Australia’s Paid Parental Leave Scheme
Appendix: Worked examples of benefits to families from Paid Parental Leave
This Appendix contains examples of how the PPL scheme will work. It generally uses
2008-09 rates (see Notes on calculations below). These are not the rates that will apply
when the scheme commences.
WORKED EXAMPLE 1: Eligibility for PPL for working couple
Emily and Theo have been working for several years prior to the birth of their first child, Olivia, on 5 August. Emily and Theo earned $52,000 a year each prior to the birth of their baby.
| Usual annual salary | Annual salary in the financial year of the birth | |
|---|---|---|
| Emily |
$52,000 | $4,986 |
Theo |
$52,000 | $52,000 |
Total family income |
$104,000 | $56,986 |
Emily is not eligible for paid maternity leave from her employer. She is eligible for PPL and receives taxable payments of $543.78 per week for 18 weeks, a total of $9788. These begin from her first full pay period after the birth.
Emily cares full-time for her daughter and does not return to work before 30 June.
In the financial year of Olivia’s birth, Emily and Theo receive $2335 more in net family assistance and PPL, than they would have without PPL.
| Type of assistance | Current system without PPL | New system with PPL |
|---|---|---|
| Paid Parental Leave (taxable)* | $0 | $9,788 |
| Baby Bonus (non taxable) | $5,000 | $0 |
| Family Tax Benefit A | $ 1,759 | $ 1,759 |
| Family Tax Benefit B** | $ 3,256 | $919 |
| Total assistance | $10,015 | $12,466 |
| less | ||
| Net tax paid on PPL | n.a.*** | $116 |
| Total assistance (net of tax) |
$10,015 | $12,350 |
*PPL counts as income for determining eligibility for Family Tax Benefit
**Families are precluded from receiving FTB-B during the 18 week period of PPL.
*** not applicable
WORKED EXAMPLE 2: Family not eligible for PPL
Hayley and Rob’s second child is born on 1 February, around two years after their first child. Rob has an annual salary of $60,000 and Hayley has not returned to work since the birth of their first child.
| Usual annual salary | Annual salary in the financial year of the birth | |
|---|---|---|
| Hayley |
$0 | $0 |
Rob |
$60,000 | $60,000 |
Total family income |
$60,000 | $60,000 |
Hayley is not eligible for PPL but will receive the Baby Bonus and other family assistance. Her family receives a total amount of $12,213 in family assistance in the financial year of the birth of the new baby.
| Type of assistance | Current system without PPL | New system with PPL |
|---|---|---|
| Paid Parental Leave (taxable)* | $0 | Not Applicable |
| Baby Bonus (non taxable) | $5,000 | |
| Family Tax Benefit A | $3,519 | |
| Family Tax Benefit B** | $3,694 | |
| Total assistance | $12,213 | |
| less | ||
| Net tax paid on PPL | n.a.*** | |
| Total assistance (net of tax) |
$12,213 | |
*PPL counts as income for determining eligibility for Family Tax Benefit
**Families are precluded from receiving FTB-B during the 18 week period of PPL.
*** not applicable
WORKED EXAMPLE 3: Parents sharing receipt of PPL
Simone has been a nurse for seven years, earning around $60,000 a year. Her partner, Craig, has been a labourer for nine years, earning about $30,000 a year. Simone and Craig have their first baby, Isaac, on 1 August. Simone takes four weeks recreation leave prior to the birth. She is also entitled to six weeks paid maternity leave from her employer and she takes this from the date of birth.
| Usual annual salary | Annual salary in the financial year of the birth | |
|---|---|---|
| Simone |
$60,000 | $55,808 |
Craig |
$30,00 | $10,932 |
Total family income |
$90,000 | $66,740 |
Simone is eligible for PPL and decides to take her 18 weeks of PPL after her paid maternity leave is finished, starting six weeks after the birth.
At 15 weeks after the birth, Simone has the opportunity to accept a promotion to a nursing position with an annual salary of $70,000. Craig and Simone decide it would be better if Craig took unpaid leave to care for Isaac and Simone returns to full-time work. Simone has received nine weeks of PPL at this stage. Craig is eligible for PPL and Simone is able to transfer her unused PPL to him. He receives the remaining nine weeks of PPL and uses unpaid leave to look after Isaac until he is one-year-old.
In the financial year of the birth of their son, Craig and Simone receive $1414 more in net family assistance and PPL, than they would have without PPL.
| Type of assistance | Current system without PPL | New system with PPL |
|---|---|---|
| Paid Parental Leave (taxable)* | $0 | $9,788 |
| Baby Bonus (non taxable) | $5,000 | $0 |
| Family Tax Benefit A | $ 1,780 | $ 1,780 |
| Family Tax Benefit B** | $ 2,208 | $817 |
| Total assistance | $8,988 | $12,385 |
| less | ||
| Net tax paid on PPL | n.a.*** | $116 |
| Total assistance (net of tax) |
$8,988 | $10,402 |
*PPL counts as income for determining eligibility for Family Tax Benefit
**Families are precluded from receiving FTB-B during the 18 week period of PPL.
*** not applicable
WORKED EXAMPLE 4: Eligibility for PPL and Baby Bonus for twins
Jasmin and Luke have been employed full-time for over five years. They both received salaries of around $50,000 a year before starting their family. On 1 January, Jasmin has twins.
| Usual annual salary | Annual salary in the financial year of the birth | |
|---|---|---|
| Jasmin |
$50,000 | $25,00 |
Luke |
$50,000 | $50,000 |
Total family income |
$100,000 | $75,000 |
Jasmin is eligible for PPL and receives taxable payments of $543.78 per week for 18 weeks, a total of $9788. This begins from her first full pay period after the birth. She is not eligible for the Baby Bonus for the first baby but is eligible for the Baby Bonus for the second baby.
Jasmin cares full-time for her children and does not return to work before 30 June.
In the financial year of the birth of the twins, the family receive $2863 more in net family assistance and PPL, than they would have without PPL.
| Type of assistance | Current system without PPL | New system with PPL |
|---|---|---|
| Paid Parental Leave (taxable)* | $0 | $9,788 |
| Baby Bonus (non taxable) | $10,000 | $5,000 |
| Family Tax Benefit A | $1,929 | $1,929 |
| Family Tax Benefit B** | $0 | $0 |
| Total assistance | $11,929 | $16,717 |
| less | ||
| Net tax paid on PPL | n.a.*** | $1,925 |
| Total assistance (net of tax) |
$11,929 | $14,792 |
*PPL counts as income for determining eligibility for Family Tax Benefit
**Families are precluded from receiving FTB-B during the 18 week period of PPL.
*** not applicable
Notes on calculations:
Calculations are based on the Federal Minimum Wage as at May 2009; the 2008-09 payment rates for family assistance; the 2008-09 tax rates and thresholds, except for Medicare which is in 2007-08 terms (changes to Medicare thresholds are legislated each year).
Net tax includes income tax, tax offsets, tax rebates and the Medicare levy.
Calculations assume mothers obtain their usual wage until the birth unless otherwise stated and that none of thefamilies are private renters.
[ top ]