18 Aug 2013

New maternity leave scheme

2 Comments Australia, Move to Sweden, Sverige vs Australia

The Australian election is coming up next month and today the opposition leader Tony Abbott revealed a new controversial maternity scheme. The Coalition’s scheme will provide mothers earning up to $150,000 with 26 weeks (6 months) of paid parental leave, at their actual wage or the national minimum wage (whichever is greater), plus superannuation (to a maximum of $75,000). Fathers will be eligible for two weeks out of the 26 weeks with the same conditions. In contrast, Labor’s parental leave scheme is paid at 18 weeks minimum wage (a maximum of $11,200). The new scheme will apply for each baby born after July 1, 2015 under an Abbott government.

maternity leave

The Coalition’s paid parental leave scheme will result in a woman earning the average full time salary of around $65,000 receiving $32,500 – and they will be around $21,300 better off under the Coalition’s scheme relative to Labor’s scheme.

Importantly, the Coalition’s paid parental leave scheme also includes superannuation. For example, a woman earning $65,000 who has two children when aged 26 and 29, will be around $50,000 (in today’s dollars) better off in retirement than under Labor’s scheme, which does not include superannuation.

The Coalition’s paid parental leave scheme will be administered through the Family Assistance Office and fully funded through a 1.5 per cent levy on companies earning more than $5 million in taxable income. This will affect only around 3,000 companies – less than one out of every 200 companies in Australia.

Those companies required to pay the levy will have this offset by the Coalition’s previously announced 1.5 per cent company tax cut.

Finally Australia is catching up, that’s how it should work! I know my standards are high given that the parental leave system in Sweden is very generous, one of the best in the world. In Sweden parents are entitled to a total of 480 days (16 months) paid leave per child, with both mothers and fathers entitled and encouraged to share the leave (sexual equality is important :)). If you happen to have twins your also entitled to an additional 180 days. Your also entitled to begin your maternity leave 60 days prior to your due date and the leave can be taken at any time until the child reaches the age of seven.

The principle is that you split the days in half, but that the father can donate part of his leave to the mother, or vice versa and it is possible for one parent to take up to 420 days of the total leave. The remaining 60 days are then reserved for the other parent. The only exception to this rule is for single parents with sole custody. In these cases, the parent can take all 480 days leave. In addition to the 480 days the father is also (during the first 3 months of the babies life) entitled to be home for 10 days.

For the first 390 days you’re entitled to 80% of your salary up to a capped limit of 910 SEK a day (approx 150 AUD). The rest of the 90 days you get a minimum wage of 180 SEK per day (approx 30 AUD). If you have not been earning money in Sweden prior to your child’s birth, you are still entitled to parental benefits, paid at the basic level of 180 SEK per day.

Same as in Australia, the employer does not cover the cost of the parent leave benefit instead it’s paid out by the state, through the Swedish Social Insurance Administration (Försäkringskassan).

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2 Responses to “New maternity leave scheme”

  1. Reply Lovisa says:

    Awesome! Hoppas att de håller sig vid det för situationen som det är nu sux! Man måste förlita sig nästan helt på mannens inkomst!

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