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Paid Parental Leave scheme questions & answers for working parents

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Paid Parental Leave scheme

What is the Paid Parental Leave scheme?

The Paid Parental Leave scheme is a new entitlement for working parents of children born or adopted from 1 January 2011.

Who is entitled to Parental Leave Pay?

Working parents, including full-time, part-time, casual, contract, seasonal and self-employed workers may be eligible for Parental Leave Pay if they meet the scheme's eligibility criteria.

How much Parental Leave Pay will I receive?

Eligible working parents can get 18 weeks of government funded Parental Leave Pay at the rate of the National Minimum Wage (currently $589.40 a week before tax).

Eligibility

Am I eligible?

You may be eligible for Parental Leave Pay if you:

Your child must have been born or adopted from 1 January 2011 for you to be eligible for Parental Leave Pay.

Who is a child's primary carer?

A child’s primary carer is the person who is most meeting the child’s physical needs. This will usually be the mother of a newborn child or the initial primary carer of an adopted child.

Note: You are considered to be the primary carer of your child even if your child is in hospital

Why is Parental Leave Pay based on the mother’s income and Baby Bonus is based on joint income of the family?

It’s important to understand that the two payments have very different eligibility criteria.

Baby Bonus is a family assistance payment which can be claimed by either parent to assist with the costs of having a new baby or recently adopted child.

Parental Leave Pay is designed to be a workplace entitlement, which allows a new mother, or the initial primary carer of a recently adopted child, to spend more time away from their workplace to care for their child full-time during the vital early months following birth or adoption.

This is why eligibility for the Paid Parental Leave scheme is based on the person claiming Parental Leave Pay’s income, rather than taking into account their partner’s income.

Can I claim Parental Leave Pay if I don't live in Australia?

You may be entitled to Parental Leave Pay if you meet the scheme’s eligibility criteria including the residency requirements. You may be temporarily absent from Australia for up to three years if you are a permanent resident and for up to 13 weeks if you are an eligible temporary visa holder.

What are the residency requirements?

An Australian resident is a person who resides in Australia and is one of the following:

A person can be temporarily absent from Australia for a period of up to three years.

If the minimum wage increases, will Parental Leave Pay increase?

The rate of Parental Leave Pay will align with any increase in the National Minimum Wage.

The Paid Parental Leave work test

Do I meet the Paid Parental Leave work test?

To meet the Paid Parental Leave work test you must have:

A working day is a day you have worked for at least one hour.

There are some exceptions if you do not meet the work test due to pregnancy complications and/or premature birth.

You do not need to be working full-time to be eligible for Parental Leave Pay. You may meet the work test even if you:

If you work for a family business (such as a farm), you can include your hours of work even if the business is not generating any income, providing you are undertaking the work for financial gain or benefit.

What counts as work for the Paid Parental Leave work test?

You can include periods of work if it is done for financial reward or gain, whether in Australia or overseas.

The following activities will count as work:

What does not count as work for the Paid Parental Leave work test?

The following activities will not count as work:

What if I do not work regular days or shifts?

You do not need to be working full-time to be eligible for Parental Leave Pay. You may meet the work test even if you:

You will need to have worked for at least one hour in a day for your employment to be counted as a working day.

What if I work in a family business (such as a farm)?

If you work for a family business (such as a farm) you can include your hours of work even if the business is not generating any income, providing you are undertaking the work for financial gain or benefit.

If I work casually and not full-time hours, am I still eligible to receive the full amount of Parental Leave Pay?

If you are eligible you will be paid at the rate of the National Minimum Wage, currently $589.40 per week before tax.

Parental Leave Pay is paid at the same rate to all eligible working parents.

The Paid Parental Leave scheme is available to all eligible employees (including those that are permanent employees, casual workers, contractors and the self-employed). You have to be an Australian resident, be the primary carer, and meet the work and income tests in order to be eligible.

Can I still work casually after my baby is born while still receiving Parental Leave Pay?

To receive Parental Leave Pay, you must be on leave or not working from the time you become your child’s primary carer until the end of your Paid Parental Leave period. If you return to work before that time your Parental Leave Pay will stop from that day.

If you decide to return to work or your circumstances change before the end of your Paid Parental Leave period, you will need to notify the Family Assistance Office on 13 6150.

There are provisions in place for Keeping in Touch with your workplace, without losing your entitlement to Parental Leave Pay.

What is Keeping in Touch?

The purpose of the Keeping in Touch provision is to allow you to remain connected with the workplace without losing your entitlement to Parental Leave Pay.

