Payments and Subsidies for parents to be.

One of the most joyous times in life is when you find out a baby is on the way. It’s hard not to get caught up on the rush of expecting your new family member and forget to find out what help is out there from the government in the way of subsidies and parental payments that you may be entitled to. Here we will go through what financial assistance you may be eligible for after birth. Please note, payments and eligibility may change as children get older.

1. The Newborn payment and supplement

The Newborn payment and supplement is provided to those not eligible for Parental Leave Pay. To get this payment you must be eligible for Family Tax Benefit Part A.

The Newborn upfront payment is a lump sum of $570 per child and is not taxable. The Newborn Supplement is an ongoing payment for up to 13 weeks and is not taxable. The amount received for the supplement will depend on how many children you already have and your family’s income. For your first child you may receive a maximum of $1709.89 over the 13 weeks with and subsequent child being a maximum of $570.57.

2. Parental Leave Pay

This payment is provided to the primary carer of a newborn and can be claimed for up to 18 weeks while you care for your new child.
To get this you must:

• Have individually earned less than $150,000 in the last financial year

• Not be working during your Paid Parental Leave period except for certain reasons

• Have met the work test in the 13 months before the child’s birth or entry into care – ie. Worked 10 of the 13 months before the birth or adoption and for a minimum of 330 hours in that 10-month period.

The payment of $150.78 per day before tax can be paid directly to you or your employer can pay it to you. The start date depends on when you claim but must not be before your child’s date of birth or adoption.

3. Dad and Partner Pay

To be eligible for this payment of up to 2 weeks while you care for your new child you must:

• Care for a newborn or newly adopted child

• Have individually earned less than $150,000 in the last financial year

• Not be working or taking paid leave during your Dad and Partner Pay period

• Have met the work test in the 13 months before the period starts

The current rate of pay is $753.90 per week before tax and is based on the national minimum wage. You will receive one instalment and it will be taxed at a marginal rate of 15% unless otherwise requested.

4. Parenting Payment

The Parenting Payment is a taxable pension paid to low income families and single parents. The primary income earner can earn up to $1,156 per fortnight and the secondary earner can earn up to $106 per fortnight before your payment is impacted. The cut off thresholds are $2,029.50 per fortnight for the primary earner and $995.50 per fortnight for the secondary earner with a combined threshold of $2,160.50, complicated we know!

As this is a pension, an asset test also applies with the thresholds for a couple being $401,500 for homeowners and $616,000 for non-homeowners
The maximum payment rate for a couple is $510.80 per fortnight, excluding the Coronavirus Supplement.

5. Family tax benefit Part A

The Family Tax Benefit Part A and B is calculated based on your income estimate for the year, your income estimate includes any Parenting Payment eligibility.

Part A is assessed on your combined income for the year. The income threshold for a full payment is $55,626 and cuts out at $98,988. For children under 12 you can receive $189.56 per fortnight which is reduced by $0.20 for every $1 earnt over the lower threshold.

To be eligible for Part B the primary earner must earn under $100,000. If eligible, your actual amount paid is based on the secondary earners income. The full payment is $161.14 per fortnight reduced by $0.20 per $1 earnt over $5,767, until completing cutting out by $28,671 for children under 5.

As you can see there are many different types of payments and subsidies that you may be eligible for. This article focuses on couples with a newborn baby or young child. If you’d like to know more about how these payments can be applied in your individual circumstances we encourage you to get in touch for your free initial complimentary consultation - 0423 313 486 or kate@solacewealth.com

Kate Trost

Senior Financial Adviser and Director of Solace Wealth Management (AR numbers 465078/1262350)

Authorised Representative of Avana Financial Solutions (AFSL 516325).