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Budget Measures (Financial Support for Newborn Children) Bill Government Bill Explanatory note General policy statement This Bill is an omnibus Bill introduced in accordance with Standing Order 260(a) because the amendments deal with an interrelated topic that can be regarded as implementing a single broad policy.
It is intended to divide the Bill at the committee of the whole House stage so that— • Part 1 becomes the Parental Leave and Employment Protec- tion Amendment Bill: • Part 2 becomes the Taxation (Parental Tax Credit) Bill.
The Bill implements the following fiscal measures announced as part of Budget 2014: • an increase, in 2 stages, to 18 weeks of paid parental leave entitlement and 18 weeks of maternity leave; and for lower and middle income working families, the parental tax credit increases to $220 per week, for the first 10 weeks following birth (currently $150 per week, for 8 weeks).

The measures are part of the overall fiscal settings for Budget 2014, in line with the Budget Policy Statement 2014.
• 211—1 2 Budget Measures (Financial Support for Newborn Children) Bill Explanatory note These measures are intended to provide increased targeted support, within the current fiscal envelope, for working parents with new- borns.

In the first year of a child’s life, particularly the first 6 months, it is important for newborn development to get full time personal care and for parents to get support to manage budgetary and other pressures.
Full-time care and monetary support can greatly assist with mothers/caregivers and children developing close bonds, breast- feeding for the first 6 months (which is the World Health Organiza- tion’s recommendation), and reducing parental and family stress, all of which improves short- and long-term child and society outcomes.
This omnibus Bill aims to help parents achieve this outcome by intro- ducing amendments to the following Acts: • • Parental Leave and Employment Protection Act 1987: Income Tax Act 2007.

Paid parental leave entitlements The Bill increases the number of weeks of paid parental leave from the current 14 weeks to 16 weeks as of 1 April 2015, and to 18 weeks as of 1 April 2016.
Parental tax credit The Bill increases the maximum amount of parental tax credit payable on the birth of a newborn to $220 per week, for the first 10 weeks following birth.

This takes the total maximum payment to $2,200 per newborn.

The higher payments apply to babies born on or after 1 April 2015.

The Bill also changes the abatement formula for the parental tax credit, so that it is abated against each dollar of family income earned over an entire year.
This change means that the parental tax credit amount will reduce faster as income increases, as compared to cur- rent settings; it brings the effective abatement rate for the parental tax credit in line with the abatement of the family tax credit and the in-work tax credit.

This will better target parental tax credit pay- ments to lower and middle income families, ensuring that they re- ceive a greater slice of funding over time.
Explanatory note Budget Measures (Financial Support for Newborn Children) Bill 3 Departmental disclosure statements The Ministry of Business, Innovation, and Employment and the In- land Revenue Department are required to prepare a disclosure state- ment to assist with the scrutiny of this Bill.

That statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.
A copy of tion.govt.nz/disclosure.aspx?type=bill&subtype=govern- ment&year=2014&no=211&.

the statement can be found at http://legisla- Regulatory impact statements The Ministry of Business, Innovation, and Employment and the In- land Revenue Department produced regulatory impact statements on 7 April 2014 and 4 April 2014 respectively, to help inform the main policy decisions taken by the Government relating to the contents of this Bill.
Copies of these regulatory impact statements can be found at— • • • http://www.dol.govt.nz/publications/general/gen-ris.asp http://taxpolicy.ird.govt.nz/publications/type/ris http://www.treasury.govt.nz/publications/informationre- leases/ris Clause by clause analysis Clause 1 is the Title clause.

Clause 2 relates to commencement.

Clauses 6 to 18 and Schedule 2 (which increase the duration of parental leave payments and ma- ternity leave from 14 to 16 weeks) come into force on 1 April 2015.
Part 2 (which increases the parental tax credit) also comes into force on 1 April 2015.

Clauses 19 to 31 and Schedule 3 (which increase the duration of parental leave payments and maternity leave from 16 to 18 weeks) come into force on 1 April 2016.

The rest of the Bill comes into force on the day after the date of Royal assent.
4 Budget Measures (Financial Support for Newborn Children) Bill Explanatory note Part 1 Amendments to Parental Leave and Employment Protection Act 1987 Clause 3 provides that Part 1 amends the Parental Leave and Em- ployment Protection Act 1987 (the principal Act).

Clause 4 inserts new section 2C into the principal Act.

New section 2C refers to new Schedule 1AA, which sets out transitional provi- sions.

Clause 5 inserts new Schedule 1AA into the principal Act.
New Schedule 1AA contains transitional provisions that describe how the new paid parental leave entitlements apply at different times.

