Paid parental leave

In the past paid parental leave entitlements in Australia have been at the discretion of your employer. In January 2011 all this changed with the government backed national paid parental leave scheme. This parental leave scheme ensures that parents who meet certain conditions will be eligible to claim a set amount per week, for up to 18 weeks, in the first year after a baby’s birth or adoption. Parental leave schemes are common in most of the developed world so in the area of paid parental leave Australia is finally catching up. The Family Assistance Office is administering the paid parental leave scheme and can be contacted for further information.

18 weeks paid parental leave

If you are expecting a baby or babies you can look forward to paid parental leave for the first time from January next year, Parliament passing the historic legislation on June 17.

For the first time ever mum and dad will have pay while they take leave from work to have their baby. The income tested scheme will pay either the employed mother or the father the equivalent of the minimum wage or about $570 a week for 18 weeks as long as their income does not exceed $150,000 a year.

When will this paid parental leave scheme begin?

This historic scheme will begin on January 1, 2011 and will apply to eligible mum or dad of children born or adopted on or after the New Year.

If you think you are eligible for this scheme you should lodge your claim before the birth or adoption of your child – this will help prevent any delay in providing Parental Leave pay.

If you are expecting babies then you can claim for Parental Leave pay for the first child and baby bonus for second and subsequent children. So you can claim the 18 weeks paid leave for your first child and the $5000 baby bonus for your second child. You really do need all the help you can get.

Eligibility

But not everyone is eligible. To receive this much needed pay you need to meet the eligibility criteria. Firstly you need to be an Australian resident and be the primary care-taker of your baby and your income should not have exceeded $150,000 a year. If you are applying for this then your partner’s pay won’t be taken into consideration.

Finally you must meet the work test criteria,

Those on irregular or casual contracts may fail the regular employment test. You should have been in paid work for minimum 10 months out of the 13 months prior to the birth or adoption of your child.

You should have worked a minimum of 330 hours in the above 10 month period and you should not have taken more than an eight week holiday between working days. A working day is considered where you should have worked for a minimum of one hour.

How will I be paid?

Parental Leave Pay will be paid to you either by your employer in your usual fortnightly or monthly pay cycle or by the Family Assistance Office in fortnightly payments.

Paid Parental Leave scheme claiming FAQ’s

Will I be better off?

Having a baby places a burden on your family’s finances especially if you have to rely on only one income. The government has reported that more than 85 percent Australian families will be better of receiving this pay. These families will receive an additional $2000 more than the $5000 baby bonus they would have claimed and this after tax has been paid and other assistance has been taken into account.

How do I know whether to claim baby bonus or Parental Leave pay?

You can call Family Assistance Office on 13 61 50 0r visit their website www.familyassist.gov.au.

When can I claim?

You should lodge your claim at least three months before the birth or adoption of your child. You can lodge this claim online or fill up a paper form at the Family Assistance Office office.

Once your child is born it’s important you register her birth because payments won’t start until then.

Is it taxed?

Yes this pay is taxable and it can affect your other assistance such as Family Tax Benefit or child support.

What if I want to go back to work?

If you decide to go back to work your payments will stop. You are better off applying for baby bonus if you want to go back to work before the 18 weeks. Alternatively you can share the 18 weeks with your partner after discussing it with the Family Assistance Office. For example you can take 10 week leave and your partner can take the remaining weeks.

Does my employer have to pay for this?

No, this scheme is being fully funded by the Australian government.

What if my baby is overdue and I don’t meet the work test?

Not to worry, the Family Assistance Office will take that into account.