Paid and unpaid parental leave – things to consider

When you have a baby or adopt a child under 16 years of age in Australia, you may be entitled to paid and unpaid parental leave options, including Parental Leave Pay from the Australian Government, parental leave from your employer and/or unpaid leave from your employer. You will still be likely to earn less than when you were in paid employment.

Read more here about what to consider before you apply.

Plan your leave

Follow this checklist 3 months before your baby’s due date, or as soon as possible if you are adopting a child:

• Check how much leave you are entitled to (visit the Fair Work Ombudsman website)
• Check if you are eligible for any Australian Government payments
• Discuss your preferences with your partner
• Talk to your employer. You must give your employer at least 10 weeks’ written notice before starting your unpaid parental leave. You must also confirm the dates of your leave 4 weeks before the leave starts

What is Parental Leave Pay?

Parental Leave Pay is an Australian government payment for up to 18 weeks so you can look after your new child. It is paid at the national minimum wage (currently $772.60 per week before tax).

You are entitled to Parental Leave Pay from the Australian Government if you are:

• the birth mother of a newborn child
• the adoptive parent of a child
• another person caring for a child under exceptional circumstances

You will also need to meet some other conditions:

• you must be the primary carer of the child
• you earn under a certain limit (an adjusted taxable income of $151,350 or less)
• you are on leave or not working while you receive the payment
• you have worked both 10 of the 13 months before the birth or adoption of your child and you have worked for a minimum number of hours per week — this is determined using a work test
• you meet Australian residency requirements

The Government usually makes the payments to the employer first, who then pays the employee. However, you can elect to receive the payment directly from the Government. You can get the payments either before, after or at the same time as other leave entitlements, for example, annual leave and long service leave.

You are also entitled to Parental Leave Pay if you are self-employed, as long as you meet the work test.

Visit the Services Australia website to see more about eligibility requirements for Parental Leave Pay.

Unpaid leave

Unpaid parental leave applies to employees who have, or will have, responsibility for the care of a child.

By law, you are entitled to up to 12 months of unpaid parental leave. You can also request an additional 12 months of leave.

You can take unpaid parental leave if you:

• are an employee who gives birth
• are an employee whose spouse or de facto gives birth
• are an employee who adopts a child under 16 years of age

You are eligible for unpaid parental leave if you have worked for your employer for at least 12 months before the baby is born (or before the date of the adoption) and are responsible for the care of the child.

Casual employees are also entitled to unpaid parental leave, as long as they have been working for the employer on a regular basis for at least 12 months and have a reasonable expectation of this regular work continuing.

If you are taking unpaid parental leave to care for an adopted child, you may also be entitled to an additional 2 days of unpaid leave to attend interviews. This is called pre-adoption leave. You cannot take this leave if your employer tells you to take a different type of leave instead, such as annual leave.

If you are having another child, you don’t have to work for another 12 months before you can take unpaid parental leave with the same employer. You will have to work for 12 months if you start work with a new employer.

Parents who experience a stillbirth or the death of an infant during the first 24 months of life can also take unpaid parental leave.

Dad and Partner Pay

Working fathers and partners (including same-sex partners) may be eligible for 2 weeks of leave paid at the minimum wage. This leave is paid by the Australian Government directly to the employee. It is paid in one block. Some employers top up Dad and Partner Pay so it is equivalent to your normal wage.

You are eligible for Dad and Partner Pay if you are:

• the biological father of the child
• the partner of the birth mother
• an adoptive parent
• the partner of an adoptive parent
• the person caring for a child born of a surrogacy arrangement

You must also:

• be caring for the child every day during the time you get Dad and Partner Pay
• have worked a certain number of hours in the past 13 months
• meet residency requirements
• be on leave or not working while you receive the payment
• have received an adjusted taxable income of $150,000 or less in the financial year either before the date of your claim or the date your Dad and Partner Pay period starts, whichever is earlier

Employer-funded paid parental leave

Depending on your award, agreement, contract or workplace policy, you may also be entitled to paid parental leave from your employer. You can receive both Parental Leave Pay from the Government and paid parental leave from your employer.

The amount paid by your employer will depend on your arrangements with them.

Visit the Services Australia website to see more about eligibility requirements for Dad and Partner Pay.

Am I eligible for any other Australian government payments?

Check if you are eligible for other payments:

• Family Tax Benefit
• Parenting Payment
• Newborn Upfront Payment and Newborn Supplement

Start the claim process from 3 months before your baby is born or adopted, by logging on to your Centrelink account through the MyGov website.

How much leave should I take?

When deciding how much time to take off when having a baby, consider how you will manage any debts or other financial commitments.

Work with your partner to plan a budget that will help you transition financially after your baby is born. Having a detailed budget can help you work out where to cut back if necessary. You could practise living on one income for a while so you can see how you will manage after the baby is born.

ASIC’s Moneysmart Budget Planner can help you calculate how to budget your income when you are planning your parental leave.

Paid Parental Leave is designed to ease the financial stress for parents who stay home with their baby.

How long you decide to stay at home depends on your situation. In Australia, more females are spending longer at home with their newborn. About 2 in 5 females go back to work when the baby is 7 months or older.

If you decide to go back to work, one option is for your partner to take leave and stay at home with the baby. Each parent can take up to 12 months’ unpaid leave. Parents must take this leave in a single continuous period. One parent’s leave starts the next working day after the first parent returns to work. The combined leave cannot be for more than 24 months.

Before planning your leave, it is a good idea to check childcare options in your area. You can do this at StartingBlocks.gov.au and use their Find Child Care tool.

Being on leave

Staying at home with a baby can mean a big adjustment. It is important to do things for yourself, have some adult company and nurture your relationships. Read more about being a new parent.

You are not eligible to receive Parental Leave Pay if you return to work before the end of the leave period. However, you may keep in touch with your employer so it is easier for you to transition back to work. You can do a paid work activity for a total of 10 days while you are receiving the payment.If you run your own business, you cannot work while you are receiving the payment. You can perform basic tasks to keep the business operational, such as paying bills, organising repairs, and maintaining basic contact with clients. For more information on activities that do not count as work, please visit the Services Australia website.

Going back to work

Many parents return to work before the end of the 12-month period, but work fewer hours than they did before. This means they can earn money but still spend time with their baby.

Discuss with your partner and your employer how you can balance your caring responsibilities with work.

There is no right time to return to work. It’s your decision and can depend on many factors, including they type of work you do, your family arrangements and your child’s needs.

For more information

• Fair Work Ombudsman
• Services Australia