The Paid Parental Leave scheme supports you to take time away from work to care for your newborn or recently adopted child. It also includes a Keeping in Touch provision to assist you in returning to the workforce following your paid and/or unpaid parental leave.

You can access up to 10 Keeping in Touch days from the time you become your child's primary carer until the end of your Paid Parental Leave period. However, you cannot access a Keeping in Touch day within the first two weeks following the birth or adoption of your child. Keeping in Touch days will not extend your Paid Parental Leave period.

You and your employer must both agree that you can take part in a Keeping in Touch activity and to the arrangements for the activity. Either party can decide they do not wish the Keeping in Touch activity to take place.

If you return to work or participate in paid work before the end of your Paid Parental Leave period for any purpose other than Keeping in Touch, your Parental Leave Pay will stop.

Claims

Can my partner claim Parental Leave Pay?

You and your partner cannot both receive Parental Leave Pay at the same time.

The birth mother or the initial primary carer of an adopted child must lodge the claim for Parental Leave Pay, unless there are exceptional circumstances.

If the birth mother or the initial primary carer of an adopted child is found to be eligible for the scheme, they can receive the Parental Leave Pay themselves or they may, if they wish to return to work early, transfer some or all of their unused Parental Leave Pay to:

The person who you transfer Parental Leave Pay must also meet the eligibility criteria and lodge a claim for the scheme. This person cannot be eligible for the scheme if the birth mother or the initial primary carer of the adopted child is not eligible.

Can I receive Parental Leave Pay and Baby Bonus?

Parental Leave Pay and Baby Bonus cannot be paid for the same child. If you meet the eligibility criteria for both payments, you can choose which payment is the best financial decision for your family.

In the case of multiple births (for example, twins or triplets), you may be eligible to receive Parental Leave Pay for one child and Baby Bonus for the other child/children.

How do I know which payment is best for me?

Most eligible families will be better off receiving Parental Leave Pay rather than Baby Bonus. You should use the Paid Parental Leave Comparison Estimator to work out which payment is best for your family.

How does the Paid Parental Leave Comparison Estimator work?

The Paid Parental Leave Comparison Estimator does not assess your eligibility for Parental Leave Pay or Baby Bonus.

The Paid Parental Leave Comparison Estimator offers you a comparison between Parental Leave Pay and Baby Bonus taking into account your circumstances and shows you which payment is likely to benefit your family most.

Does the Paid Parental Leave Comparison Estimator include references to other payments and support from the government?

The Paid Parental Leave Comparison Estimator factors the following details into its calculation:

It does not include any government income support payments, Child Care Benefit, child support paid, HECS liabilities, Medicare Levy Surcharge, public housing rent, low income or other health care cards or other associated concessions, or Dependent Spouse, Housekeeper and Child-housekeeper tax offsets.

What are the differences between the Paid Parental Leave scheme and Baby Bonus?

If you are having a baby or adopting a child, you may be eligible to receive either Parental Leave Pay under the Paid Parental Leave scheme or Baby Bonus. A Claiming Parental Leave Pay or Baby Bonus factsheet is available to answer some of the most common questions about each payment, to help you decide what the best financial decision is for your family

Will Parental Leave Pay affect my existing payments and support?

You will need to consider how receiving Parental Leave Pay will affect your existing family assistance entitlements, child support and taxation obligations.
Parental Leave Pay may affect your:

Family Tax Benefit Part B, the dependent spouse, child-housekeeper and housekeeper tax offsets will not be available to you and/or your partner during your Paid Parental Leave period. These entitlements may be available to you after the end of your Paid Parental Leave period, if you are eligible.

If you are separated from your child’s other parent and they are receiving Family Tax Benefit Part B, it will not be affected by you receiving Parental Leave Pay.

Parental Leave Pay will not be treated as income for Parenting Payment (partnered and single) and other income support payments, such as the Disability Support Pension, Newstart Allowance and Veterans’ Affairs payments.

When can I claim Parental Leave Pay?

Claims for Parental Leave Pay can be lodged up to three months before the expected date of birth or adoption of your child.

Why should I claim before my child arrives?

Lodging a claim for Parental Leave Pay before your child is born or adopted will help prevent any delay in providing Parental Leave Pay.

If I nominate my Parental Leave Pay to start on my baby's due date and I am late, will I have to wait to be paid?

