Planning for baby

Going from two salaries to one and the costs of baby items can be daunting, but you can keep within budget.
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02.Paid parental leave and baby bonus

The Paid Parental Leave (PPL) scheme is an entitlement for working parents of children born or adopted from 1 January 2011. Parents get up to 18 weeks of government-funded PPL at the rate of the National Minimum Wage ($622.10 a week before tax at 1 July 2013).

In contrast to the Baby Bonus, which is tax-free, PPL is considered taxable income and has bearing on Family Assistance and Social Security payments.

To be eligible for PPL you can’t be working during the time it is paid and must have had a personal income of no more than $150,000 in the financial year before your baby is born. You must also have worked for at least 10 of the 13 months prior to the birth or adoption of your child, and worked for at least 330 hours in that 10-month period (just over one day a week) with no more than an eight-week gap between two consecutive working days.

Baby Bonus

If you’re not eligible for PPL, you can receive the Baby Bonus that’s paid to families after the birth or adoption of a baby. You can also choose to receive the Baby Bonus instead of PPL. The Baby Bonus is not considered taxable income and therefore has no bearing on Family Assistance or Social Security payments. 

If your child was born or adopted before 1 July 2013, the Baby Bonus to which you’re entitled is $5000. If your child was born or adopted on or after 1 July 2013 (or you became eligible for Baby Bonus on or after 1 July 2013), the bonus is either $5000 or $3000 depending on your situation.

From 1 March 2014, the government will increase Family Tax Benefit Part A (FTB Part A) payments by $2000, to be paid in the year following the birth or adoption of a first child or each child in multiple births, and $1000 for second or subsequent children. The additional FTB Part A will be paid as an initial payment of $500, with the remainder to be paid in seven fortnightly instalments.

To be eligible for the Baby Bonus, your family can only earn up to $75,000 (adjusted taxable income) in the six months following your baby’s birth or adoption. You must lodge a claim for the Baby Bonus in the 52 weeks following your baby’s birth.

The Coalition's Paid Parental Leave policy

Under the new Abbott government’s scheme, mothers will receive their normal salary (up to $75,000 - that is, half of their annual salary as long as it is $150,000 per annum or lower) for 26 weeks, plus super. Fathers can take two out of the 26 weeks at their actual salary, plus super. The scheme is supposed to start from 1 July 2015, but is yet to pass both Houses of Parliament.


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