Mother denied paid parental leave after IRD gives wrong advice, ERA gets decision reversed

An expectant mother was given incorrect advice from IRD about her eligibility of paid parental leave. Photo / 123rf

A mother-to-be was denied paid parental leave after acting on wrongful advice given to her by Inland Revenue (IRD) about switching from employment to self-employment in the months leading up to her son's birth.

The woman was incorrectly told by IRD she could leave her job, which she had for 13 weeks, become self-employed and still reach the parental leave payment threshold test.

She did so, only to be denied the paid leave by IRD and then again by the Ministry of Business, Innovation and Employment (MBIE) when she took the matter further.

It was only until she filed a statement of problem with the Employment Relations Authority (ERA) that the decision was reversed and she was granted the leave.

The expectant mum called IRD three times before the birth of her son in September 2020.

She told a staff member she had been working as an employee for the University of Waikato for 13 weeks and was about to become a self-employed contractor for a clinical psychologist.

In two calls, which were recorded, she asked if that would affect her entitlements to paid parental leave.

IRD advised her she could combine the two periods of work as both
employed and as self-employed, to reach the parental leave payment threshold test, in which 26 weeks of work is required.

Based on this advice she left her job with the University of Waikato and applied for leave on August 7, 2020.

"However upon receipt of [her] application the IRD wrote to her
advising her that she did not qualify for paid parental leave because the test ... did not allow her to combine her work from employment with her work as a self-employed contractor," an ERA decision stated.

IRD apologised to her in a letter but did not change its decision.

The woman applied to MBIE requesting it to review the decision. It accepted she was given the wrong advice from IRD but did not grant her parental leave payments because it does not have "statutory discretion".

MBIE said she did not meet the parental leave payment threshold test because of the
combination of employment and self-employment.

In November 2020 the woman successfully sought a formal review of the decision by the ERA.

"In this case [the woman] relied on incorrect advice provided by a government
department," ERA member Eleanor Robinson said in her report.

"I consider that [the woman] acted reasonably in relying on that advice and that it would be inequitable ... for her to be denied parental leave payments.

"I consider it appropriate to exercise the Authority's discretion and to
reverse the decision made by MBIE that [she] did not qualify for paid parental leave."

To qualify for paid parental leave as an expectant or new mother, you must work an average of 10 hours a week, in at least 26 of the weeks in the year before your due date or the date the child comes into your care.

"It does not matter how many employers you had or if you were self-employed. However, you need to be eligible either as an employee or a self-employed person," IRD states on its website.

"You cannot combine the hours you worked as an employee with the hours you worked as a self-employed person. You can combine the hours from multiple employments."