A little over a year after COVID-19 made it to Australian shores, reports began to surface about a pandemic-fuelled baby boom. It began with the Medical Journal of Australia stating that 11,000 ‘extra’ babies were born in the first quarter of 2021, and the story has rolled on ever since.
Perhaps you were part of that boom or perhaps you had always planned to have a baby at this point in your life. However you got here, the fact is that you are about to become a new mum or dad and if you clicked on this article, you’re probably wondering what that means for your business.
In this article, we’ll be taking a closer look at how the ever-increasing number of self-employed workers may tackle the challenge of maternity leave and paternity leave in Australia. We’ll work to understand how to plan for it, how long to take, and what support options might be available.
You’re only getting closer to welcoming your new bub into the world, so without further ado, let’s dive right in!
Parental leave government support
For many (if not most) self-employed Australians, taking parental leave will mean turning off the income tap for a time – the simple fact is that if you’re not working, you’ll no longer be bringing in money. So first things first: If you take paternity or maternity leave in Australia as someone who is self-employed, will you receive any government support?
Australia’s first national paid parental leave scheme was introduced in 2011. It granted eligible working parents access to tax-payer funded money so that they could take time off to care for their newly born or recently adopted child. Mothers enjoy up to 18 weeks of pay at the rate of the national minimum wage, while dads and partners get up to two weeks.
While most eligible participants are employees who get paid through their employers, the scheme was also designed to cover eligible self-employed workers, who receive the payments directly from the Department of Human Services.
The big question: what does ‘eligible’ mean?
Anyone who wants to access the paid parental leave scheme, self-employed or otherwise, must meet residency rules, and be one of the following:
The birth mother of a newborn child.
The initial primary carer of an adopted child.
A carer for a newborn or newly adopted child (covered by the dad and partner pay scheme.)
If you tick one of those boxes, the next step will be to check your eligibility by completing two tests:
Income test: This test is to ensure that access to the scheme is only granted to those who truly need it. In the 2020-21 financial year those with an individual adjusted taxable income of $151,350 or less were eligible for parental leave pay.
Work test: This test is to ensure only those who have regularly worked gain access to the scheme. You’ll need to have worked in 10 of the 13 months prior to the birth or adoption of your child, and a minimum of 330 hours (approximately one day a week) within that 10-month period.
Other criteria are covered in these tests, so you’ll need to click the links above to check your eligibility.
How much time should I take off?
The next question: how long should you take off? The answer to this question might be driven by your paid parental leave situation, like whether you’re eligible for the support and the payment terms that you are granted. Depending on your situation, you could find yourself enjoying:
Up to 18 weeks of financial support as a new mother or primary carer.
Up to two weeks of financial support as a new father, partner or secondary carer.
It should be noted that the parental leave payments are set to match the national minimum wage. If you’ve enjoyed success in your self-employed venture, you might find the financial support offered is quite a step down from what you were earning while you were working. It’s also a stipulation of the paid parental leave program that you cannot work in any capacity while enjoying the support, so there won’t be any way to supplement your income, and you may find yourself tapping into your savings to get by.
Finances aside, the length of time you take off work as a new parent is an entirely personal choice. You need to consider:
What’s right for you
What’s right for your newborn
What’s right for your family
What’s right for your business
Ask yourself: how do the timeframes established by the paid parental leave program feel to you? Does 18 weeks feel too short, too long, or about right? As a father would you like to spend more than two weeks adjusting to life with your newborn? Do you need to take the realities of your work into account?
There’s no right or wrong answer here – only that which feels right to you. Our advice: go with your gut.
What to plan for when taking parental leave
As an expectant parent who is self-employed, you’ll not only need to plan for the arrival of your baby, you’ll also need to plan for the disruption to your business.
As we stated above, you cannot undertake any form of paid work while receiving financial support from the paid parental leave scheme. That said, the definition of ‘paid work’ is a little more flexible when you’re self-employed.
Finding temporary staff to pick up the workload is far easier in some situations than it is in others. Retail and eCommerce business owners might find it quite simple to hire temporary help. Those who provide specialised professional services, on the other hand, could find it quite difficult. If you think you’ll struggle to cover your own absence during paid parental leave, you’ll need to take the following actions:
Inform your customers
Your first step is to let your customers know what’s happening. If your business works with a small group of clients, make contact with them one by one. If your customer base is larger, advise people about your break via your website, social profiles and by updating the opening hours on your Google My Business listing.
Before you go on your break, consider using an email tool like Square Marketing to schedule regular email communications that keep your customers in the loop. Be sure to set up auto-replies for those who make direct contact too. Most emailing won’t come under the umbrella of paid work, so it’s fine to keep in regular contact with your customers throughout your leave.
Press pause on expenses
Reverting back to the minimum wage after a period of making your own money may demand that you tighten your purse strings a little. Take a moment to review your business expenses and identify those that you can press pause on while you’re on your break: subscriptions and payments for products and services that you won’t be utilising while you’re away.
Will I lose customers by taking leave?
The great fear of the self-employed is that by taking a break from their business you’ll do damage to it. But if you do things the right way, making the preparations listed above and keeping your clientele up to date throughout, for the most part, you’ll find that people will be very understanding of your absence. Welcoming a new child into the world is an exciting time, and you can be confident that the overwhelming majority of people will share your excitement!
Transitioning back to work post-leave
You’ve welcomed your baby into the world, you’ve enjoyed some quality time together during your leave, but now the time has come to return to work. This transition can be complex – your life will look very different now from what it did before – so you need to adapt your approach to work with these changes in mind.
Ease your way back into work
Don’t expect that you’ll do the same hours as you used to, particularly in the beginning. You have a small human to take care of which can take a lot out of you. Don’t take on too much too soon – consider going back part-time initially. Listen to your body and mind, and heed what they tell you.
Prepare contingency plans
What happens if your baby is sick, if your partner can’t look after bub, or if your babysitter falls through? While it can be rather difficult to plan for the unexpected, do what you can to put contingencies in place: hospitals you’ll head to, carers you can contact or temporary workers who can step in whenever you might need them.
Share your plans with your team
If you have employees, keep them in the loop as to how you’re feeling on your return to work. There might be days when you plan to work but simply can’t, and that’s OK. As long as you keep communication lines open, you can be confident that your team will understand and adjust.
Track your emotions
Adjusting to your new life with your child while juggling work can prove a significant mental challenge. Consider keeping a diary or downloading an app to track your emotions – this can help you to identify patterns and trends, which in turn can inform the best ways to approach work and life.
Care for yourself so you can care for your child
Perhaps most importantly, cut yourself some slack. To take care of your child, you must first take care of yourself. Sleep when you’re tired. Go home when you’re not feeling up to work. Ask for help when you need it.
Taking parental leave when you’re self-employed can feel like an intimidating, even risky prospect. But by approaching it the right way, making the most of the available support, and leaning on some of Square’s suite of business tools, you can ensure that you, your baby and your business stay healthy and happy throughout.