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How the paid parental leave scheme discriminates against small business owners

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Paid parental leave decision 'shocking'

As reported in January 2016, Prime Minister Malcolm Turnbull's policies leave '79,000 new parents... missing out on some of their paid parental leave,' says Opposition Leader Bill Shorten. Vision ABC News 24.

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Emily Green had her first baby two months before Christmas and the jewellery designer says she didn't have any option but to keep on working and take her baby with her.  

"For us that's a really busy time of the year with all the markets and leading up to Christmas," Green says. "When you are a small business owner you just don't get to take a break."

The reasons they say they want people to take parental leave from day dot is things like bonding, but you can't tell me when to bond with my child. 

Tess McCabe

When Green tried to take parental leave after Christmas her claim under the government's paid parental leave scheme was rejected.

Emily Green feels she had no choice but to keep on working in the pre-Christmas period when her child was born.

Emily Green feels she had no choice but to keep on working in the pre-Christmas period when her child was born. Photo: Wayne Taylor

The scheme allows for 18 weeks of leave for mothers paid at the minimum wage but the leave must be taken before returning to work, a requirement that is impractical for many small business owners like Green.

It's challenging enough running a business

Emily Green's business employs a staff of five and turns over an estimated $300,000 a year so Green says while she hired a studio manager to cover her "there are always things you need to do".

Tess McCabe's application for PPL was rejected.

Tess McCabe's application for PPL was rejected. Photo: Pat Scala

"I guess part of it is ignorance of the system but I just feel there is no way to inform yourself of the rules," Green says. "I thought you were allowed to take that time any time during the first year of the baby's life."

Green says that when you are self-employed it is virtually impossible to take a clean break from your business when your baby is born.

"I feel that it is challenging enough to run a business and cope with that shift in lifestyle once you have a child," she says. "I was surprised but you just have to suck it up."

Prue Gilbert says the PPL scheme is discriminatory.

Prue Gilbert says the PPL scheme is discriminatory. Photo: Supplied

Do they not want women back in the workforce?

Tess McCabe also had her application for PPL under the government scheme denied. 

McCabe runs her own graphic design business and when she had her second child, based on her experience with her firstborn sleeping a lot in the first weeks of his life, she tried to keep on working and planned to take the leave a few months in. 

"I thought I would just take it some time in the first year and I thought it was within the rules; it turns out it wasn't," McCabe says.

"Because I was technically still working on my business for two hours a week I wasn't allowed this parenting payment," McCabe says. "It really frustrated me because it's just unfair and dumb."

McCabe, who also hosts parenting and business podcast The New Normal, says she believes accessing the PPL scheme is a real problem for sole traders, freelancers and small business owners.

"What do they want – for women not to get back into the workforce?," she says.

It's different for men

To add to the confusion the government scheme applies differently to men. 

McCabe's partner was able to claim a Dad and Partner Pay payment for two weeks' pay at the national minimum wage at any time within the first year of the babies' birth.

A spokesperson for Social Services Minister Christian Porter says the Dad and Partner Pay scheme "has a different objective to the PPL scheme and is not considered discriminatory". 

A 'discriminatory' scheme

​Prue Gilbert, founder of The Grace Papers, advises women on returning to work after having children and says the government's PPL scheme needs to be more flexible. 

"The reality is that it is discriminatory against business owners," she says. "When you are running your own business you need to be given the autonomy to make the decisions that are in the best interests of you and your baby."   

But Porter's spokesperson denies the scheme is discriminatory. 

"The PPL scheme allows people who are self-employed to do some work, as long as it is about overseeing the business or an occasional administrative task, such as paying an account or checking the delivery of an order," the spokesperson says. "This reflects the reality that some tasks are still needed to ensure the business can continue during their leave period."

However, if a self-employed person continues to do regular work within their business to earn an income they are ineligible for PPL.

"This ensures the scheme treats everyone equally, whether they are an employee or self-employed," the spokesperson says. 

The spokesperson says the PPL scheme allows mothers to "enhance the health and development of the child and establish routines".

"The PPL scheme has been developed on the best available evidence which says it is important mothers have the opportunity to spend the first few months of a baby's life at home with them."  

McCabe gives this argument short shrift. 

