Who pays for double dipping in paid parental leave?


By Peter Strong . On 24-Oct-2016


There are several ways of working out who pays for the double dipping in paid parental leave (PPL). But first of all we should spell that we are not against PPL if a business can afford it. It is a good thing.

So just what is the double dipping of PPL? Most big businesses and all government agencies have PPL as part of the conditions they offer their employees. For example a person in the public service will normally get at least 12 weeks leave at full pay after they have a new child. Someone at Coles will get 10 weeks full pay.

The government has had in place for some years a publicly funded PPL for all eligible workers which is currently $672.60 per week before tax for a maximum of 18 weeks ($12k). This is equal to the national minimum wage and is taxable.

Double dipping is the fact that a person can get both the PPL from their employer and PPL from the government.

Is this a bad thing? Not if you’re the family of a person who gets both payments. That person is a winner. If you are a family who does not get both payments you are left out.

Was that the intent of the government funded PPL scheme when it was introduced? I doubt it. Let’s consider who pays for the leave and who does and does not get both payments – the double dipping.

Those who work in a job where there is an employer funded PPL as part of their employment conditions get paid twice – the so called double dipping.

Those who work as an employee where there is no PPL in their employment conditions get the time off but do not get paid by their employer, and they only get the government payment. This happens nearly always in small and medium businesses who cannot afford the extra payment. There are over 6m people working in small businesses in Australia.

Self-employed people are PPL losers, they are rarely eligible for PPL and very rarely receive any payments. There are about 3m self employed people in Australia at least 900k are women. At least 60k of them are pregnant at any given time.

So we can see that those who get paid twice are those employees in big business or who work for federal, illness state or local governments.

Who pays for PPL? Where does the money come from to cover the leave? It can only come from two sources – either the government or big businesses in the private sector.

So the normal citizen is the ultimate source of the PPL either as a customer of business or as a taxpayer. It seems that some taxpayers get more return for their taxes than others. Some taxpayers – those employees in small business and their employers, pay twice for some people on PPL while they paid once if at all.

If that seems wrong it is because it is wrong. It appears we have a privileged class which is those who work in big business and for the government. We also have a lower class, those who work for small business or for themselves.

Is this discrimination against women? It is definitely discrimination against the women that work in small business or for themselves. They get less than the women who work in big businesses and for the government.

There are two solutions to this problem. Either don’t pay those who already get employer funded PPL or pay those only eligible for the government subsidy an equivalent of their normal pay for an extra period of 13 weeks.

There will be those who say that small businesses should offer PPL. This doesn’t work for any number of reasons but if they did pay then a small business person’s family will likely suffer as they have to find money to pay the PPL as well as cover for the person on PPL. That doesn’t work and only those who have never run a business will propose such a response.

What about the self-employed? How will they get two payments? Being the backbone of the economy do they deserve such consideration? Yes they do but as always we, the self employed, are not considered.  Female self employed are considered even less than the males. Fix this by fixing the double dipping and then dealing with the needs of the people who employ over 6m other people – the self employed.

About the author

Peter Strong

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