Paid Parental Leave & Parental Tax Credits

In the 2014 budget the Government announced changes to the government funded paid parental leave (PPL) and parental tax credit entitlements (PTC).

In the 2014 budget the Government announced changes to the government funded paid parental leave (PPL) and parental tax credit entitlements (PTC).

The Parental Tax Credit is a payment for a newborn baby for the eight weeks following birth. Currently the maximum weekly PTC entitlement is $150 per week (but this depends on your joint family income, the number of children you have and their age).  You will be exempt from eligibility if you receive income from an income tested benefit, pension or student allowance and spend an extended period of time on accident compensation.

The Government has announced that the maximum PTC entitlement will increase to $220 per week from 1 April 2015 and the payment period will extend to 10 weeks.

Paid Parental Leave is a monetary entitlement for eligible working mothers. Either employees or self-employed can apply. Paid parental leave is for a period of 14 weeks and can be transferred to a spouse provided they meet the employment criteria as well.  Currently qualifying parents can receive a maximum weekly payment of $504 before tax. To meet the current criteria you need to have been employed by the same employer for an average of 10 hrs per week for the last 6 month.

From 1 April 2015 this entitlement will extend to 16 weeks and increase to 18 weeks from 1 April 2016.  From the 1 April 2016 the eligibility criteria will be widened to include certain guardianship arrangements and employee requirements will also be relaxed to allow entitlements to people changing jobs and more casual/seasonal workers.

It is only possible to be eligible for one of the entitlements and both have specific criteria. For most people PPL will be greater than the PTC but circumstances do vary and there are exceptions. Further information is available on the Inland Revenue Department website which includes entitlement calculation tools. If you need assistance with regard to which entitlement you are eligible for we are happy to discuss this with you.

Author: Jackie Baker