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How Does Parental Leave Work? · She's On The Money

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Speaker 1: She's on the money.
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Speaker 2: She's on the money.
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Speaker 3: My name is Natasha Bamblett. I'm a proud First Nations
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Speaker 3: woman and I'm here to acknowledge country. Hello beautiful friends.
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Speaker 3: We gather on the lands of the Aboriginal people. We thank,
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Speaker 3: acknowledge and respect the Aboriginal people's land that we're gathering
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Speaker 3: on today. Take pleasure in all the land and respect
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Speaker 3: all that you see. She's on the Money podcast acknowledges culture, country,
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Speaker 3: for you to thrive.
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Speaker 1: Hello and welcome to She's on the Money, the podcast
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Speaker 1: that discusses all of the issues concerning your wealth goals
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Speaker 1: so that you can feel more in control of your
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Speaker 1: financial future, a future that may or may not involve
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Speaker 1: a family of your own. In this week's deep dive,
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Speaker 1: I'll be covering the topic of parental leave in Australia,
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Speaker 1: what it is, how it works and some of the
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Speaker 1: ways that our community is making it work for them. Naturally,
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Speaker 1: this topic might be sensitive for some of our listeners,
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Speaker 1: so if this is true for you, please feel free
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Speaker 1: to skip this one or take breaks along the way.
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Speaker 1: We understand you need to do what feels right for
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Speaker 1: you right now. And the reason why we're talking about
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Speaker 1: it now is because our community members wanted to learn
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Speaker 1: more about the recent changes to this leave and how
1:15
Speaker 1: it might work depending on their relationship dynamics. So depending
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Speaker 1: on whether you're a single parent or you're in a
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Speaker 1: couple or maybe you're in a same-sex relationship, we're going
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Speaker 1: to be exploring some of the examples that our listeners
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Speaker 1: have taken with their paid parental leave so that you
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Speaker 1: can have a deeper understanding of the financial sides of things.
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Speaker 1: But before we dive in, here are a few words
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Speaker 1: from our sponsors.
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Speaker 2: Welcome back, my friends. And ever since we recorded our
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Speaker 2: episode covering the costs of having a baby.
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Speaker 1: We've been receiving messages from the community asking for an
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Speaker 1: episode specifically on parental leave.
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Speaker 2: So what's the big deal?
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Speaker 1: Well, mat leave or paid parental leave might seem like
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Speaker 1: this mysterious thing that exists but isn't ever really explained
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Speaker 1: until you're accessing it or you're the one approving it. Secondly,
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Speaker 1: there is a big difference between what is allocated to
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Speaker 1: new parents by the government and what your employer might
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Speaker 1: actually allocate depending on their workplace policies. You might hear
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Speaker 1: about some people getting a certain amount of leave through
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Speaker 1: their workplace or people getting government payments independent of where
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Speaker 1: they work. Basically, it's all part of an overarching government
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Speaker 1: scheme to support new parents. Because for some, this leave
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Speaker 1: is non-negotiable, particularly when you are the one who is pregnant.
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Speaker 2: Think about it this way.
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Speaker 1: You cannot work if all your time is spent in
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Speaker 1: recovery from delivery or if your hours are now defined
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Speaker 1: by feeding and changing a newborn. And because this little
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Speaker 1: person's survival kind of depends on you, the responsibility is
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Speaker 1: rarely outsourced, at least not during this very first crucial period.
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Speaker 1: The good news is parental leave pay has grown in
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Speaker 1: recent years thanks to lobbying by various Australian unions and
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Speaker 1: it's been informed by our general standard of living. Now
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Speaker 1: we have a greater understanding of how much parents, newborns
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Speaker 1: and families benefit when they are given the financial support
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Speaker 1: they need and personally deserve during those early weeks and months.
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Speaker 1: So what is actually allocated to us? How much leave
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Speaker 1: do we actually get? And what does this equate to
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Speaker 1: in real dollars and cents? Well, new parents in Australia
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Speaker 1: are entitled to up to 26 weeks of parental leave
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Speaker 1: pay to care for children born or adopted after the
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Speaker 1: 1st of July, 2026. All up, that's approximately 130 days.
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Speaker 1: And rather than assigning leave to one primary carer or
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Speaker 1: a parent based on gender, it's now become a more
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Speaker 1: accessible pool of leave, which carers can then draw from.
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Speaker 1: If you're a single parent, you get the full allocation,
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Speaker 1: whereas couples get a minimum of four weeks of leave
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Speaker 1: reserved for each parent and the rest can be allocated
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Speaker 1: between them. And look, there are some exemptions available for
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Speaker 1: different medical reasons, complications and illnesses, but they usually need
4:03
Speaker 1: to be requested at the time of making the claim.
