Having children is tough – not just from a lack of sleep perspective – but also from a financial perspective. Luckily, on the finance side, the government helps eligible parents through the Parental Leave Pay.
In this article, we’re going to go through all the key bits of information regarding the Parental Leave Pay for children born or adopted after 1 July 2025, so you don’t have to spend hours scouring the Services Australia website.
Payment rate
The amount of income you get is equal to the minimum wage which, at the time of writing this (July 2025), is $948.10 per week. This amount gets updated annually, so check the Services Australia website for the latest figures.
In addition to this, superannuation contributions will be paid on top of your entitlement at the standard superannuation guarantee rate of 12%. This is paid directly into your super fund.
Duration of payment
Currently, payments run for 120 days, or 24 weeks based on a 5-day work week. This will be increasing to 130 days (26 weeks) from 1 July 2026.
If you’re a single parent, you will get all of the Parental Leave Pay days yourself. However, if you have a partner, some of the days must be reserved for them.
Sharing the payment with your partner
The current minimum reserved for your partner is 15 days, but this is increasing to 20 days from 1 July 2026. This sharing arrangement replaced the original ‘Dad and Partner Pay’.
You can split more than the minimum, at your discretion. However, it is important to note that only a maximum of 20 days can be taken at the same time.
Eligibility for Parental Leave Pay
There are eligibility criteria you need to meet to qualify for the Parental Leave Pay. This includes the following:
- Be caring for a newborn or adopted child
- Have met the income test (more on this below)
- Have met the work test – that is, you must have worked a minimum of 330 hours (around 1 day per week) in 10 of the 13 months before the birth or adoption of your child. This applies to both employees and self-employed people
- Be off work – meaning you’re taking time off to care for your child. Self employed people can’t spend more than 1 hour per day doing occasional administration type tasks.
- Be living in Australia with citizenship or a permanent visa (some other visa categories may also qualify). If you are new to Australia, you may need to wait 2 years before you can get Parental Leave Pay.
Income Test for Parental Leave Pay
There are two income tests – an individual income test and a family income test. These are based on the previous financial year’s earnings. If you don’t meet the individual test, you may still be eligible under the family test.
Under the individual income test, your income from the previous financial year must be below a certain threshold. This changes each year, so you’ll need to check the year that’s relevant to you. For the 2024–25 financial year (which applies to children born between 1 July 2025 and 30 June 2026), the limit is $180,007. It’s the person claiming Parental Leave Pay whose income is assessed under this test.
If you don’t meet the individual income test, you can look to the family income test. As a couple, your combined income can be up to $373,094 (again, based on the 2024–25 financial year). This is particularly helpful if the main income earner is the one claiming Parental Leave Pay.
In both cases, “income” refers to adjusted taxable income, which includes things like net investment losses and reportable super contributions. The idea is to stop people from reducing their taxable income just to meet the eligibility thresholds.
How to claim
The Parental Leave Pay is paid through your employer – the government pays your employer, and they then pass the money on to you through your usual pay cycle. If you’re self-employed, the payment comes directly to you.
There are a couple of steps to claim:
- Notify your employer at least 10 weeks before your child’s expected arrival that you intend to claim Parental Leave Pay
- Lodge your claim with Centrelink – if you have your Centrelink account linked to MyGov, this can be done online. Otherwise, you’ll need to contact Centrelink directly
Just be aware that you must lodge your claim within 52 weeks of your child’s birth or adoption. You have up to 2 years to use the full entitlement. If you’re particularly organised, you can submit a claim up to 3 months in advance, but payments won’t begin until after the birth or adoption.
Is the payment taxable?
Yes – Parental Leave Pay is taxable income.
If it’s paid through your employer, they’ll withhold PAYG tax at your usual rate. If it’s paid directly to you, the ATO will withhold 15% tax unless you request a different withholding rate.
Parental Leave Pay vs Maternity Leave
This is where a lot of people get confused – Parental Leave Pay is not the same as maternity leave.
Maternity leave (also called paternity leave or parental leave) refers to the time you take off work after your child is born or adopted. Under the Fair Work Act, eligible employees can take up to 12 months of unpaid leave and request an extension of up to another 12 months. This means your employer must keep your job available for when you return.
While maternity leave is usually unpaid, some employers do offer paid parental leave under your employment contract or an enterprise agreement. This varies by employer and is typically more common among larger corporates and government departments – although some small businesses offer it too.
Importantly, you can receive both employer-paid parental leave and Parental Leave Pay if you’re eligible. Getting an employer provided benefit does not exclude you from the Parental Leave Pay.
What if you’re not eligible for Parental Leave Pay?
If you don’t qualify because your income is too high, unfortunately, there’s no alternative government payment. But if you’re ineligible for other reasons – for example, not meeting the work test – you may be able to claim the Newborn Upfront Payment and Newborn Supplement, which are linked to your eligibility for Family Tax Benefit Part A.
Wrapping things up
There you have it – a rundown of how Parental Leave Pay works. If you want more details or the latest figures, head to servicesaustralia.gov.au. The rules and numbers do change, but now that you’ve got the basics, it should be a lot easier to navigate.
If you need help with your finances, we offer both Tailored Advice for comprehensive financial planning and Ask an Adviser for one-off, targeted questions.