New Schedule 1AA is set out in Schedule 1 of this Bill.

Amendments to come into force on 1 April 2015 Clause 6 amends section 1A of the principal Act, which sets out the purpose of the Act.

The amendment changes a reference to 14 weeks of paid parental leave to 16 weeks.

Clause 7 amends section 9 of the principal Act, which relates to the duration of maternity leave.
The first amendment increases the amount of maternity leave that a female employee is entitled to take from 14 weeks to 16 weeks.

The second amendment increases the amount of maternity leave that a female employee is entitled to take after the expected date of delivery, if she begins her maternity leave before that date in certain circumstances, from 8 weeks to 10 weeks.

Clauses 8 to 17 replace references in the principal Act to 14 weeks with references to 16 weeks.
Clause 15 is the provision that changes the duration of parental leave payments, by amending references in section 71J of the principal Act from 14 weeks to 16 weeks.

Clause 18 and Schedule 2 make consequential amendments to the Parental Leave and Employment Protection Regulations 2002 by changing references to 14 weeks to 16 weeks.
Amendments to come into force on 1 April 2016 Clauses 19 to 30 make equivalent amendments to the principal Act to come into force on 1 April 2016, by increasing the amount of mater- nity leave that can be taken after the date of delivery from 10 weeks Explanatory note Budget Measures (Financial Support for Newborn Children) Bill 5 to 12 weeks in certain circumstances, and otherwise changing refer- ences to 16 weeks to 18 weeks.
Clause 31 and Schedule 3 also come into force on 1 April 2016, and make equivalent consequential amendments to the Parental Leave and Employment Protection Regulations 2002 by changing refer- ences to 16 weeks to 18 weeks.

Part 2 Amendments to Income Tax Act 2007 Clause 32 provides that Part 2 amends the Income Tax Act 2007 (the principal Act).
Clause 33 amends section MD 1 of the principal Act to ensure the abatement formula in section MD 2 of the principal Act is taken into account in the global calculation of working for families tax credits.

Clause 34 amends section MD 2 of the principal Act to insert an abatement formula that takes into account each dollar of family in- come earned over an entire year.
This means that the parental tax credit amount will reduce faster as income increases, as compared to current settings, better targeting parental tax credit payments to lower and middle income families, and ensuring that they receive a greater slice of funding over time.

Clause 35 amends section MD 11 of the principal Act, as part of increasing the entitlement to parental tax credits from 8 weeks to 10 weeks.
Clause 36 amends section MD 12 of the principal Act, as part of increasing the entitlement to parental tax credits from $150 per week to $220 per week and from 8 weeks to 10 weeks.

Clause 37 amends section MD 13 of the principal Act, as part of increasing the entitlement to parental tax credits from 8 weeks to 10 weeks.

Clause 38 amends section MD 16 of the principal Act, as part of increasing the entitlement to parental tax credits from 8 weeks to 10 weeks.
Hon Simon Bridges Budget Measures (Financial Support for Newborn Children) Bill Government Bill Contents Title Commencement Part 1 Amendments to Parental Leave and Employment Protection Act 1987 Principal Act Amendments to come into force on day after date of Royal assent New section 2C inserted (Transitional, savings, and related provisions) 2C New Schedule 1AA inserted Transitional, savings, and related provisions Amendments to come into force on 1 April 2015 Section 1A amended (Purpose) Section 9 amended (Duration of maternity leave) Section 19A amended (Extension of partner’s/paternity leave entitlements for spouses or partners of employees in certain circumstances) Section 19B amended (Extension of partner’s/paternity leave of adoptive parent) Section 26 amended (Duration of extended leave) 211—1 Page 3 3 4 4 4 4 4 4 4 4 5 1 Budget Measures (Financial Support for Newborn Children) Bill Section 27 amended (Extended leave to be shared between parents) Section 32 amended (Requirements where extended leave sought) Section 45 amended (Early ending and extension of parental leave) Section 71A amended (Purpose) Section 71J amended (Duration of parental leave payment) Section 71L amended (End of parental leave payment for employees) Section 71LA amended (End of parental leave payment for self-employed persons) Regulations amended Amendments to come into force on 1 April 2016 Section 1A amended (Purpose) Section 9 amended (Duration of maternity leave) Section 19A amended (Extension of partner’s/paternity leave entitlements for spouses or partners of employees in certain circumstances) Section 19B amended (Extension of partner’s/paternity leave of adoptive parent) Section 26 amended (Duration of extended leave) Section 27 amended (Extended leave to be shared between parents) Section 32 amended (Requirements where extended leave sought) Section 45 amended (Early ending and extension of parental leave) Section 71A amended (Purpose) Section 71J amended (Duration of parental leave payment) Section 71L
 amended (End of parental leave payment for employees) Section 71LA amended (End of parental leave payment for self-employed persons) Regulations amended Part 2 Amendments to Income Tax Act 2007 Income Tax Act 2007 amended Section MD 1 amended (Abating WFF tax credit) Section MD 2 amended (Calculating net contributions to credits) Budget Measures (Financial Support for Newborn Children) Bill 35 36 37 38 Section MD 11 amended (Entitlement to parental tax credit) Section MD 12 amended (Calculation of parental tax credit) Section MD 13 amended (Calculation of family credit abatement) Section MD 16 amended (Calculation of parental tax credit abatement) Schedule 1 New Schedule 1AA inserted in Parental Leave and Empoyment Protection Act 1987 Schedule 2 Amendments to Parental Leave and Employment Protection Regulations 2002 that come into force on 1 April 2015 Schedule 3 Amendments to Parental Leave and Employment Protection Regulations 2002 that come into force on 1 April 2016 cl 2 8 8 8 9 10 12 13 The Parliament of New Zealand enacts as follows: 1 2 (1) (2) (3) Title This Act is the Budget Measures (Financial Support for New- born Children) Act 2014.
Commencement Sections 6 to 18, Part 2, and Schedule 2 come into force on 1 April 2015.

