'Employers could lift wages to maximise paid parental leave'
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Version 0 of 1. As Tony Abbott’s paid parental scheme came under sustained attack from all sides, a tax expert suggested small businesses, including family businesses, could raise incomes to employees before they were pregnant to increase paid parental leave (PPL) payments. A senior taxation manager with the National Tax and Accountants Association (NTAA), James Deliyannis, said because the leave scheme was based on individual income, small business had the flexibility to restructure payments to employees, including family members. By distributing more income to an employee for the year before a planned pregnancy, the business would be able to maximise payments to the employee because the scheme matches incomes of up to $50,000 over six months. Deliyannis, who runs taxation schools for the NTAA, said accountants would be advising clients on structuring their affairs once the legislation was released but it was a valid point that small business had flexibility to increase individual incomes to receive maximum payments. “Smaller businesses have more flexibility to restructure income and make payments to family members and it may be advantageous, but I am sure there will be anti-avoidance rules about manipulating income,” he said. The scheme has come under sustained attack from government members of the National party, with senators Ron Boswell, John Williams and Barry O’Sullivan threatening to vote the bill down in the Senate. Liberal senator Ian Macdonald has also been highly critical. Liberal MP Angus Taylor said that while increasing workforce participation rates was critical to Australia’s capacity to repay debt, “We shouldn’t be doing paid parental leave at the expense of good childcare policy.” The Productivity Commission is reviewing childcare policy and early childhood learning and some critics of the prime minister’s signature policy have suggested that workplace participation will not improve without better childcare options to follow the PPL. National MP George Christensen told ABC radio on Wednesday that the PPL was “money for jam”; his colleague John Williams said he had not met anyone in the regions who supported the PPL scheme. “I think people are confused a little bit about why we’re doing that particular scheme which seems to just be money for jam,” Christensen said. “I think that, you know, if you’ve got the high level of income and the government’s going to supplement six months of your wage then you know there’s a lot of people questioning why that’s actually transpiring and why we’re putting one value on one particular baby and then another dollar value on another particular baby.” The opposition leader, Bill Shorten, questioned whether the PPL bill would “see the light of day”. The scheme will be opposed by the Palmer United party, unless there is a uniform level of payment for all women, and by Labor. The Greens have supported the government principle of parental leave as a workplace entitlement but are reserving judgment until the draft policy is released. On Tuesday, the treasurer, Joe Hockey, said Abbott’s paid parental leave scheme would be a boon for regional Australia, including farmers and small businesses. “It is a massive win for farmers who don’t have paid parental leave schemes,” he said. “Farmers are self-employed and for a lot of the mums in a farming household, they don’t get paid parental leave, and now they’re going to have replacement wages and superannuation.” But under the current PPL scheme, working women, including in farming business, receive the minimum wage for 18 weeks, or $622 a week before tax. Under the government’s proposed policy, PPL payments would be made to working women for 26 weeks’ leave based on their individual salaries up to $100,000, down from Tony Abbott’s original promise of $150,000. Abbott’s office confirmed that the “work test” would remain the same as it is now, as introduced by the Labor government. However, any further detail has yet to be revealed. The current work test requires women to have worked for at least 10 of the 13 months before the birth or adoption of a child to qualify for the payment. Women need to have worked 330 hours in the 10-month period, which equates to a minimum of just over one day a week with no more than an eight-week gap between working days. A working day qualifies if you have worked for at least one hour. The rules cover part-time workers, casuals, seasonal workers, contractors, the self-employed, multiple employers, overseas work, jury service, defence reserves and workers under periods of compensation or accident insurance. The acting prime minister and Nationals leader, Warren Truss, said the government was consulting the National Farmers Federation and rural women’s groups to work out how to compensate farm families for work which may not be paid. Such work is covered by the current work test rules. “If you work for a family business, you can include your hours of work even if the business is not making any income, providing you are doing the work for financial gain or benefit,” the government’s work test website says. A spokeswoman for the prime minister said women in farm businesses would be covered under the current work test. “The consultation we are currently undertaking with relevant stakeholders (National Farmers Federation, National Rural Women’s Coalition and Women in Agriculture) is to ensure that we have the appropriate methodology in place for our paid parental leave scheme to ensure concerns for regional Australia are addressed,” she said. |