Should paid parental leave be means tested?

Stuff reports:

A group of high-powered New Zealand women, some of them mothers, say should be means-tested to give more assistance to poorer families.

I agree. Taxing people more to give welfare to families who don’t need it is inefficient and morally unjustifiable.

Means-testing paid parental leave is supported by Therese Walsh, mother of two, the inaugural Women of Influence winner and head of New Zealand’s 2015 Cricket World Cup campaign.

“We means-test for almost every other kind of benefit, why should this be any different? There isn’t enough taxpayer money to go around and the spend must be appropriate. I don’t have a strong view on how much time should be taken but the dollars should be enough to provide the necessities.”

I think all welfare should be means tested – including NZ Super – so long as the administrative cost of doing the means testing is minor.

Victoria University professor of public policy Jonathan Boston said that if the aim was to assist low-income families, there would be better ways than changing current parental leave arrangements. “In order to get parental leave you have to be at work and you have to have been in work for a year continuously. If you simply extend paid parental leave it’s not going to help any of those not in work.”


BusinessNZ chief executive Phil O’Reilly said it was a nice idea but he did not believe the means-testing proposal could be practically implemented. “We have always supported targeting of government assistance. But this won’t have wide support. I suspect in practical terms employers may support universality.”

A very disappointing statement. I don’t believe means testing paid parental leave would be difficult at all. NZ Super would be. But PPL wouldn’t be.

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