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Speaker 1: Paid parental leave is funded by the government and paid
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Speaker 1: at the national minimum wage.
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Speaker 2: Right now, that's about $ 26. 44 an hour.
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Speaker 1: From the 1st of July, 2026, the rate of parental
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Speaker 1: leave pay is $ 1, 004. 70 per week before tax. All employees
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Speaker 1: get the same weekly payment rate of parental leave pay,
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Speaker 1: regardless of the hours they worked or their earnings before
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Speaker 1: going on leave. And it's taxed, remember, so you need
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Speaker 1: to list it as a source of income at tax time.
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Speaker 1: Of course, your parental leave pay rate will be different
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Speaker 1: if you are under 21, on a supported wage system,
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Speaker 1: under a particular disability scheme, or if you're under a
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Speaker 1: registered training agreement like apprenticeships or a traineeship. But if
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Speaker 1: you are employed and eligible, then the government payments may
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Speaker 1: be processed by your employer during your standard pay cycle
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Speaker 1: through payroll. Your employer can't pay it in one lump
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Speaker 1: sum or at half pay, and they can't decrease your
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Speaker 1: rate of pay or change your role within the company
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Speaker 1: because you are on parental leave or reasons including that reason.
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Speaker 1: And while this sounds like a very clear rule, you'd
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Speaker 1: be very surprised about how often we hear about people
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Speaker 1: being made redundant during parental leave under what I would
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Speaker 1: argue are very suspicious circumstances. But more on that subject
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Speaker 1: a little bit later on. All right, I know exactly
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Speaker 1: what you are thinking. V, wasn't it called maternity leave
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Speaker 1: for a very long time?
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Speaker 2: What's changed?
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Speaker 1: So before the scheme was revised in 2023, there were
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Speaker 1: leave allocations for the primary carer, usually the mum or
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Speaker 1: the birthing parent. and a separate one for dads and partners. Literally,
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Speaker 1: it was called Dads and Partners Leave. Now parental leave
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Speaker 1: pay is combined into one payment and is accessible by
5:51
Speaker 1: any parent of a child to reflect the ways that
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Speaker 1: parents actually want to care for their kids and the
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Speaker 1: kind of flexibility and financial support they need to do that.
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Speaker 2: So let's have a chat about eligibility.
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Speaker 1: To access PLP, you have to meet certain residency requirements
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Speaker 1: and income and work tests.
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Speaker 2: You must have worked for at least.
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Speaker 1: 10 of the 13 months before the birth or adoption
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Speaker 1: of your child for a total of at least 330 hours.
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Speaker 1: To give you a bit of context, that's about a
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Speaker 1: day a week for at least 10 of the 13
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Speaker 1: months before your child's birth or adoption date. You have
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Speaker 1: to meet an income test where your, and if applicable,
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Speaker 1: your partner's combined adjustable tax income has to sit below
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Speaker 1: a threshold for the relevant financial year. Basically, Services Australia
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Speaker 1: will be looking at your income from the financial year
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Speaker 1: before the birth or adoption.
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Speaker 2: Of your child or the date you lodged your claim.
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Speaker 1: For financial year 2026, the threshold was under $ 180, 007 for
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Speaker 1: individuals or under $ 386, 525 for families.
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Speaker 2: So if you don't qualify for one, apply under the other.
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Speaker 2: And finally.
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Speaker 1: There are some residency requirements, but please check the Services
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Speaker 1: Australia website to confirm because as I said, there are
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Speaker 1: some exemptions. If you're accessing paid parental leave through your employer,
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Speaker 1: you usually need to have completed at least 12 months
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Speaker 1: of service with that employer to be eligible. However, this
7:21
Speaker 1: might change depending on your workplace policy and some employers
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Speaker 1: may offer a top-up payment in addition to what the
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Speaker 1: government is paying. Essentially, they might pay the difference between
7:31
Speaker 1: the minimum wage and your full wage, but again, this
7:34
Speaker 1: depends on whether your employer offers this or not. And
7:38
Speaker 1: if you're wondering, what might happen to my job while
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Speaker 1: I'm away? Under the Fair Work Act, you may be
7:43
Speaker 1: entitled to 52 weeks of unpaid parental leave from your employer.
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Speaker 1: This means your job might technically still be there waiting
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Speaker 1: for you when you return. But Victoria, what if you
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Speaker 1: are self-employed or a sole trader? Well, my friends, you
7:58
Speaker 1: are still eligible to receive parental leave pay. You'll just
8:01
Speaker 1: need to meet the income test. And of course, you
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Speaker 1: will still need to apply for this by registering the
8:06
Speaker 1: birth of your child or by applying to register their birth.
