Dad and Partner Pay: Implications for policy-makers and practitioners

CFCA Paper No. 12 – February 2013

International policy and practice

The governments of developed nations are deploying various solutions to increase parental time with children and achieve greater work-family balance. Policies and practices in Europe and North America, and how these impact on fathers' uptake of leave, are explored below.

By way of definition, "maternity leave" is generally available to mothers only and is usually understood to be a health and welfare measure, intended to protect the health of the mother and newborn child, to be taken just before, during and immediately after childbirth. "Paternity leave" is generally available to fathers only, usually to be taken soon after the birth of a child, and intended to enable the father to spend time with his partner, new child and older children. "Parental leave" is leave available equally to mothers and fathers, either as: a) a non-transferable individual right (i.e., both parents have an entitlement to an equal amount of leave); b) an individual right that can be transferred to the other parent; or c) a family right that parents can divide between themselves as they choose (Moss, 2011, p. 5).

Fathers' legislated leave

Countries differ markedly on the amount of leave they provide for new fathers. O'Brien (2009) summarised international leave entitlements for fathers into four categories:

  • extended leave with high-income replacement (80-90% of usual income) (Finland, Germany, Iceland, Norway, Portugal, Slovenia, Spain and Sweden);
  • short leave with high-income replacement (Belgium, Canada, Denmark, France, Greece, Hungary, the Netherlands);
  • short/minimalist leave with low (minimum wage) or no income replacement (Australia, Austria, Czech Republic, Estonia, Ireland, Italy, Poland, United Kingdom); and
  • no statutory leave (USA).

Extended leave with high income replacement

Portugal, Sweden, Norway and Iceland are examples of countries with extended leave and high-income replacement.

Portugal

In Portugal, fathers are entitled to an exclusive 20 days' paternity leave, 10 of which must be taken during the first month after a child is born or adopted. Parental leave is 15 weeks shared, plus an extra month if the leave is shared and not just taken in entirety by the mother. Parents are entitled to 100% of earnings over this period, however this drops to 80% if the leave is not shared (Broomhill & Sharp, 2012).

Sweden

Sweden was the first country to offer paid paternity leave, in 1974. At that time, the National Labour Market Board stated, "The right for men to take responsibility for their children on the same basis as women must be accepted and encouraged" (Arbetsmarknadsstyrelsen, 1977, cited in Haas & Hwang, 2009, p. 304). In Sweden, each parent has access to 2 months' paid leave at 80% of salary and 12 months' paid leave between both parents before the child turns 8 or finishes the first year of school. In addition, the family receives an "equality bonus" if the parents share the leave equally (via tax relief) (European Union, 2012).

Norway

In Norway, fathers have access to 12 weeks or 60 days of paid leave as a "paternal quota", to be used before the child turns 3 years old (Norwegian Labour and Welfare Administration [NAV], 2012). This leave is provided as a "use it or lose it" benefit; it cannot be transferred to the mother.

Iceland

In Iceland the government provides 3 months of paid leave for mothers, 3 months of paid leave for fathers and 3 months of paid leave for either the father or the mother (at 80% of an individual's existing wage rate). There is a further 13 weeks unpaid each year for each parent until the child reaches the age of 8 (European Commission, 2008).

Short leave with low/no income replacement

The United Kingdom, New Zealand and Australia are examples of countries with lower levels of father-specific leave and income replacement.

United Kingdom

Since 2003 in the United Kingdom, fathers have been entitled to 2 weeks of Statutory Paternity Pay, paid at 90% of earnings or approximately £135 per week (whichever is lower). To put this amount in context, the national minimum wage is £243.20 per week. In addition, both mothers and fathers/partners are entitled to take up to 13 weeks of unpaid parental leave per child, which is to be taken in blocks of no more than 4 weeks until the child turns 5 (Directgov, 2012). Additional Paternity Leave and Pay has been available to fathers since April 2011, which entitles them to a maximum of 6 months' additional paid paternity leave, which can be accessed once the mother has returned to work. This leave must be taken when the baby is aged between 20 weeks and 52 weeks.

New Zealand

In New Zealand, Paid Parental Leave is available to the primary carer for 14 weeks at equal rates to their pay prior to commencing parental leave but is capped at $475.16 per week (Inland Revenue, 2012). This amount is less than the minimum wage of $540 per week. Paternity leave of 2 weeks unpaid leave is available following 12 months of service to an employer, and 1 week is available following 6 months of service (Department of Labour, New Zealand, 2007).

