Parental leave in Australia: key things to know
Congratulations! You’re expecting a baby. Here’s what you need to know about parental leave in Australia.
How much time can I take off?
In Australia, a new baby’s primary carer is entitled to 12 months unpaid parental leave, or 24 months if your employer agrees. The leave period can start up to six weeks before the baby’s birth date. If the non-pregnant partner is the primary carer, the unpaid leave entitlement is the same, but starts on the baby’s birth date. Both parents – if married or de facto – are entitled to an eight-week period of concurrent leave inside the 12-months after the baby’s birth, and this can be taken in separate chunks of no less than two weeks each. In this situation, a sympathetic employer might agree to shorter periods where you can both take time off together.
What financial assistance can I access?
Australia’s government-funded Paid Parental Leave scheme provides eligible parents with up to 18 weeks of Parental Leave Pay at the national minimum wage: $695 a week before tax (correct in October 2017). To be eligible, you must be the new baby’s primary carer, have worked 10 of the 13 months preceding the birth of your child, and 330 hours in that 10-month period (that’s just over one day a week) with no more than an eight-week gap between working days. Full-time, part-time and casual workers can be eligible, as can contractors and the self-employed, and the above rule applies to you too.
You’ll also need to have earned an individual adjusted taxable income of $150,000 or less in the financial year either before the baby’s birth date or the date on which you claim (whichever is earlier). Finally, you must not be working at all from the time you become your child’s primary carer until the end of your Paid Parental Leave period. If you do work, you’re no longer allowed to claim the payments.
Partners are not forgotten; in addition, the primary carer’s partner is entitled to a maximum of two weeks of $695 Dad and Partner Pay instalments, on top of the Paid Parental Leave already being claimed by the other parent. Eligibility conditions are the same, and you can’t be working while you receive these payments.
This all applies to adopting parents too – just swap the baby’s birth date for the day your new adoptee comes into your care.
Parental Leave Pay is paid to you by the Australian Government, but can be delivered to you by your employer. You may also be due payments from your employer’s own parental leave policies, so you might be receiving two sets of payments – one from the government, one from your employer. Although there was discussion in the run-up to the 2017 Federal Budget about cutting this ‘double dipping,’ you’re still allowed to access both the government’s and your employer’s parental leave payments.
Usually your employer will receive the government’s Paid Parental Leave instalments then pass them on to you, just like your usual pay, withholding tax and super. You can opt to have the payment paid directly to you from the government, and self-employed people will receive their payments this way.
Remember, Paid Parental Leave is a taxable payment – so it will have implications for your existing family assistance entitlements, child support arrangements and overall tax bill. And, despite the name, Paid Parental Leave is just money, not time off work. The length of your leave period from your job needs to be arranged with your employer, and you should have this discussion as soon as possible once you’re pregnant.
What about parents who don’t work?
You may be eligible for the Newborn Upfront Payment and Newborn Supplement. This non-taxable lump sum of $540 is available to parents who are eligible for Family Tax Benefit Part A.
The Newborn Supplement amount depends on your income and how many children you have. The maximum amount is $1,618.89 for your first child. For more details on calculating your eligibility visit the Australian Government Department of Human Services’ guide: https://www.humanservices.gov.au/individuals/enablers/payment-rates-newborn-upfront-payment-and-newborn-supplement.