Did you know - CareforKids.com.au®

Did you know…
Paid Parental Leave Scheme & Baby Bonus are mutually exclusive?

In January 2011, the Paid Parental Leave scheme was instigated to provide financial support to eligible working parents of children born or adopted from 1 January 2011. From January 2012 the Baby Bonus (*means tested) allowed parents of babies born or adopted from that date to claim $5437 to go towards that crucial first year, and is paid in 13 fortnightly installments.

However, what many families may not realise is that the Baby Bonus and the Paid Parental Scheme are mutually exclusive – you cannot claim both for the same child.

It's also worth noting that the rates are changing. For anyone claiming the Baby Bonus up until 31 August 2012, the current rate of $5,437 applies, but for anyone claiming from 1 September 2012, the rate drops to $5,000. So if you're eligible to claim, get in quick!

The Baby Bonus scheme has been designed to make sure that stay at home mums aren't penalized or worse off than working mums of the same family income levels, because they can't claim the paid parental leave (currently 18 weeks at National Minimum Wage and taxable), unless your employer has a better scheme in place.

Hence, even if you qualify for the Baby Bonus with the means test and other eligibility questions, and you also qualify for the paid parental leave scheme, you may not claim for both for the same baby. So which is better? In order to calculate whether it's more beneficial to you to claim the Baby Bonus or the Paid Parental Leave scheme, check out the department of Human Service's Comparison estimator here.

Baby Bonus Eligibility
You may be eligible for Baby Bonus if:

You are eligible for Family Tax Benefit (FTB) for the child (disregarding the FTB income test) within six months of the child's birth or after an adopted child enters your care before turning 16 years old; or
You are claiming for a child other than your own and you started caring for the child within six months of the child's birth and are likely to continue caring for the child for at least six months; and
You or your partner are the primary carer of the child; and
You meet the residency requirements for FTB within six months of the child's birth or entry into care; and
You meet the Baby Bonus income test; and
You have not received Parental Leave Pay for the child; and
You make your claim no later than one year after the birth of the child or after the adopted child enters your care.

Paid Parental Leave Eligibility
You may be eligible if you:

Are the primary carer of a newborn or recently adopted child from 1 January 2011 (A child's primary carer is the person who is most meeting the child's physical needs. This will usually be the birth mother of a newborn child or the initial primary carer of an adopted child. You are considered to be the primary carer of your child even if your child is in hospital); and
Are an Australian resident; and
Have met the Paid Parental Leave work test before the birth or adoption occurs; and
Have received an individual adjusted taxable income of $150 000 or less in the financial year before the date of birth or adoption or date of claim, whichever is earlier; and
Are on leave or not working, from when you become the child's primary carer until the end of your Paid Parental Leave period.
Full-time, part-time, casual, seasonal, contract, and self-employed workers may be eligible for the scheme.

For more information contact Human Services on www.humanservices.gov.au

*Baby Bonus is payable if your family's estimated combined adjusted taxable income is $75,000 or less in the six months after your child is born or enters your care.