Advocates urge Govt not to stop at 18 weeks but spokesman says six months too costly.

Parental leave campaigners are welcoming the latest extension of paid leave to 18 weeks, but the Government says it will veto extending it further to six months.

The paid leave increase from 16 weeks to 18 weeks is one of a raft of changes taking effect today including a $25 a week pay rise for beneficiaries with children, $12.50 more in weekly tax credits for low-income working families, a 50c minimum wage increase to $15.25 an hour, 2.7 per cent more in NZ superannuation, higher childcare subsidies and lower ACC levies.

But the sting in the tail is that beneficiaries will now have to look for part-time work of at least 20 hours a week as soon as their youngest children turn 3, down from age 5 at present.

Rebecca Matthews of 26 for Babies, which is campaigning to extend paid parental leave to 26 weeks, called for continued increases in line with those from 14 to 16 weeks last April and to 18 weeks today.


"What we said in our submission is to keep planning that in, to keep going at two weeks a year," she said.

Labour MP Sue Moroney, whose bill to extend paid leave to 26 weeks by 2018 passed its first reading by one vote in Parliament last September, believed the bill would still have majority support when it returns from a committee next month.

"The public support has been overwhelming. I think we had something like 7500 submissions come to the select committee and [only] two that were opposed, and one of those [from the School Trustees Association] was withdrawn," she said.

She said extending paid leave to 26 weeks would cost an extra $105 million a year.

But it would save $30 million a year in childcare subsidies and other direct costs, and potentially more in healthcare costs for babies through longer breastfeeding.

We haven't even gone into [costing] long-term benefits," she said.

But a spokesman for Finance Minister Bill English said the Government still planned to veto the bill on financial grounds because the immediate cost had not been authorised.

Mr English said 100,000 families with 180,000 children would gain from the $25 benefit increase, which was authorised in last year's Budget.

A further 200,000 lower-income working families will gain from lifting the in-work tax credit from $60 to $72.50 a week.

Childcare subsidies will increase from $4 to $5 an hour for parents earning below $800 a week with one child or $920 with two children.

The ACC earners' levy, paid by all employees and self-employed people, will drop from $1.26 to $1.21 for every $100 in earnings, an effective tax cut of 50c a week for someone earning $1000 a week.

Vehicle levies will drop by a third from an average of $194.25 to $130.26, saving $1.23 a week for every vehicle.

Only small step forward, but 'every little bit counts'

Expectant first-time mum Gabrielle O’Brien will just qualify for an extra two weeks’ paid parental leave — her baby girl is booked for a caesarean birth on Monday.

Expectant first-time mum Gabrielle O'Brien will just qualify for an extra two weeks' paid parental leave - her baby girl is booked for a caesarean birth on Monday.

"Every little bit counts," she said.

If she had had the baby yesterday, she would only have got 16 weeks' paid leave. But she feels even 18 weeks is only a small step forward.

Ms O'Brien, 39, has been reading about the crucial importance of a baby's first few years for its emotional and intellectual development.

"In my 20s I would have told you I would have had the baby and put it in daycare and gone back to work," she said.

"That is certainly not how I feel now.

"I don't think we are on par with our development needs, and if we are looking into the future, this is why we don't have women in boardrooms to the same extent because obviously, if you are not supported, it makes it very hard if society doesn't say that we value that."

She said the maximum rate of parental leave payments, $516.85 before tax, would not even cover her rent in Auckland's inner-city suburb of Westmere.

"I'm actually going to be a solo mum. I'm lucky, I have got savings. However, I do think it doesn't take into account circumstances. It also doesn't take into account what your earnings have been for five or 10 years prior to that."

She was selling analytic software and hopes to go back to work part-time in about six months.

April 1 changes

• Paid parental leave up 2 weeks to 18 weeks.

• Benefits up $25 a week for families with children.

• Beneficiaries must seek part-time work when youngest child turns 3.

• In-work tax credit up $12.50 a week for low-income working families.

• Childcare subsidy up from $4 to $5 an hour for incomes below $800 a week.

• Minimum wage up 50c to $15.25 an hour.

• NZ super up 2.7 per cent.

• ACC earners levy down 50c for every $1000 earned.

• ACC vehicle levy down $64 a year.

• ACC employer levies down 11 per cent.