Friday 24 May 2019

Alarm at cost of 7-week paid parental leave

Business, schools to be hit by new benefit, Cabinet warned

Education Minister Joe McHugh
Education Minister Joe McHugh
Education Minister Joe McHugh. Photo: Brian Lawless/PA Wire
Philip Ryan

Philip Ryan

Cabinet ministers have raised serious concerns over the Government's plan to give thousands of new parents seven weeks' paid parental leave, the Sunday Independent can reveal.

Senior ministers issued stark warnings to colleagues about the impact the landmark legislation would have on businesses and schools ahead of a private Cabinet meeting last week.

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Minister for Education Joe McHugh warned that his department would not be able to cover the financial costs arising from the introduction of seven weeks' paid parental leave which will be available to all parents, including same-sex couples and people who adopt children.

The Department of Education and other public sector employers will pay employees their full weekly salary when they are on parental leave - but private employers will not be obliged to top up their employees' salaries beyond the €240 they will receive in parental benefits.

Mr McHugh also said the new legislation would place a significant administrative burden on school principals who will be forced to find cover for teachers who avail of the paid leave.

Yesterday, a senior Department of Health source said paid parental leave would pose an "even more extreme challenge" for hospitals and other medical facilities which are already significantly under resourced.

"Politicians are very much in favour of the paid parental leave because it plays well with the public but officials are seriously concerned about the impact it will have on staffing and budgets," the source said.

Meanwhile, Minister for Business Heather Humphreys told Cabinet colleagues that the parental leave benefits would have a significant impact on business costs and productivity especially for small business owners who may not have many employees. Ms Humphreys warned that businesses would be forced to find temporary cover and reassign duties of staff who take parental leave when the new legislation is introduced.

She said the burden on employers should be weighed against the need to introduce social policy. However, she recognised that the paid leave would improve the work-life balance of new parents and said she was supportive of the policy overall.

Attorney General Seamus Woulfe is understood to have told ministers that seven weeks of paid leave for all new parents could be subjected to "constitutional scrutiny" because it places an unfair burden on employers which is not shared by other sections of society.

Despite concerns being raised by ministers and their officials about the bill, the Cabinet agreed to publish the legislation.

Social Protection Minister Regina Doherty and Justice Minister Charlie Flanagan are due to make an announcement on the bill this week.

The legislation, which was announced in this year's Budget, will see two weeks of paid parental leave introduced for all new parents from November. The Paid Parental Leave Bill will then be extended to seven weeks by 2021. The leave can be taken at any time within the first year of a child's life. Parents will only be able to avail of the leave in one- week blocks. The leave will be non-transferable between couples because the Government wants to encourage fathers to take an active role in raising their children.

The paid leave will cost the State around €1.5m this year but this will rise to €32m per year when the full seven weeks is eventually introduced.

The State currently spends more than €267m a year on maternity/paternity benefits.

The Government believes the legislation follows international best practice and will result in better outcomes for children. At present, new mothers are entitled to 26 weeks' paid maternity leave along with an additional 16 weeks' unpaid leave. Fathers are entitled to two weeks' paid paternity leave.

The new parental leave will allow fathers to take nine weeks of paid leave from work within the first year of their child's life, while mothers will be able to take 33 weeks.

Paid paternity leave has been available to fathers since 2016 but figures show there has been a slow uptake since the scheme was introduced.

A government analysis showed there is a significant disparity between the number of fathers claiming paternity leave and the number of babies born each year. Data shows that the payment to fathers dropped significantly in 2018 compared to the previous year.

The figures revealed 24,080 paternity leave claims were made in 2018, while 26,599 were lodged the previous year.

Figures for the number of births in 2018 are currently unavailable but 62,053 newborns were registered in 2017, suggesting low take-up of the benefit among fathers.

The parental leave bill also ensures a person's employment rights are not impacted by their decision to take time off work to care for children.

Sunday Independent

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