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Paid Parental Leave for self-employed start 1 July

Paid Parental Leave for self-employed starts 1 July

The maximum rate will also increase from this day.


Self-employed parents will be eligible for 14 weeks paid parental leave from this Saturday, bringing greater flexibility and equity to the workplace and additional support for working parents, says Minister of Labour Ruth Dyson.

Paid parental leave for employees has been available since 2002, and will now be extended to a range of self-employed people including farming families. The rate will also increase from a maximum of $357.30 to $372.12 per week (before tax).

"The new law will make it easier for self-employed parents to look after newborns or newly adopted babies, and reflects the Labour-led government's commitment to supporting working families," says Ruth Dyson.

"We estimate that the new rules will allow over 2000 more families to benefit from the Paid Parental Leave scheme each year.

"The Labour-led government is committed to strengthening New Zealand families, and to valuing the role of parents. Paid parental leave gives families choices and enables them to spend time with their newest members while also removing the financial pressure to go back to work too soon," says Ms Dyson.

Like employees, self-employed women will be able to transfer part or all of their paid parental leave to their eligible partners. Their eligible partner may be either self-employed or an employee.

Self-employed parents will have to stop working while receiving payments, but will be able to maintain a level of oversight of their business which means they will be able to complete occasional and administrative tasks in their business.

In another amendment, both employees and the self-employed will be eligible for a subsequent period of paid parental leave if their expected date of delivery or adoption is at least six months after they return to work from previous leave, down from 12 months at present.


Background: Paid parental leave

Payments will equal the self-employed parent's average weekly earnings over the past six or 12 months, up to a maximum of $372.12 a week before tax - the maximum currently paid to employees on paid parental leave.
Those who make a loss or earn less than the minimum wage for at least 10 hours work a week will be entitled to payments for 10 hours a week at the minimum wage (currently this payment would equate to $102.50 a week before tax).

For the self-employed

 The new law applies to those whose baby is due or born on or after 1 July 2006, or who start caring for a child under the age of six they intend to adopt on or after 1 July 2006.
 To be eligible for paid parental leave, self-employed mothers will have been working an average of 10 hours a week or more for either six or 12 months before the expected date of birth of their child.
 To be eligible for paid parental leave, a parent intending to adopt a child under the age of six will have been working an average of 10 hours a week or more for either six or 12 months before the date they or their partner assume care of a child with a view to adoption.

For employees

Paid parental leave for employees was introduced in 2002. More than 77,500 employees have already benefited from the scheme since then.
 The Department of Labour commissioned Gravitas Strategy and Research in 2003 to evaluate the implementation of the paid parental leave scheme for employees. This concluded that implementation had been smooth with paid leave easily accessible, and the impact on business had been predominantly positive or neutral.

Other government initiatives helping working families

The extension of paid parental leave to the self-employed adds to other Labour-led government initiatives to assist working families. These include the Working for Families scheme - which provides extra financial assistance to many thousands of New Zealand families; and an additional week's annual leave for employees from 1 April 2007.

Further information for self-employed parents is available on the Department of Labour website www.ers.govt.nz or by calling the Department of Labour's Workplace Contact Centre on 0800 20 90 20.


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