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Australia vs USA: Whose maternity leave is better?

In April this year, San Francisco became the first city in the entire United States of America to approve fully paid maternity leave for six weeks. Previously, parents would only receive 55 per cent of their income over this period.

While legislation differentiates between states and even cities in the USA, it begs the question - how does Australia's maternity leave compare to the most powerful country on the planet? Paid parental leave is crucial for so many families as they try and get on the front foot with their financial planning. Are we really that far ahead?

Australia vs USA: What we do well

Under the Department of Human Services in Australia, parental leave pay is the minimum weekly wage ($672.60), guaranteed over a total of 18 weeks (six of maternity leave, and 12 of paid parental or home care leave. There is also Dad and Partner pay, which can last for up to two weeks. There are residence and income-based requirements, but this is the leave that applies across the nation.

In the United States, things are a little different. A 2016 OECD study found that the USA was the only country that had no nationally implemented entitlement to paid leave for parents. While the US Department of Labor says some states (California, Connecticut, Massachusetts. New Jersey and Rhode Island) have passed laws for paid parental leave, at a Federal level Australia is miles beyond the USA.

Australia vs USA: Where we can improve

Being better than the worst federal maternity leave system in the OECD isn't necessarily an objective victory, even if it is a positive point - we still have a lot of room for improvement.

For example, the new legislation in San Francisco brings the length of maternity leave to the same level as in Australia - six weeks. The OECD average length of paid maternity leave is 17.7 weeks, with the period extended as long as 43 weeks in countries like Greece. For the total amount of paid leave available to mothers, Australia's 18 weeks pales in comparison to the OECD average of 54.1 weeks.

 Greece has paid parental leave systems that the OECD says are superior to ours.

We are also behind many countries - and San Francisco - when it comes to the proportion of income that parental leave covers. The OECD data shows that minimum wage payments account for, on average, 42 per cent of what people earned prior to taking the leave.

Chile, Estonia, the Netherlands and Spain are just four of many countries that account for 100 per cent of average earnings, all with longer leave periods.

When it comes to Australia vs USA, we come out on top - but we still have a long way to go compared to many other countries. Paid parental leave helps Australian families at a time when budgets can be stretched thin - not to mention the effort it takes to continue building financial security during this time.

If you need financial advice ahead of a potential parental leave period, talk to your local Yellow Brick Road representative about making your money work.

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