Prime Time Financial Counsellors Pty Ltd: Paid Parental Leave

Paid Parental Leave

Reproduced from Centrelink's "A Guide to Australian Government Payments 1 January - 19 March 2012"

Basic Conditions of Eligibility

Paid Parental Leave is a new entitlement for working parents of children born or adopted on or after 1 January 2011.
A person may be eligible for a maximum period of 18 weeks of Parental Leave Pay if they:
- are the primary carer of a newborn or recently adopted child
- are an Australian resident
- have met the Paid Parental Leave work test and income test before the birth or adoption occurs, and
- are on leave or not working from the time they become the child's primary carer until the end of their Paid Parental Leave period.
The birth mother or the initial primary carer of an adopted child must usually apply for Paid Parental Leave, unless there are exceptional circumstances.
Parental Leave Pay and the Baby Bonaus cannot be paid for the same child. Parents who meet the eligibility requirements for both payments can choose which payment is the best financially for their family.
A person and/or their partner will not be eligible for the Family Tax Benefit Part B or the dependant spouse, child housekeeper and housekeeper tax offsets during their Paid Parental Leave period.
Claims for the scheme can be lodged up to three months prior to the child's expected date of birth or adoption.
A person may still be eligible for the scheme in the event of a stillbirth or infant death.

Paid Parental Leave Work Test

Full-time, part-time, casual, seasonal, contract and self-employed workers can be eligible for the scheme.
To meet the Paid Parental Leave work test, a person must have:
- worked at least 10 of the 13 months prior to the birth or adoption of their child; and
- worked for at least 330 hous in that 10 month period (just over one day a week), with no more than an eight week gap between two consecutive working days.
Note: A working day is a day on which a person has worked for at least one hour.
Note: There are some exceptions to the work test due to pregnancy complications and/or premature birth.

Residence Requirements

Claimant must be living in Australia and be:
- an Australian citizen, or
- the holder of a permanent visa, or
- a New Zealand citizen who arrived on a New Zealand passport, or
- holder of a temporary visa, subclass 070, 309, 310, 447, 451, 695, 785, 786, 787, 820 or 826 or a holder of a Criminal Justice Stay Visa issued specifically for the purpose of assisting in the administration of criminal justice in relation to the offence of people trafficking, sexual servitude or deceptive recruiting.

Basic Rates and Method of Payment

The current rate is $589.40 a week before tax.
Parental Leave Pay is assessible for income tax.
Parental Leave Pay is payable for a maximum period of 18 weeks.
Parental leave Pay can start from the date of birth or adoption, or a later date, and must be fully paid within 52 weeks of the child's birth or adoption.
Parental Leave Pay can be provided by an employer in the person's usual pay cycle or by the Family Assistance Office in fortnightly instalments.
Employers must provide Parental Leave Pay to eligible employees who:
- have a child born or adopted on or after 1 July 2011,
- have worked with the employer for a period of at least 12 months prior to the expected date of birth or adoption, and
- will be receiving at least eight weeks of Parental Leave Pay.
If an employer is not required to provide Parental Leave Pay, they can still choose to provide it. The employer and the employee must agree for this to happen. this applies both before and after 1 July 2011.

Income Test

A person must have an individual adjusted taxable income of $150,000 or less in the financial year prior to date of claim or the date of birth or adoption, whichever is earlier.

Assets Test