Self-employed parental leave entitlements
Who can take parental leave?
To be eligible for parental leave payments a birth mother/adoptive parent must establish that you have worked an average of at least 10 hours a week over the six or 12 months immediately before the expected date of delivery or adoption of a child. You must also meet the definition of self-employed, which means you must have been:
a) Providing goods or services for hire or reward under a contract for services
b) Carrying on a business (including a profession, trade, manufacturing operation or an undertaking carried on for profit), including in partnership for another person, or
c) Working for a trust in a business carried on by the trust.
Some people are engaged in more than one type of self-employed work – for example, bee-keeping and gardening. Where you do different types of work at the same time (concurrently) during a six or 12 month period, this is treated as one period of self-employment. Enabling you to group different types of work into one period of self-employment may help you meet eligibility criteria around the number of hours worked.
Where you do different types of work one after the other (consecutively) during a six or 12 month period, this is also treated as one period of self-employment, as long as any breaks between this work are no greater than 30 days.
It is your decision whether to apply under the six or 12 month criteria. In both cases you will be entitled to 14 weeks’ parental leave payments. But if you have an inconsistent work pattern over the immediately preceding 12 months and do not meet the average hours of work criteria for this period, you may still meet the criteria over the six month period. The level of your parental leave payment may also differ depending on whether your average income is determined over 12 or six months.
If you are eligible as both an employee and as a self-employed person
(for example, a carer who works part-time for a residential care facility and who also privately provides weekend respite care), you can apply separately as an employee and a self-employed person to maximise your payment. However, your payment will not exceed the maximum amount.
What paid leave is available?
Paid leave is available to birth mothers, or the nominated parent or primary carer of a child under six where you have assumed the care of the child with a view to adoption.
If you meet either the six or 12 month eligibility criteria, you are entitled to paid parental leave for 14 weeks. This payment is funded by the government and you will need to make an application for paid leave to Inland Revenue.
You are entitled to:
- 100 percent of your net earnings if your average weekly earnings over the previous six or 12 months is less than the maximum payment amount
- The minimum payment rate if your average weekly earnings over the previous six or 12 months are less than the equivalent of 10 hours pay at the highest rate of minimum wage. This rate also applies if you made a loss
- The maximum payment amount per week if your average weekly earnings (net) over the previous six or 12 months are equivalent to the maximum amount.
The maximum level of parental leave payment may change on 1 July each year. For the most up-to-date information, visit our FAQ Knowledgebase and submit a question, or phone the Department of Labour on 0800 20 90 20 during normal business hours.
The initial entitlement to paid parental leave lies with the mother or primary carer of a child that you plan to adopt. However, parental leave payments can be transferred in whole or part to an eligible partner, whether they are an employee or self-employed. In the case of joint adoption, the nominated spouse/partner can transfer some or all of the payment to the other spouse/partner, if they are also eligible. If the adoption is by one person alone, only that person can apply for the entitlement.
You can choose when to start your parental leave, but parental leave payments are payable from whichever comes first: the start date of parental leave, the birth of the child, or the date that you assume care of a child you intend to adopt. You can start parental leave earlier than planned for any reason, such as on medical advice. However, the payment period will not be extended, and continues until 14 weeks are complete.
The payment may stop earlier if you:
- Transfer the payment or part of the payment to your partner
- Return to work before the end of the paid parental leave period, or
- Cease self-employment.
How often can I take parental leave?
You can take paid parental leave multiple times, as long as six months elapses between each period of leave, and provided that you meet the eligibility requirements each time. Paid parental leave can only be taken once in respect of each child.
Must I take leave to receive a payment?
The payment is only available when leave is taken, however, it is accepted that as a self-employed person you may:
- Maintain a level of oversight over your business or do occasional administrative tasks to ensure continuity during the period of leave
- Receive income during the period of paid leave that was earned before leave commenced
- Receive income because of work undertaken by other people in your business during the course of the paid leave.
Maintaining this contact with your business will not affect your leave.
If you are entitled to paid parental leave under both the employee and self-employed provision, it is important that you recognise if you return to work as an employee, even for a short period, while receiving parental leave payments, your payments under the employee provisions will stop. Similarly, if you return to work as a self-employed person, your payments under the self-employed provisions will stop.
What entitlement is available to my partner if they are also self-employed?
Your spouse or partner may be entitled to have part or all of your paid parental leave transferred to them if they intend to share responsibility for looking after the child. They must also meet either the six or 12 month eligibility criteria and the definition of self-employed above.
A spouse or partner is a person in a married, civil union or de facto relationship (including same-sex partners) with the mother, or primary carer who assumes the care of the child they intend to jointly adopt with their spouse/partner. They do not need to be the natural parent of the child.
What entitlement is available to my partner if they are an employee?
- In addition to the ability to have part of your paid parental leave transferred to them, the following unpaid parental leave is available to partners who are eligible as employees: Partner’s/paternity leave of either one week (for a partner with six months eligible service), or two weeks (for a partner with 12 months eligible service) is available. Partner’s/paternity leave can be extended in certain circumstances, if all or part of your parental leave payments are transferred to an eligible partner. Contact the Department of Labour on 0800 20 90 20 during business hours for more information about this. Partner’s/paternity leave is additional to the period of paid parental leave and extended leave.
- Extended leave is available for employees with 12 months eligible service for up to 52 continuous weeks, available in the 12 months after the birth or adoption. The total leave taken must not be more than 52 weeks.
Both partners can take their leave at the same time or they can take it one after the other. The Summary of entitlements to leave and payment chart shows how leave can be shared between partners.
Julie (who has 12 months eligible self-employment) decides to take 14 weeks paid parental leave. Her partner Jason (who has 12 months eligible service as an employee) could have two weeks paternity leave when the baby is born. Jason could then take up to 52 weeks extended leave while Julie returns to work.