Over the weekend, there were calls to means-test paid parental leave.
1) Let us be very clear: if it’s means-tested, it’s not paid parental leave, it’s a different form of assistance. Paid parental leave is not a benefit. It’s not paid to people who are unable to work by reason of sickness, old age, or injury. It’s paid to people who are working, whose work contributes to society, and who would otherwise be unremunerated.
2) We already effectively have mean-tested top-ups to paid parental leave: working for families.
3) When it comes to mean-testing at this stage of life, it is impossible to compare like with like. Does the income-earning parent have student debt? Do the parents own their own home? How big is the mortgage? Where in the country do they live, what is the rental market like? How much assistance are they receiving from their extended families? How many kids do they have?
4) It’s not clear what exactly would be means-tested. The income of the mother before the leave starts? The assets of the couple? Means-testing based on the partner’s wage is the best targeted, but it is a giant step backwards for feminism – the financial independence of women is a significant rationale for universal paid parental leave. The people who receive paid parental leave aren’t earning other income.
5) Where would the means-tested threshold lie? It’s easy for the very wealthy to say “I don’t need it” – but as soon as something is means-tested, there will be people who could really use it who would miss out. There would also be complex abatement calculations to deal with. It would be an administrative nightmare.
6) What does it mean to “need” paid parental leave payments? My payments ended last week, and I’m planning to take eight further months off work. We’ll be ok on my husband’s income, but we’d be noticeably better off if my paid parental leave continued. It’s difficult to say whether someone needs extra cash. One person’s necessity is another person’s extravagance. There is a clear need in this picture though – the need of babies for attentive, loving care. The future of the human race literally depends on it. No matter what the financial situation of the parents, providing that care is worthy of social support.
7) The current payment is $488 per week. It’s not even remotely close to the lost income of a worker on the median wage. The wealthy do not benefit more from paid parental leave than the poor. Under some schemes they would, but under the New Zealand scheme all full-time workers receive the same payment. Those on lower incomes therefore receive a higher proportion of the lost income. It’s already a progressive scheme.
8) We don’t means-test every other form of government assistance. We don’t means-test ACC, and we don’t means test NZ Super. We don’t means-test workplace provisions like sick leave, bereavement leave, and holiday leave. We consider these to be entitlements, not benefits. If there is anything that fits into this category, surely it should be the one form of leave from paid employment during which you work more than a 40 hour week doing something difficult, arduous, and essential?
I think I ask too many rhetorical questions when I’m irritated.