What benefits are you entitled to when on maternity leave?

We work with a lot of professional families who are in the process of growing their family. Having children can be a very exciting time in your life but can also be very costly. The sooner you start preparing for the cost of maternity leave, the easier it is going to be.

In this article, I’ll outline some of the support you may be entitled to during this period.

Employee entitlements

Depending on where you work, you may be entitled to maternity leave pay from your employer. Whether you are entitled depends on your conditions of employment so your first stop may be your payroll or HR department to understand your entitlements.

At the very least, provided you meet the conditions of having worked for your employer for 12 months or more, you should be entitled to at least 12 months of unpaid parental leave. Check out the Fairwork website at www.fairwork.gov.au for more information.

Paid Parental Leave

In addition to the benefits from your employer, you may also be entitled to Parental Leave Pay from the Australian Government.

To qualify, you must:

• Be the primary carer of a newborn or newly adopted child
• Have individually earned less than $150,000 in the last financial year
• Not be working during your paid parental leave period (except for allowable reasons)
• Have met the work test (this is complex but indicates you must have worked for at least 10 of the previous 13 months for around 1 day a week)
• Have registered (or applied to register) your child’s birth with your state birth registry.

Parental Leave Pay is $150.78 per day before tax (as at the time of writing this article on 17 June 2021). This means the maximum you will receive is about $13,570.20.

Bear in mind that if you earn $100k a year, you would earn $34,615 in this same period so be prepared this may be a big drop in income and save for it.

How long can I receive Paid Parental Leave?

Paid Parental Leave is paid over 2 distinct periods:

The first 12 weeks- This must be used in one continuous period within 12 months of the birth or adoption of a child.

The remaining 30 business days- These can be taken more flexibly as agreed with your employer but must be taken within 24 months of the birth or adoption of a child.

How do I receive Paid Parental Leave?

In most cases if you’ve worked for your employer for at least 1 year, they will pay your paid parental leave to you with your wages. They will withhold the appropriate tax as they usually do and do things such as deduct child support etc.

What about my partner?

Your partner may be entitled to what is referred to as “Dad and Partner Pay”. To qualify, they must have earned less than $150,000 in the previous financial year and not be working during the period.

Dad and Partner Pay can be paid for up to 2 weeks and is $753.90 per week before tax (the same rate as Paid Parental Leave).

Your employer may also have benefits associated so make sure you check it out.

Get saving now!

Maternity leave can be a stressful time before you even start worrying about the cost of a baby. So make sure you start saving now so you have a nice buffer before you start having kids.

Don’t forget, that even when you do return to work, you will have the added cost of day-care to deal with.

As always if you have any questions, please reach out.

This post is from our resident Financial Planner Ben Brett, check out his details in the About Us section.

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