In a recent Tax Notes article, our colleagues Michael Strain and Alan Viard raise a number of concerns about the idea of funding paid parental leave through Social Security. The idea, proposed by Kristin Shapiro and one of us, would allow a worker to claim 12 weeks of paid parental leave, with the benefits calculated based on the Social Security Disability Insurance benefit formula and paid by the Old Age program.
The advantage of the proposal, relative to several other ideas, is that it imposes no new taxes on workers or employers, nor does it mandate that employers provide leave on their own. Instead, workers would qualify for the benefit through continued employment for four calendar quarters prior to claiming the benefit. The Social Security benefit formula is progressive in that median earners would get a wage replacement rate of 59%, while low income earners would get a 68% replacement rate.
Read Full Article »