Paid Parental Leave

Posted November 24th, 2010 in Ume's Pregnancy No Comments »

Having a baby in 2011?  The Paid Parental Leave scheme starts 1 Jan 2011, which will provide eligible working parents with 18 weeks of Parental Leave Pay at the National Minimum Wage, currently $570 a week before tax.

All the information is available from Family Assist website, but I want to list down the key factors for myself and also others who are interested in knowing this scheme.


Baby Bonus

  • Pays eligible parents $5,294 (effective 1 July 2010 to 30 June 2011) per eligible child in 13 equal fortnightly instalments.  
  • Baby Bonus is payable for each child in a multiple birth.  Which means, if you have a twin, you get 2 xBaby Bonus.
  • Before, Baby Bonus was not an income tested payment, but it is now.  (income test)
  • Baby Bonus is not taxable income.

Check your eligibility for Baby Bonus → Eligibility

To claim a Baby Bonus: claim must be lodged within 52 weeks of the child’s birth (or in the case of adoption, within 52 weeks of the adopted child coming into the adopting parent’s care)  Hospital will usually pass you the claim form at the time of birth, but you can also obtain the form through Family Assistance Office or lodge online at


Paid Parental Leave

  • From Jan 2011, you can chose to receive either Baby Bonus or Paid Parental Leave for your child if you are entitled.  
  • Parental Leave Pay will be fully funded by the Government.
  • Eligible working parents will receive Parental Leave Pay at $570 a week for a maximum period of 18 weeks. 
  • You should lodge your claim at the Family Assistance Office, Centrelink Customer Service Centres, or online before the birth or adoption of your child. (you can lodge up to three months before)
  • Paid Parental Leave is taxable income.
Things You Should Know
  • You can not get both Baby Bonus and Paid Parental Leave for the same child. 
  • If you have worked for 12 months or more for the same employer you are entitled to up to 12 months unpaid parental leave. (
  • Parental Leave Pay will be provided to you by either your employer in your usual pay cycle (employer will be funded by the Australian Government) or by the Family Assistance Office in fortnightly payments. (from 1 July 2011, your employer must provide your Parental Leave Pay if you have worked with them for at least 12 months prior to the expected date of birth or adoption of your child and you will be receiving at least eight weeks of Parental Leave Pay.)

If your employer provides your Parental Leave Pay:

  • You will be able to access other paid leave such as maternity leave, however this may mean you will be taxed at a higher rate.
  • They can deduct child support from your Parental Leave Pay if they are required to do so.
  • You may arrange for other deductions to be made from your Parental Leave Pay.
  • You may salary sacrifice some or all of your Parental Leave Pay. For example, you may make voluntary contributions to superannuation. You must agree these arrangements with your employer as you do with wages. 
  • Your employer will not be required to make superannuation contributions on your Parental Leave Pay.

If Family Assistance Office provides your Parental Leave Pay:

  • We will withhold PAYG at the rate of 15 per cent unless you request another rate.
  • You will not be able to salary sacrifice Parental Leave Pay that is provided directly by us.
  • You can voluntarily request a Family Assistance and/or Centrelink debt to be deducted.

Centrelink FAQ


Baby Bonus or Paid Parental Leave?

First, you need to check if you are eligible for both payments.  

Baby Bonus → Eligibility  

Paid Parental Leave →Eligibility 

If you are eligible for both payment, you can chose to receive either one of the payment.

Baby Bonus is $5,294, but it is considered to be not a taxable income.  On the other hand, Paid Parental Leave gives you the total benefit before tax of $10,260.   However, this money is considered to be taxable income and may affect your Family Tax Benefit as well as the followings:

  • Child Care Benefit
  • Child Support
  • HECS liabilities
  • Medicare Levy Surcharge
  • Public Housing Rent
  • Low Income or other Health Care Cards, or other associated concessions
  • Pensioner, Beneficiary, Dependent Spouse, Housekeeper and Child-housekeeper tax offsets.

To see which payment is best for your family, you should use the  Paid Parental Leave Comparison Estimator.

The result may vary depending on the date you wish to start receiving Parental Leave Pay, therefore it is recommended that you try different dates to determine the best financial decision for your family.

After 34 weeks following the birth or adoption, the number of weeks you will be eligible to receive Parental Leave Pay for will reduce. (refer the table below)

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