"The reasons they say they want people to take parental leave from day dot is things like bonding, but you can't tell me when to bond with my child," she says. 

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31 comments so far

  • If you are not forced to have a baby it is then your choice

    Commenter
    Peter
    Date and time
    March 14, 2016, 7:34AM
    • The whole purpose of the PPL is to encourage women to have babies without losing out financially. What I am seeing is women having babies but they are keeping working and not losing out financially so they are not really eligible in my view.

      Commenter
      george
      Date and time
      March 14, 2016, 8:24AM
    • Stupid comment. Micalia Cash was right on the money when she said "social expectations and structures funnel people into "choices" that are not freely made". Women carry the burden of creating the next generation.

      Commenter
      Florence
      Location
      Sydney
      Date and time
      March 14, 2016, 8:48AM
    • George,

      One of these women missed out for working a measly two hours a week (and it sounds like she did this from home). You really think she's not missing out financially? This person was trying to keep their head above water and keep their small business going by doing some light duties while her baby was asleep. Would you rather she abandoned her business altogether and joined the ranks of unhappily-unemployed mums who can't get a fair look-in for a job?

      Peter... I just have no words for this. Of course having a baby is a choice. Are you saying women should just stop having babies altogether until we can get a fair leave scheme from the government? Might be waiting a while on that next generation if the time it took to get a PPL in the first place is any indication...

      Commenter
      Red Pony
      Date and time
      March 14, 2016, 8:51AM
    • "The whole purpose of the PPL is to encourage women to have babies without losing out financially."

      Welcome to a concept called "opportunity cost". These days having children is a choice. While children are social goods and taxpayers should expect to contribute to social services aimed directly at children such as health and education because that is a bonafide investment in the future inasmuch as our taxes pay for other social goods such as infrastructure, law and order, border control and so on.

      But parenthood is a private good because the socio-psychological benefits of parenthood -- such as baby's first smile or baby's first steps -- are consumed privately by soley by parents. Members of the public cannot access someone else's parental joy in the same was that they can benefit from a public road.

      In a fair society welfare payments are there to address social disadvantage, they are a hand up, not hand out. Welfare should not to address some confected, imagined inequity because demonstrably fecund middle class aspirant adults expect as zero-sum impact on their pre-natal consumption of adult discretionary goods.

      Oh -- and to pre-empt the usual howls of outrage because I have characterised children and parenthood as "goods": it is obnoxious to monetise parenthood in the first place but if that's where you want to go, then let's use monetary and economic terms eh?

      Commenter
      Nulligravida
      Date and time
      March 14, 2016, 11:23AM
    • So in other words...abortion should be decriminalised and free?

      Commenter
      QuickNote
      Date and time
      March 14, 2016, 12:18PM
    • @Red Pony To get a business established takes a lot of time an hard work. It's crazy to turn around and have a baby right in the middle of that. And then expect to have PPL when it suits you rather than for what it is intended for, to allow a mother time with her baby during it's first few months. Why wouldn't she be able to pick up the business again later? If your business is already established with staff why not just give yourself PPL? Anyway $11800 before tax doesnt' sound like much to miss out on anyway.

      Commenter
      george
      Date and time
      March 14, 2016, 2:23PM
    • You sound awfully ignorant of the issue. By your same suggestion you are not forced to goto university, but it is still subsidised. The whole idea of these types of payment is to encourage women to return to the workforce, so there is less burden on the welfare system. Anyway, any payment the government is made to the parent is more than paid back in taxes if they have a successful business.

      If you are suggesting we should all together stop having kids then you should kiss goodbye to any type of pension and medicare. You need younger generations to pay taxes to pay for the older retirees. Why don't you have a look at the case of China, where the ageing population is now proving to be a big headache for the government, they have eased the one child policy.

      Commenter
      Michael
      Date and time
      March 14, 2016, 2:42PM
    • +1 Peter
      Although prepare for the outrage and comments about being "childless" from people who think it's their right to be paid by the government to breed.

      Commenter
      Cmitch
      Location
      Syd
      Date and time
      March 14, 2016, 2:52PM
  • PPL is open to rorting and should be abolished.....

    Commenter
    Shane From Melbourne
    Date and time
    March 14, 2016, 8:14AM

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