Australia

Currently, Australia's Paid Parental Leave scheme provides up to 18 weeks of Parental Leave Pay at the rate of the national minimum wage ($606.50 per week before tax) for the primary carer (usually the birth mother). The primary carer may transfer some or all of their unused Parental Leave Pay to an eligible partner such as a father. Dad and Partner Pay, which was introduced on 1 January 2013, provides up to 2 weeks of pay at the rate of the national minimum wage. Under the Paid Parental Leave scheme, fathers or partners can receive up to 18 weeks of Parental Leave Pay, or a maximum of 18 weeks of Parental Leave Pay and Dad and Partner Pay combined if they become the primary carer. To receive Dad and Partner Pay a person must meet the scheme's work, income and residency test, be caring for their child, and be on unpaid leave (i.e., not on paid leave) or not working. Dad and Partner Pay complements the provision of unpaid parental leave under the National Employment Standards. Long-term employees are eligible to receive up to 12 months unpaid parental leave under the National Employment Standards. If both members of a couple are eligible for unpaid parental leave, they may take up to 3 weeks of their leave at the same time in the period immediately following the birth or adoption, or in the period up to 6 weeks after the birth or adoption with the agreement of their employer (Australian Government Fair Work Ombudsman, 2011a).

Impact of fathers' legislated leave on uptake

While a direct comparison between paternity-leave-rich countries and paternity-leave-poor countries is not feasible, some general observations can be made regarding the conditions that international research has shown to be most likely to increase uptake of paternity leave. Leave must be:

  • an individual (non-transferable) right;
  • highly compensated;
  • highly flexible; and
  • publicly promoted through government awareness campaigns (Featherstone, 2009; Fox et al., 2009; Smith & Williams, 2007).

All four countries detailed earlier with extended leave and high-income replacement meet at least three of the conditions described above.6

In Portugal, in the last year that parental leave was unpaid (i.e., 2000), fewer than 150 men took parental leave. Three years later, after Portuguese law was changed to give fathers 2 weeks of paid family leave ("daddy days"), the number of men who took up the leave rose to 27,000 (OECD, 2002). Men in Sweden make up a significant 25% of total parental leave recipients (compared to Australia, where women represented 99.5% of all Paid Parental Leave recipients). In Norway, 89% of eligible fathers take paternity leave (European Commission, 2008) and a review of Iceland's parental leave system and responses from other European countries found that 89.9% of eligible men applied for paternal leave in 2004 (European Commission, 2008).

By contrast, the UK Government has estimated that uptake of the Additional Paternity Leave and Pay (available from 3 April 2011) would be between 4 and 8% of eligible fathers (Department for Business Innovation & Skills [BIS], 2010). Smeaton and Marsh's (2006) study of 1,512 fathers across the UK found that despite a 2-week paternity leave entitlement, 20% of eligible fathers used none of it, relying instead on annual leave or other forms of leave. A later UK study by Chanfreau, Gowland, Lancaster, Poole, Tipping, and Toomse (2011) of 1,253 fathers found that 91% took time off after the birth of their baby. Seventy-three per cent of fathers who took some time off used paternity leave. Almost half took this time as paternity leave only and just over one-quarter took time off as a combination of paternity leave and other paid leave. Only half of the fathers who took some paternity leave took the full statutory length of 2 weeks.

In New Zealand in 2005-06, 82% of fathers took some sort of leave around the birth of a child, typically annual leave (58%) or another type of employer-funded leave (21%). Of those who took annual leave, 88% took up to 2 weeks. When considering total leave, 46% took up to a week and 38% took up to 2 weeks. Only 24% of fathers were aware that it was possible for mothers to transfer some or all of their paid parental leave entitlement to their spouse (Department of Labour, New Zealand, 2007).

To recap Australia's leave uptake, Martin et al. (2012) found that most fathers (or partners) who had access to employer-funded paid parental leave took either 1-2 weeks' leave (35%) or 2-4 weeks' leave (31%). Of partners who had access to unpaid parental leave, most took none (55%); and of those who had access to paid/holiday annual leave, 57% took between 1 and 4 weeks.

The UK, New Zealand and Australia meet two of the international conditions for uptake described above: their leave is individual and (partly) flexible. However, due to the relatively low level of compensated paternity leave in the UK and New Zealand, fathers may choose instead to take annual leave, restricting their opportunities for annual leave later in the year. In Australia, employer-provided paid paternity leave is, in most cases, paid at wage replacement levels but for fathers with access only to unpaid parental leave under the National Employment Standards, it is highly likely that many fathers would also need to use their paid annual leave.

As Dad and Partner Pay has just commenced, the uptake rate by fathers is unknown. The Productivity Commission in its 2009 Inquiry Report assumed a full-time equivalent usage rate of 25% of eligible fathers, consistent with the experiences of overseas schemes (Productivity Commission, 2009).

This general snapshot demonstrates that countries with statutory paternity leave that meet identified conditions are more likely to see greater uptake of leave by fathers at the time of birth, and throughout the first 12 months and pre-school years of each child's life.

Footnote

6 Evidence of the promotion of parental leave in Australia and internationally is limited. Australia's Paid Parental Leave scheme was actively promoted in 2011 through TV, radio and via printed materials (such as brochures) and online via the Department of Human Services website.