Curious about how Parental Leave Pay works? Don’t stress, we’re here to help! Let’s walk through the details so you can get a clear understanding of what it offers and how it can support you during this special time. 🙌
What is Parental Leave Pay?
Parental Leave Pay is a fantastic government support initiative for parents who are taking time off to care for a newborn or newly adopted child. It’s designed to help ease some of the financial pressures during those precious early months, giving you the time to bond with your little one without worrying as much about income.
Eligible parents can receive this payment for up to 18 weeks, which can make a real difference in supporting the family budget during this life-changing period. Whether you’re preparing to welcome a baby or finalising an adoption, Parental Leave Pay is there to help you focus on what matters most – those first moments together as a family
Who Can Get It?
To qualify, you need to be the primary carer of your child, and you must meet certain work and income tests. This includes having worked at least 10 of the 13 months before the birth or adoption and having earned below a set income threshold.
Also, to receive the payment all of the following must apply. You must:
1. Be caring for a child born or adopted from 1 July 2023
2. Meet the Income Test:
Individual Income
Your individual adjusted taxable income must be:
🔹$175,788 or less for the 2023-24 financial year, or
🔹$168,865 or less for the 2022-23 financial year.
Family Income
If you don’t meet the individual income test, you can use the family income test. Your and your partner’s combined adjusted taxable income must be:
🔹$364,350 or less for the 2023-24 financial year, or
🔹$350,000 or less for the 2022-23 financial year.
3. You must not be working on days you receive Parental Leave Pay, except for allowable reasons or if you are operating a business under Self-Employment Assistance scheme
4. Meet the Work Test:
🔹You must have worked at least 10 of the 13 months before your child’s birth or adoption. Services Australia considers 10 months as 295 days and 13 months as 392 days.
🔹Within those 10 months, you need to have worked a minimum of 330 hours (about one day a week).
🔹If you’re self-employed, you can still meet this test by including hours worked for financial reward or gain, even if your business isn’t currently profitable. This covers:
→Providing goods and services for hire or reward
→Running a business (including as a partnership or enterprise)
→Working for a trust operating as a business
5. Meet the Residency Rules:
🔹You must be living in Australia at the time of your child’s birth or adoption and have:
→Australian citizenship
→A permanent visa
→A Special Category visa, or
→A certain temporary visa (such as a partner provisional or temporary protection visa)
6. If your child is a newborn, you must have registered or applied to register their birth with your state or territory birth registry.
Payment Details
You’ll receive a weekly payment at the current minimum wage rate. The total payment lasts for up to 18 weeks, but you can choose to take it at a time that suits you within the first year after your child’s birth or adoption.
How to Apply
You can apply for Parental Leave Pay through Centrelink using your MyGov account. Make sure to apply before your baby is born or as soon as possible after adoption.
Important Things to Note
🔹While you’re receiving Parental Leave Pay, you can’t work on any day for which you receive a payment. This includes managing your business or doing daily tasks.
🔹You also need to avoid spending more than one hour on occasional work-related tasks, like paying bills or checking on deliveries.
Sole Traders Not Taking a Salary
Claiming Parental Leave Pay
To claim Parental Leave Pay, you need to:
🔹Register and Apply Online: You can apply through the Australian Government’s Centrelink online services via your MyGov account.
🔹Submit Proof of Birth: After your child is born, you’ll need to provide proof of birth to complete your claim.
Can I work while receiving Parental Leave Pay?
Even if you run your own business, when you’re on Parental Leave Pay, you won’t be able to work on any day you choose to receive the payment including running your business or handling daily operations.
You also need to avoid spending more than one hour on occasional tasks like:
🔹Paying bills and reconciling bank accounts
🔹Checking on order deliveries
🔹Approving business accounts
🔹Resolving disputes
🔹Organising repairs
🔹Arranging replacement staff for your absence
🔹Maintaining basic client contact
🔹Keeping up with your professional skills
While accessing Parental Leave Pay, it’s essential to genuinely take a break from work. This means stepping away (almost) fully, only doing what is minimally necessary to keep the business going in your absence.
And that’s it! Parental Leave Pay might feel a little tricky to navigate, but it’s all about providing the support you need when it matters most. 😊
Legal Disclaimer: The information on this site is based on sources believed to be reliable; however, we do not guarantee its accuracy or completeness and accept no liability for any loss or damage arising from reliance on this information. Always consult a financial advisor to assess the suitability of any information or strategies mentioned here with respect to your specific situation.