Yes. Your payments can not commence until you have provided the Family Assistance Office with proof of birth of your child and any other requested information and this has been processed. To be paid from the date of birth or adoption you must have claimed for Parental Leave Pay and lodged your Newborn Child (proof of birth) form within 28 days of the child's birth or adoption.

Can I receive Parental Leave Pay before my child is born or adopted?

No. Parental Leave Pay is designed so parents can spend more time at home with their child.

Parental Leave Pay can only commence from the date of birth or arrival of your adopted child at the earliest. To be paid from the date of birth or adoption you must lodge your proof of birth within 28 days of the child's birth or adoption.

What happens if my baby arrived before the scheme was introduced?

If your baby arrived before the scheme was introduced on 1 January 2011, you will still be able to receive Baby Bonus if you are eligible.

How long do I have to claim Parental Leave Pay?

Your Parental Leave Pay can start from the day your child is born or adopted, or a later date. You can claim up to 52 weeks after the birth or adoption, but your Parental Leave Pay must be paid in one continuous 18 week period (or less) and must be fully paid within 52 weeks from the date of birth or adoption.

To be eligible for the full 18 weeks of Parental Leave Pay, the nominated start date for your Parental Leave Pay needs to be within 34 weeks of the birth or adoption of your child.

How can I claim Parental Leave Pay?

You can claim for Parental Leave Pay using Online Services. You can lodge a claim up to three months before the expected date of birth or adoption of your child.
For more information on how to claim Parental Leave Pay or other family assistance payments online, view the Claiming Parental Leave Pay and family assistance online factsheet.

If you would like to find out more about registering for Online Services you can:

If you are already registered for Online Services, you can start the claim process online.

If you have any problems using Online Services, call the Online Services Support Hotline on 13 2307.

Learn more about how to claim for Parental Leave Pay.

You can call 13 6150 for assistance in completing your online claim form or to request a hard copy form. Alternatively, you can visit the Family Assistance Office located in Medicare offices and Centrelink Customer Service Centres.

What if my circumstances change?

If your circumstances or your caring plans change before your Paid Parental Leave period starts, you should use the Paid Parental Leave Comparison Estimator to make sure that you are still better off receiving Parental Leave Pay rather than Baby Bonus.

From the time you become the primary carer of your child until the end of your Paid Parental Leave period, you will need to let the Family Assistance Office know if any of the following occur:

You can use Online Services to let us know if your circumstance change.

Can I change my claim to Baby Bonus?

You can change your claim to Baby Bonus if Parental Leave Pay is no longer the right choice for you. You can do this up until the start date of your Paid Parental Leave period, but you cannot change to Baby Bonus once your Paid Parental Leave period starts.

Receiving Parental Leave Pay and other family assistance

Can I receive Family Tax Benefit Part A as well as Parental Leave Pay?

If you are eligible, you can receive Family Tax Benefit Part A during your Paid Parental Leave period.

Can I receive Family Tax Benefit Part B as well as Parental Leave Pay?

You and/or your partner cannot receive Family Tax Benefit Part B during your Paid Parental Leave period. Family Tax Benefit Part B may be paid after the end of your Paid Parental Leave period, if you are eligible.

Will Parental Leave Pay count as income for family assistance payments?

Parental Leave Pay will count as income for Family Tax Benefit and other family assistance payments, but not for income support payments. You should include any Parental Leave Pay you expect to receive in your adjusted taxable income estimate for Family Tax Benefit purposes.

What if my partner or I get an income support payment such as a Disability Support Pension, will Parental Leave Pay affect our entitlement?

Parental Leave Pay will not count as income for Disability Support Pension or other income support payments, such as the Parenting Payment (partnered and single), Newstart Allowance and Veterans' Affairs income support payments.

Your existing employer funded entitlements

Organising leave with your employer

It is important to organise your leave from work. You should try to do this at least 10 weeks before you intend to take leave from work.

If you have worked for 12 months or more for the same employer you are entitled to up to 12 months unpaid parental leave under the National Employment Standards. You can also request an additional 12 months unpaid leave on top of this.

For more information on your workplace entitlements, visit the Fair Work Ombudsman website or call 13 1394.

Does the Paid Parental Leave scheme give me an entitlement to leave?

The Paid Parental Leave scheme provides you with Parental Leave Pay but does not give you an entitlement to leave.

If eligible, you will receive up to 18 weeks of Parental Leave Pay at the rate of the National Minimum Wage. This will complement your existing entitlements to leave, such as unpaid parental leave under the National Employment Standards in the Fair Work Act 2009. For more information about your workplace entitlements and obligations visit the Fair Work Ombudsman website or call 13 1394.

