BUDGET UPDATE: The Federal Government has announced major changes to the Paid Parental Leave Scheme as part of the 2022 Budget, announced on March 29.
The changes are:
- There will no longer be a separate Dad and Partner Pay. It will be merged with Parental Leave Pay to create a new 20-week Parental Leave Pay scheme.
- Single parents will be able to access the 20 weeks
- Two-parent households will be able to split the PPL however they like (but must do so within 2 years of the baby’s birth or adoption)
- This means dads and partners can now access Parental Leave Pay at the same time as any employer-funded parental leave pay.
- The income test will now look at household income rather than the Primary Carer’s individual adjusted taxable income. Households earning up to $350,000 a year will now qualify for the scheme, which is currently limited to women earning up to $151,350.
- According to the Federal Government changes announced are set to be introduced “no later” than March 1, 2023.
In Australia, eligible parents can access 18 weeks of Parental Leave Pay following the birth or adoption of their baby.
The Paid Parental Leave scheme was introduced in 2011 to help working parents spend more time at home with a new baby in those vital early months. It is fully government-funded.
The scheme provides eligible parents with up to 18 weeks’ of Parental Leave Pay at the National Minimum Wage. The amount is currently $772.55 a week before tax (correct as of March 2022).
But how do you know if you’re eligible for Parental Leave Pay? How much do you need to work before your baby is born? Are casual and part-time workers eligible? And what about Dad and Partner Pay—will your partner be eligible to receive this as well?
Here we answer your questions about Parental Leave Pay in Australia …
Who is eligible for Parental Leave Pay?
To be eligible for Parental Leave Pay you must:
- be the primary carer of a newborn or recently adopted child
- have worked 10 of the 13 months before the birth or adoption of your child, and
330 hours in that 10 month period (just more than one day a week) with no more than a 12-week gap between two consecutive working days. You may be eligible if you work full-time, part-time, casually, seasonally, as a contractor or for yourself. .
- meet the Paid Parental Leave income test — have received an individual adjusted taxable income of $150,000 or less in the financial year either before the date of birth or adoption, or the date you claim, whichever is earlier.
- be on leave or not working from the time you become your child’s primary carer until the end of your Paid Parental Leave period.
- meet residency rules and be an Australian citizen or permanent resident, and generally have served a two-year waiting period if you’re a newly arrived migrant
How much money will you receive in Parental Leave Pay?
Parental Leave Pay is currently $772.55 a week before tax for a maximum of 18 weeks (amount correct as of March 2022). The 18-week Paid Parental Leave period includes a 12-week block and 30 flexible Paid Parental Leave days (which must be used before your baby turns 2).
It is a taxable payment—which means it may affect your existing family assistance entitlements, child support arrangements and tax obligations.
You are able to access PPL even if your employer also offers paid maternity leave.
How is the Parental Leave Pay paid to you?
Parental Leave Pay can be paid to you by your employer or directly from the government.
Usually your employer will receive the amount from the government and then pay it to you in your usual pay cycle. This allows them to withhold your usual amount of tax and allow for any other payments or contributions that you regularly make (super, salary sacrifice etc).
In some circumstances, the government may opt to pay you directly—for example, if you’re no longer employed, if you’re self-employed or if you or your partner receive an income support payment from Centrelink.
You should begin talking to your employer about Parental Leave Pay at least 10 weeks before the date you intend to start your leave.
How much leave are you entitled to?
The scheme provides you with 18 weeks of Parental Leave Pay but does not give you an entitlement to leave. You need to work out your maternity leave entitlements with your employer as it is based on how long you’ve worked for them and any company policies they have. Make sure you have this conversation with at least 10 weeks’ notice.
Can you do any work while you’re receiving Parental Leave Pay?
If you return to work before the end of your Paid Parental Leave period you are no longer eligible to receive the payment.
However, there is a provision in the scheme that allows you to keep in touch with your employer and ease your transition back into the workplace. The Keeping In Touch provision allows you to access 10 ‘keeping in touch’ days while you are receiving Parental Leave Pay. A paid work activity of ONE hour or more on a day counts as ONE Keeping in Touch day, and counts towards the 10-day limit.
Your employer is required to pay you for your time. But a Keeping in Touch day won’t affect your Parental Leave Pay payments and won’t extend your leave. It should be to:
- refresh your skills
- transition back to the workplace
- become familiar with new or updated processes, or
- be involved in planning discussions or meetings that may affect your role
If you run your own business you cannot return to actively running it—performing the daily operations—while you’re receiving Parental Leave Pay. You can, however, before basic occasional tasks to ensure it remains operational, this includes things such as organise a repair, pay an account, check on a delivery order, manage a dispute and maintain basic contact with clients.
What about if you don’t work—is there a payment for non-working mums?
The Baby Bonus was scrapped in 2014 but you may be eligible for the Newborn Upfront Payment and Newborn Supplement. This payment is available to parents who are eligible for Family Tax Benefit Part A.
The Newborn Upfront Payment is a lump sum of $575 (correct as of March 2022).
The Newborn Supplement amount depends on your income and how many children you have. The maximum amount is $1725.36 or your first child or a maximum of $576.03 for subsequent children (amounts correct as of March 2022). This amount is added to your Family Tax Benefit Part A as a supplement so you’ll receive fortnightly if that’s how you’ve chosen to receive Family Tax A.
Can your partner access the Dad and Partner Pay?
Eligible dads or partners can access two weeks of government-funded pay after the birth of a baby or adoption of a child.
To be eligible the dad or partner must:
- provide care for a newborn or recently adopted child
- meet an income test
- have worked at least 10 of the 13 months before the date their Dad and Partner Pay period starts, and 330 hours in that 10 month period (just more than a day a week) with no more than a 12-week gap between two consecutive working days.
- be on unpaid leave or not working while getting the payment
- make a claim within 52 weeks of the child’s birth or adoption
Dad and Partner Pay is $772.55 a week before tax (correct as of March 2022). The government pays the money into a nominated bank account after the child is born and the claim finalised.
Dad and Partner Pay does not change leave entitlements and your partner should check with their employer as to what leave they are entitled to.
This article is intended as a general guide to Parental Leave Pay and other family benefit payments in Australia. To check your eligibility based on your own circumstances contact the Department of Human Services.