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Speaker 1: And if you're unemployed, the government will still provide you
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Speaker 1: with parental leave pay straight into your bank account every
8:15
Speaker 1: two weeks after the days you've selected. Again, please check
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Speaker 1: the Services Australia website for the most up-to-date information. Plus,
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Speaker 1: they have a bunch of helpful examples to help demonstrate eligibility. Okay,
8:28
Speaker 1: so now you know about what paid parental leave is,
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Speaker 1: how much it works out to be each pay packet,
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Speaker 1: and who might be eligible for it, how do you
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Speaker 1: actually access it? Do you need to apply for it? Well,
8:40
Speaker 1: the short answer is yes. If you're like me and
8:43
Speaker 1: love planning ahead, you might want to submit a claim
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Speaker 1: nice and early. You can submit a claim up to
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Speaker 1: three months before your expected due date. This means you'll
8:52
Speaker 1: be able to nominate when your parental leave pay begins
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Speaker 1: and the days that you will be taking it. It
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Speaker 1: also means if you're employed, your employer will be able
9:00
Speaker 1: to register with Services Australia and opt in to provide
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Speaker 1: your payments. To do this, you'll need to provide them
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Speaker 1: with your child's details, including their full name and date
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Speaker 1: of birth, plus proof of birth or adoption, with 56
9:13
Speaker 1: days of them being in your care. If you're planning
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Speaker 1: on claiming parental leave pay after the birth or adoption
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Speaker 1: of your child... you will need to submit a claim
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Speaker 1: and provide proof of birth or adoption within 100 days.
9:25
Speaker 2: Exciting stuff.
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Speaker 1: All right, after the break, I'm going to share some
9:28
Speaker 1: of the ways our community members have taken their paid
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Speaker 1: parental leave, as well as some of the things they
9:32
Speaker 1: wish they'd known before taking it.
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Speaker 2: Don't go anywhere.
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Speaker 1: The good, the bad and the ugly. We asked you
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Speaker 1: for your opinions and experiences around paid parental leave and
9:46
Speaker 1: you popped off in our DMs. Before we get into
9:50
Speaker 1: the thick of it, I wanted to just start by
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Speaker 1: saying that obviously starting a family is no mean feat,
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Speaker 1: and that means parents, specifically women, have experienced stigmas around
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Speaker 1: parenthood in the workplace.
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Speaker 2: Not only does that affect us socially and.
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Speaker 1: Professionally it's hurting us financially widening things like the pay
10:09
Speaker 1: gap and super pay gap and that as a society
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Speaker 1: if we have any hope of growing and evolving as
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Speaker 1: a community we need to be looking out for one another.
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Speaker 1: But I also want to recognise that this isn't a
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Speaker 1: lifestyle choice for everyone and that choosing to remain child
10:25
Speaker 1: free or perhaps being involuntary child free shouldn't be penalised.
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Speaker 1: You shouldn't get fewer workplace rights and considerations. I definitely
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Speaker 1: don't have all the answers, but surely there are some
10:37
Speaker 1: allowances we can make in our work policies to ensure
10:40
Speaker 1: everyone is supported to lead the lives that they.
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Speaker 2: Want to lead on and off the clock.
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Speaker 1: To put it into perspective, how many of us have
10:49
Speaker 1: worked at jobs where smokers in the office have been
10:51
Speaker 1: given allowances to take little breaks?
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Speaker 2: All right, I have said my piece.
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Speaker 1: Now, I want to share some of the responses we've
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Speaker 1: received when we asked our community how they took parental
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Speaker 1: leave differently and why. A few of you divided your
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Speaker 1: leave with your partners based on who had the better
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Speaker 1: entitlements or earnings, with many of you returning to work
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Speaker 1: sooner for career and or financial reasons. So I'm going
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Speaker 1: to read out a few of the responses from you guys.
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Speaker 2: Finances.
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Speaker 1: I earned significantly more than my husband, so he became
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Speaker 1: the primary carer at 24 weeks. Dad became primary carer
11:25
Speaker 1: at seven weeks as I had a new job that
11:27
Speaker 1: I didn't want to say no to.
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Speaker 2: Financially, I returned to work after six months off.
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Speaker 1: You really helped me with this, Victoria. We split at
11:37
Speaker 1: 70-30 because I am a higher earner. I went back
11:40
Speaker 1: to work after two months and pumped. Another person said,
11:43
Speaker 1: we split 50-50 to maintain my career and give my
11:46
Speaker 1: husband a chance to bond with our child. One more
11:50
Speaker 1: of you said, my husband took over after 10 months
11:52
Speaker 1: as I earn more. And many of you wanted partners
11:56
Speaker 1: to feel more involved and split your leave that way.
