Guide to Paid Parental Leave

Key points

  • Provides up to 18 weeks of paid leave for eligible employees
  • Eligibility depends on a number of things including income tests, work tests and residency tests
  • Paid at the rate equivalent to the National Minimum Wage (currently $772.55 per week)
  • Generally won’t affect employer benefits you might also be entitled to during parental leave
  • Usually paid to the birth mother of a newborn child or the primary carer of an adopted child
  • Considered taxable income so it may affect other government benefits you are entitled to

Background

The Federal Government funded Paid Parental Leave Scheme provides eligible employees with up to 18 weeks of paid parental leave. The leave is paid at the rate of the National Minimum Wage.

Eligibility

To be eligible for the Paid Parental Leave Scheme you must:

  • Be the primary carer of a newborn or newly adopted child, usually the birth mother, the initial primary carer of an adopted child or in exceptional circumstances, another person
  • Meet an income test – you earned $150,000 or less in the 2019/20 year or less than $151,350 in the 2020/21 year
  • Meet a work test – you must have worked for 10 months in the 13 months before the birth or adoption of the child, you must have worked a minimum of 330 hours in those 10 months and you must not have had more than 12 weeks gap between work days (there are some exceptions to this requirement for pregnancy related illness and dangerous jobs). There is also an extended work test covering 20 months if your work has been affected by COVID-19.
  • Meet the residency test – you must be living in Australia, you must be a citizen, permanent resident or hold certain special category or temporary visas
  • Have registered or applied to register your newborn child
  • Not be working during the Paid Parental Leave period.

You can get more details on eligibility from Fair Work Australia or Services Australia

How it works

The Paid Parental Leave Scheme gives eligible employees up to 18 weeks of paid parental leave. The leave consists of:

  • 1 set period of 12 weeks’ leave that must be taken as 1 continuous period and be used within 12 months of the birth or adoption of the child
  • 1 flexible period of up to 30 days which can be taken in flexible periods negotiated between the employer and the employee, this period must be taken within 24 months of the birth or adoption of the child and usually starts after the end of the first set period.

Payments

Payments under the Paid Parental Leave Scheme are generally made by the government to the employer and then from the employer to the employee. Payments under the Paid Parental Leave Scheme should not alter any other employment entitlements such as employer funded parental leave entitlements. The payments under the Paid Parental Leave Scheme are equivalent to the National Minimum Wage – currently $772.55 per week.

How to make your claim

To make a claim under the Paid Parental Leave Scheme you need to:
  • Talk to your employer at least 10 weeks before the expected date of birth or adoption date of your child. This will allow your employer time to register
  • Setup a mygov account if you don’t already have one
  • Complete the claim form
  • Get your supporting documents ready
  • Make your claim online in mygov

Things that might affect your claim

There are a number of things that might affect your claim under the Paid Parental Leave Scheme. These include:
  • travelling outside Australia
  • returning to work during the Paid Parental Leave period (though you can negotiate up to 10 “staying in touch days” with your employer)

Payments under the Paid Parental Leave Scheme are considered taxable income so they can affect anything else you receive, including other government benefits, that depend on your level of taxable income. This includes:

  • child support payments
  • HECS liability payments
  • Medicare Levy Surcharge
  • public housing rent
  • low income and concessional health care cards
  • pensioner and beneficiary tax offsets
  • Family Assistance payments
  • income support payments

You can get more details about the Paid Parental Leave Scheme from Fair Work Australia or Services Australia.

This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711). The information in this summary is of a factual nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) or the Australian Taxation Office.

More Posts

Money

Your Spending Hit List

Key points Most people we speak to have some obvious ways to save money They take a bit of effort and discipline but if you

Read More »


Facebook-f


Twitter




Contact Us  |  About Us  |  Terms of Access  |  Privacy Policy  |  Service Status

Copyright © All rights reserved