Dealing with social security

The Baby Bonus has been replaced with the Newborn Supplement and Newborn Upfront Payment.

The Newborn Supplement (NBS) is paid as a temporary increase to FTB(A) for up to 13 weeks to help with the costs of:

• a newborn child; or
• a child under the age of one who becomes entrusted to the care of a non-parent carer; or
• a child of any age who becomes entrusted to an individual’s care through the process of adoption (sch 1 s 35A Family Assistance Act). Applicants must be eligible for FTB(A). Entitlement to the NBS is assessed as part of a claim for FTB(A). Families receiving FTB(A) are automatically assessed for eligibility for the NBS. The NBS is not payable to people who access Parental Leave Pay for the same child, except in cases of multiple births (e.g. twins or triplets). An additional payment of a Newborn Upfront Payment (NBU) of $641 per child may also be payable. There are two rates of payment for NBS: a higher and lower rate. This is determined by:
• who the claimant is (birth mother, adoptive par- ent, non-parent carer, other); and
• the type of birth (live or stillborn); and
• whether there are multiple children (multiple births, multiple children aged under one year entrusted to care, multiple children adopted; and
• the family’s income. As at 1 July 2023, the higher NBS rate is $1924.65 and the lower NBS rate is $642.46. For example, for a first child eligible for the NBS, the payment would be $1924.65. For a subsequent child of the same birth mother, the NBS payment would be $642.46. A Stillborn Baby Payment is also payable for families that experience the loss of their baby as a result of stillbirth. This payment is for families that do not meet the Parental Leave Pay criteria but earn under the income threshold or are eligible for FTB(A). (See also A Guide to Australian Government Payments for more information about the Newborn Supplement and Upfront Payment.)

The Paid Parental Leave scheme has been amended and entitlements will depend on the date the child was born or adopted. Children born or adopted before 1 July 2023 For children born or adopted before 1 July 2023, the scheme provides two government-funded payments to enable parents to take time off work to care for their children during the first months after birth or adoption. These payments are Parental Leave Pay, and Dad and Partner Pay.

Parental Leave Pay is payable to eligible parents/carers who have a child or adopt a child after 1 January 2011 (and before 1 July 2023). It is paid for a maximum of 18 weeks (during 12 continuous weeks of parental leave and 30 days during the flexible paid parental leave period which can be added to the 12-week block or used flexibly). It is a taxable payment. Usually, the birth mother or primary carer of an adopted child should apply for this payment. Applicants must meet work, income and residency tests, and not be working.

The work test requires the applicant to have undertaken qualifying work (at least one hour per day) for at least 10 of the 13 months before their child’s birth or adoption, and for at least 330 hours in that 10-month period with no more than a 12-week gap between two working days. Exceptions to the work test may apply for pregnancy-related illnesses or complications, premature births, dangerous jobs, severe medical conditions, natural disasters, and family and domestic violence affecting the claimant’s ability to work. Periods of Parental Leave Pay, and Dad and Partner Pay for a previous child may be able to count as work for the purposes of a new claim.

Generally, a newly-arrived residents’ waiting period of 104 weeks must be served before an applicant can receive paid parental leave unless an exemption applies. Certain category visa holders may be exempt, including SCV holders and applicants who were receiving a social security pension or allowance, a farm household allowance or Dad and Partner Pay on the day of the child’s birth (for primary applicants) and the day before the paid parental leave would start (for primary and secondary applicants).

Parental Leave Pay, the Newborn Supplement, and the Newborn Upfront Payment cannot be paid for the same child.

A person must have an individual adjusted taxable income of a specified amount or less in the financial year prior to the date of the claim, birth or adoption (whichever is earlier) to be eligible. The specified amount for the 2020–2021 financial year is $151 350; the specified amount for the 2021–2022 financial year is $156 647. There is no assets test.

Employers must provide Paid Parental Leave to eligible employees. If an employer is not required to provide Paid Parental Leave, they can still choose to provide it in agreement with the employee. Eligible parents who do not receive Parental Leave Pay from their employer will receive it from Centrelink.

Dad and Partner Pay is payable to eligible parents/ carers for children born or adopted from 1 January 2013 (and before 1 July 2023). Dad and Partner Pay will not be available for children born or adopted after 1 July 2023. It is paid for a maximum period of two weeks. To receive the Dad and Partner Pay, a person must meet the eligibility, work, income and residency tests, and be on unpaid leave or not working during the pay period. They must care for the child on each day of the pay period. However, the percentage of care they must undertake is not specified, nor is there a requirement that they be legally responsible for the child. It is a taxable payment.

(See also A Guide to Australian Government Payments for more information about Parental Leave Pay and Dad and Partner Pay.) Children born or adopted after 1 July 2023 For children born or adopted after 1 July 2023, the paid parental leave scheme allows parents and carers to share a maximum of 100 days of paid parental leave. Single parents are entitled to 100 days. For couples, 90 days will be available to the primary claimant (PPL claimant) and 10 days reserved for the other parent or carer (special PPL claimant). In exceptional circumstances, the PPL claimant may be permitted to use 100 days even if partnered and a special PPL claimant may be permitted to use more than the 10 reserved days with permission from the PPL claimant.

A PPL claimant will be eligible if they are caring for the child and satisfy the work test which requires that in the 13 weeks prior to the expected birth or adoption, they engaged in qualifying work for 10 months and for at least one day per week (330 hours) with no more than a 12-month gap between two working days. A claimant may be exempt from the work test if there are pregnancy complications, the child’s birth was premature, their job is dangerous or hazardous, they are victims of family violence, affected by serious illness or by a natural disaster. The claimant’s individual adjusted taxable income must be below $168 865 for the 2022-23 financial year. If partnered, the family’s income must be below $350,000.

The PPL claimant must also satisfy the Australian Residency test and have served the newly arrived residents’ waiting period of 104 weeks prior to the birth or adoption unless exempt. Certain visa holders, refugees or family members of refugees and holders of special category visas are exempt from the waiting period.

A special PPL claimant seeking a flexible PPL day must satisfy the work and income tests, as well as the Australian Residency Test on the date of the birth of the child and on the flexible PPL day. Claimants serving a newly arrived residents waiting period will not be eligible for PPL unless exempt from the waiting period because of the category of visa they hold, because they are a refugee or former refugee or the family member of a refugee, because they are a SCV holder, or because prior to the flexible PPL day they were receiving a social security pension or allowance or a farm household allowance. The special PPL claimant must be caring for the child on the flexible PPL day and not performing more than one hour of work on the day unless an exemption applies.

PPL is payable if the child was stillborn, care of the child was relinquished or lost without consent, the claimant has been compulsorily recalled to duty, the claimant is complying with a summons or other compulsory process, or the claimant is an essential worker responding to an emergency.

Claims for PPL should be made in the approved form, no earlier than 97 days (approximately three months) before the expected birth or placement of the adopted child and no later than the day before the child’s second birthday or anniversary of the adopted child’s placement.

PPL is taxable and paid in instalments by the employer or Services Australia. The current weekly rate before tax is $882.75 and the daily rate is $176.55.

A PPL claimant and an employer have the right to apply to the Administrative Appeals Tribunal for a first review and decisions must be provided within 14 days. PPL claimants have a right to a second review by the Tribunal.

(See also A Guide to Australian Government Payments and the Guide to Paid Parental Leave for more information about PPL)