Compared to advanced countries, childcare leave subsidies have been slow in coming to Taiwan. Their passage in this time of high unemployment testifies to the government's concern for women and determination to raise the birthrate. But it will take effort from all concerned for these subsidies to become more than "look but don't touch."

On March 31 the Legislative Yuan passed amendments to the Employment Insurance Act. Changes included raising the maximum age for compulsory enrollment in unemployment insurance from 60 to 65; and bringing working spouses from foreign countries, mainland China, Hong Kong, and Macao within the insurance system. But perhaps the most noteworthy change is the provision of subsidies for parents taking childcare leave. These subsidies will finally make good on the fine intentions of the childcare provisions in the Gender Equality in Employment Act.

Taiwan initiated a childcare leave policy in 2002, but it has not been used much. Of the more than 74,000 cases of one-off birth payments last year (in which a woman receives the equivalent of one month's salary after giving birth, paid out of the labor insurance system), only 3691 people applied for childcare leave. The main reason is that childcare leave is unpaid-you can hold on to your job, but you lose your salary for that period of time-and there has never been a corresponding subsidy to compensate. Few people have been able to accept giving up income just when there is an additional mouth to feed and plenty of new expenses.

When the new law comes into effect, any worker or employee with a child of three years old or younger may apply for a subsidy of up to 60% of the salary on which their labor insurance premiums are calculated. The maximum payment per month has been set at NT$26,340. Both parents may apply, for up to six months each, making a total of one year.

In mid-April, the Examination Yuan also finished drafting proposed amendments to the Civil Servant and Teacher Insurance Act with similar effects. The amount paid for childcare leave will be the same as that in the amended Employment Insurance Act (i.e. 60% of the salary used to calculate civil-service health insurance premiums), except that the maximum payment will be NT$30,888.

Who will apply?

With the subsidy, laborers face only a small loss of income, so logically speaking more should be willing to have children and enjoy the pleasure of raising them at home. However, will it really be so easy for people to go back to work after taking leave? This is something a lot of working people are worried about.

People in the business community say that under current economic conditions-with many people being laid off or being forced to take unpaid vacations-most employees are worried their jobs will disappear, and that if they take a long time off there will be no job to come back to, or that they will be "penalized" with a transfer or salary cut after returning. Thus there are concerns that the subsidies may just be "gilding the lily" for those with "iron rice bowls"-essentially civil servants and teachers or employees of state-run enterprises with no job security worries. Employees of private-sector firms will not dare to ask for leave so readily.

National Association of Small and Medium Enterprises chairman Roscher Lin states that given the weak state of the economy, if a person takes childcare leave their co-workers will have to pick up the slack. Few businesses want to hire a new person just to fill a short-term gap. Small and medium businesses in particular are usually understaffed as it is, so anyone wishing to ask for leave will have to run the gauntlet of coworkers' resentment. In order to protect the interests of both leave-takers and those at the office or factory, the Council of Labor Affairs' Bureau of Employment and Vocational Training (BEVT) has adopted some supporting measures.

BEVT director-general Chen Yi-min says that the BEVT has established a database of "temp" workers for businesses trying to find substitute employees. Moreover, it also provides training to both replacement workers and those returning to work after a leave of absence.

Financial crunch?

Childcare subsidies for workers and employees will come out of the Employment Insurance Fund. (Childcare subsidies for civil servants and teachers will be paid out of the Civil Servant and Teacher Insurance Fund.) Some legislators believe that "skimming" money from this fund for childcare leave is incompatible with the original intent of having money in reserve to help workers who are laid off. Others fear that before long incoming premiums will start to fall short of outlays under these new commitments.

With unemployment (at 5.81% in March) continually climbing, and calls for unemployment benefits to be extended to nine or even 12 months, outlays are on the rise. When childcare subsidies kick in, if we assume 70,000 babies per year, and everyone with a child under three qualifies, then 210,000 people would be eligible, and payments would add up to NT$22.4 billion. Won't this break the Employment Insurance Fund?

In response, Council for Labor Affairs minister Wang Ju-hsuan says that according to surveys done in the past, only about half of the eligible women in the labor insurance pool would take leave with a subsidy. If men are included, even maximum estimates only call for outlays of NT$8 billion per year. The Employment Insurance Fund currently has NT$60 billion, which should be enough to cover simultaneous payment of childcare subsidies and unemployment benefits. What's more, it is possible under the law to raise the rate of premiums for unemployment insurance as high as 2%, while right now they are only at 1%.

Imperfections

Some people worry about the legitimacy of the financial sources, but few people are giving much thought to the question of fairness. Lin Wan-i, a professor of social work at National Taiwan University, argues that childcare leave subsidies should include a social policy dimension of support for the weak and poor. Unfortunately, he says, the new rules do not.

Taiwan's birthrate is the lowest in the world, at only 1.1 children in a lifetime per woman. The two main reasons are "the high pressures associated with caring for a child" and "the high costs of raising a child." The provision of a childcare subsidy has the two-edged goal of raising women's labor-force participation rate and also their willingness to have children. It's just that, using the standard of salary on which labor insurance premiums are paid, those with higher salaries will receive higher subsidies, while the disadvantaged and low-wage workers will get much less. This is less equitable and just than using overall "average income" as the basis for calculation.

Currently, monthly salaries for calculating labor insurance premiums are divided into 22 grades, from the lowest at NT$17,280 to the highest at NT$43,900. The childcare subsidies thus could differ by as much as NT$16,000 per month, or over NT$190,000 per year.

"The emphasis should be on 'childcare,' not 'leave,'" says Lin Wan-i. If that were the case, he concludes, it would be inappropriate to have differences in subsidies correlated to the person's on-the-job pay. Moreover, a lot of people are excluded from this policy, such as self-employed persons and those with no fixed employer (who join the insurance system via professional associations but are not eligible for unemployment insurance), workers in micro-firms with less than five employees that have not joined the labor insurance scheme, and so on. They have their interests, too, which deserve attention.

Despite these concerns, it is a great thing for children, for parents, and for society that most working parents can now temporarily leave the workplace and stay home to raise children up to age three without having any financial worries hanging over their heads. The government has done much to eliminate various obstacles and courageously taken the first steps. It is to be hoped that a consensus will rapidly take shape in the business community so that everyone can genuinely take advantage of childcare leave subsidies.