02.Paid parental leave and baby bonus
Paid Parental Leave or Baby Bonus
The Paid Parental Leave scheme is an entitlement for working parents of children born or adopted from 1 January 2011. You get 18 weeks of government funded Parental Leave Pay at the rate of the National Minimum Wage ($589.40 a week before tax at 1 January 2012).
In contrast to the Baby Bonus which is tax-free, Paid Parental Leave is considered taxable income and has bearing on Family Assistance and Social Security payments.
To be eligible for Paid Parental Leave you can’t be working during the time it is paid and must have had a personal income below $150 000 in the financial year before your baby is born. You also must 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.
If you’re not eligible for Paid Parental Leave you can receive the Baby Bonus that is paid to families after the birth or adoption of a baby. You can also chose to receive the baby bonus instead of paid parental leave. The Baby Bonus is not considered taxable income and therefore has no bearing on Family Assistance or Social Security payments.
You receive $5437 in 13 fortnightly instalments, you receive a higher first instalment of $879.77 and 12 fortnightly instalments of approximately $379.77. For babies born after 1 September this year, the Baby Bonus will be cut by $400.
To be eligible for the Baby Bonus you need to pass the income test: 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.
For more information see Family Assistance Office and Department for Families.