Babies and being Self-Employed – Parental Leave
We have lots of clients of the fair sex at the Accountancy + Business Advice Centre and quite a few manage to fit in having babies as well as running their businesses – 3 so far over 2015! This means we give lots of advice to our clients on Paid Parental Leave and how to maximise their entitlement.
Just in case you’re not aware of the scheme, Paid Parental Leave is a 16 week government funded entitlement that enables a self-employed person to take paid leave when they are having a baby, or adopting a child under 6 years old. To obtain the paid leave, there are certain eligibility criteria that a self-employed person must meet in order to receive this and as the scheme is administered through Inland Revenue it’s complex!
The initial entitlement to paid parental leave lies with the birth mother or primary carer of the child to be adopted. However, all or part of the entitlement can then be transferred to their spouse or partner provided they are also eligible for paid parental leave either as a self-employed person or as an employee.
To be eligible for paid parental leave as a self-employed person you must:
- Meet the definition of self-employed, which means you must have been:
- Providing goods or services for hire or reward under a contract for services
- Carrying on a business (including a profession, trade, manufacturing operation or an undertaking carried on for profit), including being in partnership with another person, or
- Working for a trust in a business carried on by the trust.
- Have been self-employed for an average of 10 hours a week for either:
- The 6 months before the due date or adoption, or
- The 12 months before the due date or adoption.
Can You Still Work in Your Business?
You are required to take leave from your business while receiving payments; however you will still be able to:
- Maintain a level of oversight over your business, or do occasional administrative tasks to ensure the continuity of your business.
- Receive income that was earned prior to the start of your leave, and
- Receive income from work undertaken by other people in your business.
The ability to maintain this contact with your business will not affect your paid parental leave payment. However. if you return to working regular hours for your business or cease self-employment before the 16 weeks’ payment period is over, your entitlement to parental leave payments will end.
The payment will equal your average weekly income over the last 6 or 12 months, up to the maximum of $517 per week before tax.
Calculating your average weekly income is complicated if you haven’t been earning over the maximum earnings level so it’s probably best if we assist you with this.
A full summary of all paid and unpaid leave entitlements is available from the Department of Labour on their website.
Applying for Paid Parental Leave
Again the process for applying is complex so we can either handle the whole application process or guide you through the paperwork. If you are a client of the Accountancy + Business Advice Centre on one of our monthly or quarterly payment plans we probably won’t even charge you any fees for our help.
Business and Babies Together?
As for the other aspects of having a baby and running a business at the same time, that’s not my department – it’s a dim and distant memory since my four children were babies (and in any case I carried on working!) so the best of luck to you!