Parental allowance

What it means

The parental allowance is a state benefit for caring for a child under three, paid by the labour office. It is not a Social Insurance Agency benefit like maternity benefit.

Parental leave with the employer is a separate matter: an absence during which the employment continues and the job is held open.

Entitlement to the allowance does not depend on whether the parent worked before, and it does not end automatically if they earn something on the side while caring; it is a benefit for caring for the child, not a replacement of income. That sets it apart from maternity benefit and from wage compensation, whose amounts follow previous earnings.

How it works in practice

Payroll treats it as a period without income under the correct code with the insurers. The employee stays on the books and the personnel file holds the agreement on its length.

Fathers can take parental leave too, including at the same time as the mother where another child or an alternation is involved. Knowing the return date in advance helps team planning.

On returning from parental leave the employee is entitled to their original job and workplace. In payroll we report that insurance resumes and set the average earnings as probable earnings, because there is nothing to base them on from the preceding period without income; holiday pay and pay for other absences rest on that figure.

What to watch out for

A position cannot be abolished during parental leave simply because the person is away. If an organisational change genuinely happens, the entitlements are handled properly and with severance.

A replacement worker is hired on a fixed-term contract. If that contract ends on a fixed date and the parent returns earlier or later, the post is either filled twice or the contract ends too soon; it is safer to tie it to the duration of the cover, or a dispute over the termination of employment can follow.