eligible for the low-income tax offset against unearned income, such as interest. The rebate can only be offset against excepted income.
5 PAYMENTS FOR NEW PARENTS
There are a few government payments available when becoming a mum or a dad.
Paid parental leave
Eligible working parents of children born or adopted may be entitled to the paid parental leave scheme to help them care for a new baby. The pay is for up to 18 weeks at the national minimum wage (currently $753.80 per week before tax) and is paid by either your employer or the government (where employers do not provide parental leave entitlements). You can claim for paid parental leave up to three months in advance.
To be eligible you must have worked at least 330 hours across 10 of the 13 months prior to the birth of your child, but your annual salary must also be less than $150 000. The work test has been extended so that mothers can count periods of paid parental leave they've taken for earlier births as ‘work’.
Paid parental leave is subject to income tax and may also affect other government benefits such as child support, health care cards and public housing. In contrast, the Newborn Upfront Payment and Supplement is not taxable and not considered income for family assistance or social security purposes. For more information on paid parental leave go to https://www.servicesaustralia.gov.au/individuals/services/centrelink/parental-leave-pay.
Parents are prevented from ‘double-dipping’ into parental leave, where they have simultaneous access to employer-funded benefits at the same level or more than the government scheme. If the employer-paid leave is less, then they will only receive the difference.
For children born after 1 March 2014, Family Tax Benefit Part A recipients may be entitled to a $570 Newborn Upfront Payment and up to $1709.89 for a Newborn Supplement (reduced to $1140.57 in total for subsequent children), payable via normal fortnightly payments over a three-month period. These payments are not taxable.
Dad and partner pay
To help partners bond with their new baby, eligible working partners of children born or adopted after 1 January 2013 may be entitled to a single ‘dad and partner pay’. It is a one-off payment of up to two weeks at the national minimum wage (currently $753.80 per week before tax).
To be eligible you must have worked at least 330 hours across 10 of the 13 months prior to the birth of your child, but your annual salary must also be less than $150 000. You can be eligible if you work full time, part time, casually, seasonally, on contract or in a family business. You cannot be working or receiving paid leave during the period of claiming the dad and partner pay.
In addition to dad and partner pay, families may be eligible for other family assistance such as paid parental leave and the Family Tax Benefit.
Claims must be lodged by the partner who is eligible to receive the payment. You can claim the dad and partner pay up to three months in advance or within a year following your child's birth or adoption. Employers are not required to pay this entitlement as it is solely administered and paid by Services Australia.
6 CHILD CARE
Ask the parents of any young child and they will tell you that their biggest expense is child care. If you have a child who is attending child care services approved by, or registered with, the government you may be eligible for the Child Care Subsidy (CCS). You can apply for the benefit at the Family Assistance Office. The amount you receive will depend on the type and amount of care that you use, your income, the reason you are using care and the number of children that you have in care.
If you have identified that you were eligible for the Child Care Subsidy in previous financial years, but have not received it, you can lodge a lump-sum claim with the Family Assistance Office. You must do this within two years of the end of the financial year for which you are claiming.
As can be seen in table 1.3, families with combined adjusted taxable incomes under $69 391 will receive a Child Care Subsidy rate of 85 per cent of the hourly cap depending on the type of child care you use (shown in table 1.4), reducing to 20 per cent for those families with incomes over $343 680 with no subsidy for family incomes over $353 680. An annual cap of $10 560 per child applies to families with incomes over $189 390.
TABLE 1.3: child care subsidy rates (2020–21)
Source: Services Australia https://www.servicesaustralia.gov.au/individuals/services/ centrelink/child-care-subsidy/how-much-you-can-get/your-income-can-affect-it
| Combined family income | Subsidy rate (up to hourly rate cap) |
|---|---|
| 0–$69 390 | 85% |
| $69 391–$174 389 | 50%–85% (reducing 1% every $3000) |
| $174 390–$253 679 | 50% |
| $253 680–$343 679 | 20%–50% (reducing 1% every $3000) |
| $343 680–$353 679 | 20% |
| $353 680 and over | 0% |
The 2021–22 federal budget announced that the maximum child care subsidy will increase to 95% for the second and subsequent children in child care from 1 July 2022 with no annual cap.
TABLE 1.4: child care hourly rate caps (2020–21)
Source: Services Australia https://www.servicesaustralia.gov.au/individuals/services/centrelink/child-care-subsidy/how-much-you-can-get/type-child-care-you-use-affects-it#hourlyrate
