Forget the Baby Bonus: the Australian government has officially introduced the new Paid Parental Leave (PPL) scheme, which gifts new parents who have been working with almost $10,000.
The scheme has been designed to help ease the financial burden of having a baby and losing an income for working mothers, by delivering the equivalent of the National Minimum Wage for a period of 18 weeks.
Currently the minimum wage is $543.78 a week, so mothers will receive up to $9,788 across the four-month period. If you choose to return to work within those 18 weeks, you will forfeit your PPL payments.
Are you eligible?
In order to receive Paid Parental Leave, you must satisfy the following criteria:
Date of birth
Mothers of babies born on or after 1 January 2011 will be eligible. The initial primary carer of a child aged under 16 years who is adopted on or after this date may also be eligible.
Satisfy the work test
You must meet the PPL work test before the birth or adoption occurs. You meet the work test if you worked continuously for at least 10 of the 13 months prior to the birth or adoption of your child, and you worked for at least 330 hours in that 10-month period (equivalent to around one day a week).
You may be regarded as working continuously even if you work part-time or casually, have multiple employers, or recently changed jobs.
Satisfy the income test
Paid Parental Leave is means-tested, so you must earn an individual income of $150,000 a year or less to be eligible.
PPL entitlements are aligned with other family assistance rebates and benefits, so you must be living in Australia and be:
- an Australian citizen, or
- the holder of a permanent visa, or
- a New Zealand citizen who arrived in Australia on a New Zealand passport, or
- the holder of a specified temporary visa
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What about the Baby Bonus?
The Baby Bonus will continue to run alongside PPL, although new parents will have to choose one or the other.
The Baby Bonus, paid to families following the birth or adoption of a child in recognition of the extra costs incurred when having a baby, is paid in 13 equal fortnightly instalments of around $400. This amounts to just over $5,000 over a six-month period.
While the Baby Bonus is equivalent to roughly half of Paid Parental Leave entitlements, it’s important for new parents to note that PPL will classified as taxable income, and may impact your entitlement to Family Tax Benefits. On the other hand, the Baby Bonus is not taxable income and is not considered income for Family Assistance or Social Security purposes.
For all babies born before January 1 2011, new mothers will only be eligible to receive the Baby Bonus.
For further information about both the Baby Bonus and Paid Parental Leave or to check your eligibility, visit www.familyassist.gov.au or call 13 6150.