What if I decide to resign?

If you decide to resign before or during your Paid Parental Leave period you can still be eligible for Parental Leave Pay. You will need to notify the Family Assistance Office of your decision to resign if you are receiving Parental Leave Pay from your employer. The Family Assistance Office will then provide your Parental Leave Pay directly to you.

What if I want to return to work?

If you decide to return to work or your circumstances change before the end of your Paid Parental Leave period, notify the Family Assistance Office on 13 6150.

If you decide to return to work early, the unused part of your Parental Leave Pay may be transferred to your partner (or the child’s other legal parent or their partner) if they meet the eligibility criteria and claim your unused Parental Leave Pay.

About your employer providing Parental Leave Pay

Is my employer required to provide Parental Leave Pay?

Your Parental Leave Pay will be provided to you by your employer, in your usual pay cycle, if you:

If you do not meet this criteria your employer is not required to provide your Parental Leave Pay. However they can still choose to provide it to you, if you both agree for this to happen. Before you lodge your claim your employer will need to register for Centrelink Business Online Services and then opt in to provide Parental Leave Pay.

If your Parental Leave Pay is not provided by your employer it will be provided by the Family Assistance Office.

What payment notification will I receive from my employer?

Your employer must give you written notification each time you receive Parental Leave Pay. Your employer may use your usual pay slip to notify you of the payment. They may also use other written types of notification, including electronic formats such as email or online payslips.

Your employer must give you written notification of your Parental Leave Pay within one working day of the payment being made.

Will I receive superannuation payments from my employer while receiving Parental Leave Pay?

Employers are not required to make superannuation contributions in respect of Parental Leave Pay, but they can do so if they wish.

How can I resolve a dispute with my employer about my Parental Leave Pay?

If your employer has accepted their role in the Paid Parental Leave scheme and are not meeting their responsibilities, you should talk to your employer to try and resolve issues in the first instance.

If you have a dispute with your employer about your Parental Leave Pay, the Family Assistance Office may be able to help resolve the matter. If the Family Assistance Office cannot resolve the matter and if your employer is not meeting their obligations under the scheme, the matter will be referred to the Fair Work Ombudsman for investigation.

What if my employer already provides a paid maternity or parental leave scheme?

The Australian Government’s Paid Parental Leave scheme is a new entitlement for working parents. This means that if you are eligible you will be able to receive Parental Leave Pay regardless of whether your employer already offers paid parental or maternity leave arrangements.

You can take Parental Leave Pay before, after or at the same time as any paid or unpaid maternity or parental leave or other employer provided leave entitlements (such as annual leave or long service leave).

If your employer currently provides an employer funded scheme such as paid maternity or parental leave through an industrial agreement, they cannot withdraw the entitlement for the life of that agreement.

What happens if my employer ceases to trade or sells the business while paying Parental Leave Pay to me?

If your employer ceases to trade, sells the business, declares bankruptcy, transfers ownership or merges with another business, your employer will need to notify us in advance so alternative arrangements can be made for Parental Leave Pay to be provided to you.

What if I am self-employed and receiving Parental Leave Pay?

You will be able to keep an eye on your business without being regarded as having returned to work. You will be able to oversee the business' operations, and perform the occasional administrative task. Types of activities that may be considered as overseeing or performing an occasional administrative task may include:

If you perform your usual work duties during your Paid Parental Leave period you will be regarded as having returned to work and will no longer be entitled to Parental Leave Pay—even if you perform at reduced hours or work levels.

If you decide to return to work or your circumstances change before the end of your 18 week Paid Parental Leave period, you will need to notify the Family Assistance Office. The unused part of your Parental Leave Pay may be transferred to your partner if they meet the eligibility criteria and claim your unused Parental Leave Pay.

If you are self-employed, your Parental Leave Pay will be provided by the Family Assistance Office in fortnightly instalments.

Parental Leave Pay to your employee, more information is available about your role as an employer in the Employer Toolkit.

If I work for multiple employers, will the Family Assistance Office pay me my Parental Leave Pay?

For children born or adopted from 1 July 2011, employers will generally provide Parental Leave Pay to their eligible long-term employees who have been with their business for 12 months or more and are receiving more than eight weeks Parental Leave Pay.

If you have multiple employers that you have worked with 12 months or more, you may choose which employer will provide your Parental Leave Pay to you.

If you have multiple employers and you have not been with any of them for 12 months or more, the Family Assistance Office will provide your Parental Leave Pay.