Sections 19 to 31 and Schedule 3 come into force on 1 April 2016.

The rest of this Act comes into force on the day after the date 10 on which it receives the Royal assent.
5 3 Part 1 cl 3 Budget Measures (Financial Support for Newborn Children) Bill Part 1 Amendments to Parental Leave and Employment Protection Act 1987 Principal Act This Part amends the Parental Leave and Employment Pro- 5 tection Act 1987 (the principal Act).
Amendments to come into force on day after date of Royal assent New section 2C inserted (Transitional, savings, and related provisions) Before section 3, insert: 10 3 4 “2C Transitional, savings, and related provisions The transitional, savings, and related provisions set out in Schedule 1AA have effect according to their terms.” New Schedule 1AA inserted Before the Schedule, insert the Schedule 1AA set out in Schedule 1 of this Act.
15 Amendments to come into force on 1 April 2015 Section 1A amended (Purpose) In section 1A(c), replace “14 weeks” with “16 weeks”.

20 Section 9 amended (Duration of maternity leave) In section 9(1) and (3), replace “14 weeks” with “16 weeks”.

In section 9(2), replace “8 weeks” with “10 weeks”.

Section 19A amended (Extension of partner’s/paternity leave entitlements for spouses or partners of employees in 25 certain circumstances) In section 19A(3), replace “14 weeks” with “16 weeks”.
Section 19B amended (Extension of partner’s/paternity leave of adoptive parent) In section 19B(2)(a), replace “14 weeks” with “16 weeks”.

30 5 6 7 (1) (2) 8 9 4 Budget Measures (Financial Support for Newborn Children) Bill Part 1 cl 19 Section 26 amended (Duration of extended leave) In section 26(2), replace “14 weeks” with “16 weeks”.

Section 27 amended (Extended leave to be shared between parents) In section 27(2)(c), replace “14 weeks” with “16 weeks”.
5 Section 32 amended (Requirements where extended leave sought) In section 32(d)(i), replace “14 weeks” with “16 weeks”.

Section 45 amended (Early ending and extension of parental leave) In section 45(4)(a) and (c)(i), replace “14 weeks” with “16 weeks”.

10 Section 71A amended (Purpose) In section 71A, replace “14 weeks” with “16 weeks”.

Section 71J amended (Duration of parental leave payment) 15 In section 71J(a) and (b), replace “14 weeks” with “16 weeks”.
Section 71L amended (End of parental leave payment for employees) In section 71L(1)(a), replace “14 weeks” with “16 weeks”.

Section 71LA amended (End of parental leave payment for self-employed persons) In section 71LA(1)(a), replace “14 weeks” with “16 weeks”.

20 Regulations amended The Parental Leave and Employment Protection Regulations 2002 are amended in the manner set out in Schedule 2.
25 Amendments to come into force on 1 April 2016 19 Section 1A amended (Purpose) In section 1A(c), replace “16 weeks” with “18 weeks”.

5 Part 1 cl 20 Budget Measures (Financial Support for Newborn Children) Bill Section 9 amended (Duration of maternity leave) In section 9(1) and (3), replace “16 weeks” with “18 weeks”.

