

To be eligible for paid parental leave a self-employed person must:

- be an expectant mother or adoptive parent;

- meet the definition of “self-employed”; and

- work for at least an average of 10 hours per week during the six or 12 months immediately before the birth or adoption of a child.


How much money will I be entitled to?

The maximum rate payable is the lesser of a self-employed person’s weekly earnings, or a rate equivalent to that paid to employees (currently $357.30 per week before tax).

The minimum rate payable is equivalent to 10 hours per week paid at the minimum wage (currently $95.00 per week before tax) in cases where a person meets the eligibility criteria but earns less than this amount per week.


Do I have to stop working to receive a parental leave payment?

Similar to employees, to be eligible for parental leave payments, the self-employed are required to take a break from work while receiving payments. However, unlike employees, the self-employed can maintain a level of oversight of their business during the parental leave period. A self-employed person will not lose his or her entitlement by continuing to receive income for work already done or carrying out occasional administrative tasks performed during the paid parental leave period.


Can I transfer parental leave payments to my partner?

Parental leave payments can be transferred to a partner who may either be an eligible self-employed person or an eligible employee. Similarly, an eligible employee will be entitled to transfer payments to a partner who may either be an eligible employee (as is the existing situation) or self-employed person.


Will I be entitled to paid parental leave if I don’t have continuous self-employment?

A self-employed person will be entitled to paid parental leave if they are engaged in more than 1 type of work consecutively and there is a break between engagements that is 30 days or less.


I have two businesses, can I take paid parental leave from both of them?

The Bill provides that that self-employed person can apply for paid parental leave from more than one business. Two businesses are treated as one engagement for the purpose of paid parental leave entitlements.


How and when do I apply for paid parental leave?

The Bill must first be passed by Parliament before a person can apply for parental leave payments. If passed by Parliament, further information about when to apply will be available from the Department of Labour’s website at www.ers.dol.govt.nz


Can I make a submission on the Bill?

The Bill has been introduced, but has not yet passed its first reading or been referred to a select committee. Further information about how and when to make a submission on legislation is available at www.parliament.govt.nz

I’m an employee, am I entitled to paid parental leave?

Employees (including shareholder employees) who meet the criteria in the Parental Leave and Employment Protection Act are already entitled to paid parental leave. More information about entitlements is available at www.ers.dol.govt.nz


Will the content of the Bill change?

The content of the Bill could change before being passed by Parliament. The Bill has been introduced, but has not yet passed its first reading or been referred to a select committee.

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