What you need to know about Maternity Leave benefits
Many of our clients are either planning for maternity leave, halfway through or coming out the other end. We’ve seen our fair share of maternity leave in all its shapes and sizes and unfortunately it’s probably more complex than it needs to be.
Today I wanted to go over the basics of maternity leave as of now (2022), but most importantly what you are actually entitled to. There are differences between the Employer benefits and Government benefits, so we will go through both.
Different employers have different benefits, some mandatory and some optional.
Mandatory Employer benefits:
It is a requirement that employers allow staff to take 12 months of unpaid maternity leave, with the option of an extra 12 months with 4 weeks’ notice at the end of this period.
The important point to note is that this is unpaid. Your job however should be retained for you, or a job of similar duties, status and pay.
In order to be entitled to this, you need to be working or your employer for at least 12 months prior to your maternity leave.
Optional Employer Benefits:
Some companies (usually the bigger ones) have additional benefits included as part of your employee benefits. This can include the following:
- Paid maternity leave at your full rate, with varying lengths of time
- Additional unpaid maternity leave
- Flexible working options upon returning to work
- Flexibility around using annual leave, sick leave and long service leave in conjunction with your maternity leave
- Additional super payments whilst on maternity leave
None of these are required by law, so we always encourage you to review your staff benefits and policies to understand what is available to you with your specific employer. Often there are caveats with how long you have been working there in order to access any additional payments, so it’s important to do your research.
The benefits offered by the government are typically on top of any benefits you receive from your employer. The main benefits that may apply are:
- Paid Parental Leave
- Dad and Partner Pay
- Newborn upfront payment and newborn supplement
Paid parental leave: This is a payment from the government for up to 18 weeks paid leave. This is at minimum wage, which is currently $812.45 per week, but it is taxable. Be prepared to either have tax taken out, or potentially owe tax at the end of the year.
The above payment isn’t guaranteed however, you need to meet the following criteria:
- In the financial year prior to your maternity leave, you need to earn under $156,647 (FY21/22 figures). This isn’t based on the family income, just the parent taking the maternity leave.
- You need to have been working in the year leading up to your maternity leave, at least 10 of the previous 13 months. If you haven’t been working, you may not qualify.
Dad and Partner pay: This is up to 2 weeks paid, from the government at the same pay rate as the paid parental leave payment. This means your partner can take 2 weeks off within the 50 weeks after the birth of your child. If you are the birth mother, you can’t also get this payment on top of the paid parental leave.
Again, you’ll need to meet the following criteria:
- You need to meet the same income test as above too. This means the partner can not earn more than $156,647 in the 21/22 financial year.
- Again, the same work requirement exists – i.e. that the partner has been working 10 of the last 13 months.
Newborn upfront payment and newborn supplement: This is a lump sum payment and an increase to your family tax benefit Part A payment. If you are going to qualify for Paid parental leave above, then you don’t need to worry about this.
The newborn lump sum is a one time payment of $595 per child and is not taxable.
The newborn supplement is an ongoing payment for up to 13 week. The amount you actually get is dependant on how many children you have and your family income, but the absolute maximum you will receive over the whole period is $1,785.42 (up to $137.34 per week) and it’s not taxable. This often applies if you are non-working or have lower income.
As you can see, the Paid parental leave scheme is significantly more beneficial and tends to be relevant to most of our clients.
How do you apply?
It’s best to put in your application with Centrelink before the birth just to make your life easier. If you don’t, you must put the application in within 1 year of birth or adoption. You can do this by linking your MyGov account to Centrelink.
You will need to provide the birth certificate once born to confirm before the payment will start.
Additionally, it’s worth discussing with your employer so that they can be prepared and can potentially facilitate any of the payments for you.
There is a lot going on in the lead up to a baby’s arrival, so being prepared is your best advantage with this administrative side and then you can focus your attention on what’s important. If you are expecting or adopting, get started on your applications as soon as you can, so that you know what you will be getting and that the payments actually start as soon as you need them.