Why doesn't the Family Assistance Office always provide Parental Leave Pay?

In addition to assisting working parents, the Paid Parental Leave scheme is designed help employers retain valuable and skilled staff, and to increase workforce participation.

Having employers provide government funded Parental Leave Pay to eligible long-term employees will encourage employees to remain connected with the business while they are on leave. Employers are likely to retain skilled and valuable staff if they provide their employees with Parental Leave Pay.

Employers are able to receive these benefits without having to fund Parental Leave Pay themselves.

Overpayments of Parental Leave Pay

How can an overpayment of Parental Leave Pay occur?

You may receive an overpayment of Parental Leave Pay because your circumstances have changed. This may happen, for example, if you are no longer entitled to receive Parental Leave Pay because you have returned to work part way through your Paid Parental Leave period and the Family Assistance Office have not been notified.

If you change your circumstances, this may affect your eligibility for Parental Leave Pay. You must advise the Family Assistance Office as soon as possible.

What if I receive an overpayment of Parental Leave Pay?

When the Family Assistance Office becomes aware that an overpayment has occurred, you will be sent an Account Payable notice advising you of the amount of the overpayment. You will need to repay the overpaid amount using the repayment options included in the notice. You may wish to contact the Family Assistance Office to discuss repayment options or your review and appeal rights.

How much will I need to repay?

If you receive an overpayment, you will have to repay the gross amount of Parental Leave Pay to the Family Assistance Office. This includes the net amount of Parental Leave Pay you received from your employer and the PAYG withholdings paid by your employer to the Australian Taxation Office in respect of your Parental Leave Pay.

For more information on how to recover overpaid PAYG, speak to your employer or visit the Australian Taxation Office (ATO) website.

How can I get a refund of the PAYG withholding amount?

If the overpayment is discovered in the same financial year in which it occurred

If you received the overpayment of Parental Leave Pay from the Family Assistance Office, they can recover the PAYG withholding amount from the Australian Taxation Office and reduce your gross debt by this amount.

If you received the overpayment of Parental Leave Pay from your employer, the Family Assistance Office will recover the gross amount of the overpayment from you. This includes the PAYG withholding amount. If either you or your employer becomes aware of the overpayment or if you request a refund of the PAYG withholding amount within the same financial year in which the overpayment occurred, your employer is required to refund thePAYG withholding amount to you under the Taxation Administration Act 1953.

If the overpayment is discovered after the end of the financial year in which it occurred

You will need to recover the PAYG withholding amount from the Australian Taxation Office, regardless of whether you received the overpayment from the Family Assistance Office or your employer.

If your income assessment for the financial year which the overpayment occurred has not been completed, you can receive an offset of the overpaid PAYG withholding amount in the calculation of your tax return.

If the Australian Taxation Office has completed your income assessment for the previous financial year, you should apply in writing to the ATO for an amended income assessment. You should provide the ATO with a copy of the Account Payable notice you received from Family Assistance Office.

If the overpayment spans two financial years

The two processes described above will apply to the portion of the debt that occurred in each financial year.

These arrangements for the recovery of PAYG withholding amounts are the same as those that apply to overpaid salary or wages.

For more information about recovering overpaid PAYG withholding amounts, speak to your employer or visit the ATO website.

Does my payment summary need to be amended?

If you received the overpayment from the Family Assistance Office, they will issue an amended payment summary to you.

If you received the overpayment through your employer and your employer has not issued you with a payment summary for the financial year in which the overpayment occurred, your employer is required to adjust their payroll record so that the overpaid amount is not reported as income on your payment summary.

If your employer has issued you with a payment summary for the financial year in which the overpayment occurred, your employer is required, within 28 days of becoming aware of the overpayment, to give you:

The letter should contain:

If your employer is unable to give you either of the above documents within 28 days of becoming aware of the overpayment, your employer must contact Centrelink to advise that they are unable to do either of these things. Centrelink will then provide you with the information you will need to recover the overpaid PAYG from the ATO.

These arrangements for the amendment of payment summaries are similar to those that apply to overpaid salary or wages.

More information?

To find out more about the Paid Parental Leave scheme:

If you have questions relating to your workplace entitlements and obligations visit the Fair Work Ombudsman website or call 13 1394.

If you have questions relating to overpaid PAYG amounts, visit the ATO website.

Where do I go for more information if I am an employer?

If you are an employer and would like to know more about the Paid Parental Leave scheme, view the Paid Parental Leave scheme for employers section of the Centrelink website.

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