In section 9(2), replace “10 weeks” with “12 weeks”.
Section 19A amended (Extension of partner’s/paternity leave entitlements for spouses or partners of employees in 5 certain circumstances) In section 19A(3), replace “16 weeks” with “18 weeks”.

Section 19B amended (Extension of partner’s/paternity leave of adoptive parent) In section 19B(2)(a), replace “16 weeks” with “18 weeks”.

10 Section 26 amended (Duration of extended leave) In section 26(2), replace “16 weeks” with “18 weeks”.
Section 27 amended (Extended leave to be shared between parents) In section 27(2)(c), replace “16 weeks” with “18 weeks”.

15 Section 32 amended (Requirements where extended leave sought) In section 32(d)(i), replace “16 weeks” with “18 weeks”.

Section 45 amended (Early ending and extension of parental leave) In section 45(4)(a) and (c)(i), replace “16 weeks” with “18 weeks”.

20 Section 71A amended (Purpose) In section 71A, replace “16 weeks” with “18 weeks”.
Section 71J amended (Duration of parental leave payment) 25 In section 71J(a) and (b), replace “16 weeks” with “18 weeks”.

Section 71L amended (End of parental leave payment for employees) In section 71L(1)(a), replace “16 weeks” with “18 weeks”.

20 (1) (2) 26 27 28 29 6 Budget Measures (Financial Support for Newborn Children) Bill Part 2 cl 34 30 31 32 Section 71LA amended (End of parental leave payment for self-employed persons) In section 71LA(1)(a), replace “16 weeks” with “18 weeks”.
Regulations amended The Parental Leave and Employment Protection Regulations 5 2002 are amended in the manner set out in Schedule 3.

Part 2 Amendments to Income Tax Act 2007 Income Tax Act 2007 amended This Part amends the Income Tax Act 2007 (the principal 10 Act).

33 (1) Section MD 1 amended (Abating WFF tax credit) Replace section MD 1(3)(d)(i) with: “(i) a family credit abatement calculated using the formula in section MD 13(2), and modified as 15 necessary by section MD 2(3) and (4); and”.
Subsection (1) applies for dependent children born on or after 1 April 2015.
Section MD 2 amended (Calculating net contributions to credits) 20 (2) 34 (1) After section MD 2(2), insert: “Calculation for parental tax credit “(3) For the purposes of sections MD 1 and MD 16, and subsection (2)(c)(iii) of this section, the amount of family credit abate- ment corresponding to the period applied to reduce the amount 25 of parental tax credit corresponding to the period is calculated using the formula: (period abatement amount – amount used) × entitlement days.
365 “Definition of items in formula In the formula,–– “(4) 7 Part 2 cl 35 Budget Measures (Financial Support for Newborn Children) Bill “(a) period abatement amount is the family credit abate- ment corresponding to the period (the abatement period): “(b) amount used is the period abatement amount that the “(c) Commissioner must apply under subsection (2)(c)(i) 5 and (ii) in calculating a net contribution for the abate- ment period: entitlement days is the number of days in a parental entitlement period that are in the abatement period.” In section MD 2, in the list of defined terms, insert “parental 10 entitlement period”.
Subsections (1) and (2) apply for dependent children born on or after 1 April 2015.

Section MD 11 amended (Entitlement to parental tax credit) In section MD 11(1)(b)(i), replace “56” with “70”.

In section MD 11(6)(b), in the words before the subparagraphs, replace “56” with “70”.

In section MD 11(6)(b)(ii), replace “56” with “70”.

Subsections (1), (2), and (3) apply for dependent children 20 born on or after 1 April 2015.
15 Section MD 12 amended (Calculation of parental tax credit) In section MD 12(2), in the formula, replace “56” with “70”.

Replace section MD 12(3)(a) with: “(a) prescribed amount is–– “(i) $1,200 for each dependent child born on or after 1 October 1999 and before 1 April 2015; or “(ii) $2,200 for each dependent child born on or after 1 April 2015:”.

Subsections (1) and (2) apply for dependent children born on or after 1 April 2015.
25 30 Section MD 13 amended (Calculation of family credit abatement) In section MD 13(4), in the heading, replace “56” with “70”.

35 (2) (3) 35 (1) (2) (3) (4) 36 (1) (2) (3) 37 (1) 8 Budget Measures (Financial Support for Newborn Children) Bill Part 2 cl 38 (2) (3) 38 (1) (2) In section MD 13(4), in the words before the paragraphs, re- place “56” with “70”.

Subsections (1) and (2) apply for dependent children born on or after 1 April 2015.
Section MD 16 amended (Calculation of parental tax credit abatement) In section MD 16(1)(c), replace “56” with “70”.

Subsection (1) applies for dependent children born on or after 1 April 2015.
5 9 Schedule 1 Budget Measures (Financial Support for Newborn Children) Bill Schedule 1 New Schedule 1AA inserted in Parental Leave and Empoyment Protection Act 1987 Schedule 1AA Transitional provisions relating to amendments to this Act coming into force on and after 1 April 2015 Part 1 Transitional provision relating to amendments to this Act made by sections 6 to 18 of Budget Measures (Financial Support for Newborn Children) Act 2014 s 5 s 2C 5 10 15 1 (1) Application of sections 6 to 18 of Budget Measures (Financial Support for Newborn Children) Act 2014 The amendments made by sections 6 to 18 of the Budget Measures (Financial Support for Newborn Children) Act 2014 apply to an employee or self-employed person who takes parental leave in respect of a child if— (a) the expected date of delivery of the child is on or after 20 1 April 2015; or the child is born on or after 1 April 2015; or in the case of adoption, the date on which the employee or self-employed person, or his or her spouse or partner, with a view to adoption, assumes the care of the child, 25 is on or after 1 April 2015.
(b) (c) (2) An employee or self-employed person to whom the amend- ments referred to in subsection (1) apply may, before 1 April 2015,— (a) give notice of a wish to take parental leave, in which 30 case the employee may begin his or her parental leave before 1 April 2015 as if those amendments were al- ready in force; and apply for a parental leave payment under Part 7A as if those amendments were already in force.
35 (b) Compare: 2004 No 89 ss 4, 26 10 Budget Measures (Financial Support for Newborn Children) Bill Schedule 1 Schedule 1AA—continued Part 2 Transitional provision relating to amendments to this Act made by sections 19 to 31 of Budget Measures (Financial Support for Newborn Children) Act 2014 5 Application of sections 19 to 31 of Budget Measures (Financial Support for Newborn Children) Act 2014 The amendments made by sections 19 to 31 of the Budget Measures (Financial Support for Newborn Children) Act 2014 apply to an employee or self-employed person who takes 10 parental leave in respect of a child if— (a) the expected date of delivery of the child is on or after 1 April 2016; or the child is born on or after 1 April 2016; or in the case of adoption, the date on which the employee 15 or self-employed person, or his or her spouse or partner, with a view to adoption, assumes the care of the child is on or after 1 April 2016.
(b) (c) 2 (1) (2) An employee or self-employed person to whom the amend- ments referred to in subsection (1) apply may, before 1 April 20 2016,— (a) give notice of a wish to take parental leave, in which case the employee may begin his or her parental leave before 1 April 2016 as if those amendments were al- ready in force; and apply for a parental leave payment under Part 7A as if those amendments were already in force.
(b) 25 Compare: 2004 No 89 ss 4, 26 11 Schedule 2 Budget Measures (Financial Support for Newborn Children) Bill Schedule 2 Amendments to Parental Leave and Employment Protection Regulations 2002 that come into force on 1 April 2015 s 18 Regulation 8 In regulation 8(1)(d)(iii) and (1A)(b), replace “14 weeks” with “16 weeks”.

5 Regulation 9 In regulation 9(2)(b), replace “14 weeks” with “16 weeks”.

Regulation 11 In regulation 11(3)(b), replace “14 weeks” with “16 weeks”.
10 Regulation 12 In regulation 12(2)(b), replace “14 weeks” with “16 weeks”.

Schedule In the Schedule, form 1, notes, replace “14 weeks” with “16 weeks” 15 in each place.

12 Budget Measures (Financial Support for Newborn Children) Bill Schedule 3 Schedule 3 Amendments to Parental Leave and Employment Protection Regulations 2002 that come into force on 1 April 2016 s 31 Regulation 8 In regulation 8(1)(d)(iii) and (1A)(b), replace “16 weeks” with “18 weeks”.
5 Regulation 9 In regulation 9(2)(b), replace “16 weeks” with “18 weeks”.

Regulation 11 In regulation 11(3)(b), replace “16 weeks” with “18 weeks”.

10 Regulation 12 In regulation 12(2)(b), replace “16 weeks” with “18 weeks”.

Schedule In the Schedule, form 1, notes, replace “16 weeks” with “18 weeks” 15 in each place.

12 Wellington, New Zealand: Published under the authority of the New Zealand Government—2014 13