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Speaker 1: So some of the comments said, we did it 50-50,
12:02
Speaker 1: six months each as it was important that we both
12:04
Speaker 1: understood and bonded with our child. Next person said, time
12:08
Speaker 1: for us both to be primary parent. My husband took
12:11
Speaker 1: all but two weeks of the government paid leave. Next
12:14
Speaker 1: person said, I earn more than my husband and he's
12:17
Speaker 1: honestly way better with the kids. It was perfect for us.
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Speaker 2: Another person gave me a two-parter.
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Speaker 1: She said, we both worked part-time in the first couple
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Speaker 1: of years of the kids' lives. Now my husband is
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Speaker 1: the primary carer. He loves it and I'm so happy
12:32
Speaker 1: to be building my career. And the last person on
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Speaker 1: this topic said, even responsibility, even income, even time with baby,
12:40
Speaker 1: no resentment or missing out. And some of you were
12:43
Speaker 1: quite generously supported by your employers. First person said, my
12:48
Speaker 1: work gives both parents four and a half months for
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Speaker 1: the baby.
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Speaker 2: We are taking turns. Mum goes first.
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Speaker 1: Next person said, dad took his very generous employer funded
12:58
Speaker 1: leave one day per week for an entire year.
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Speaker 2: Another person said finance.
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Speaker 1: I had 18 weeks of the minimum government leave and
13:07
Speaker 1: my husband got 26 weeks with full pay and benefits.
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Speaker 1: You know what we did. And the last person said
13:15
Speaker 1: dad was on full pay as a primary carer for
13:18
Speaker 1: the first three months. And looking back, here are some
13:22
Speaker 1: notes you guys gave us on things you wish you'd
13:25
Speaker 1: known about parental leave pay before taking it. First person
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Speaker 1: said super wasn't being paid and this is important because
13:34
Speaker 1: it is now. The next person said be wary because
13:38
Speaker 1: the government payment is taxed at a base of 15%.
13:42
Speaker 1: You then have to manually change it at time of
13:44
Speaker 1: application to avoid a nasty tax bill. Next person said
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Speaker 1: how difficult childcare was to get into and how much
13:53
Speaker 1: it didn't suit our family's needs. The flexibility of government
13:57
Speaker 1: leave and how you can take it Another person said
14:01
Speaker 1: to fix my mortgage because it was 2022 and it
14:04
Speaker 1: kept going up. Another person said my work offered annual
14:08
Speaker 1: leave at half pay. I could have taken more time
14:11
Speaker 1: off if I'd known. Another person said to get my
14:14
Speaker 1: husband to add money to my superannuation while I was
14:17
Speaker 1: not working. Another person said how much my partner thought
14:22
Speaker 1: it was a vacation and I thought he'd be helpful.
14:26
Speaker 1: And last but not least, one person said I wish
14:30
Speaker 1: I'd known to try and prepay some of my bills
14:32
Speaker 1: like rates and electricity to take some pressure off. And finally,
14:37
Speaker 1: you gave us some tips on things you'd recommend for
14:39
Speaker 1: soon-to-be parents.
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Speaker 2: First, cab off the rank.
14:43
Speaker 1: Have clear conversations about your finances and expectations before you
14:47
Speaker 1: even get pregnant. Next was when you learn you're pregnant,
14:51
Speaker 1: start putting an extra $ 20 into your bills count to
14:55
Speaker 1: be in advance. Next person said, we stocked up on nappies, wipes,
15:00
Speaker 1: washing liquid, soap, anything that would be stored when I
15:04
Speaker 1: was working full time.
15:05
Speaker 2: It really helped.
15:07
Speaker 1: Next person said, splitting leave if allowed and using annual
15:11
Speaker 1: leave either side of public holidays so that they remain
15:14
Speaker 1: paid and you can push your leave out further. Next
15:18
Speaker 1: person said, if possible, share it with the other parents
15:21
Speaker 1: so they know how bloody hard it is. Next person said,
15:25
Speaker 1: take your Centrelink payments on the weekends too because it
15:28
Speaker 1: can put you into the year where you are earning less,
15:31
Speaker 1: which will save you some tax. Next person said, dads
15:35
Speaker 1: can claim government leave on weekends or any day during
15:39
Speaker 1: the week not at work. Another person said, plan your
15:43
Speaker 1: return to work childcare early so you know what, when,
15:47
Speaker 1: where and how much ahead of time. Another person said,
15:52
Speaker 1: Next person said, Next person said, Next person said, And
16:20
Speaker 1: last but not least, if your work doesn't do paid
16:23
Speaker 1: parental leave, just ask. The worst thing that they can
16:26
Speaker 1: do is say no. Now, before we wrap this episode,
16:29
Speaker 1: I just wanted to include a little section on best
16:32
Speaker 1: practices within Australia, because while all businesses could be doing better,
16:37
Speaker 1: some are already really leading by example. And as I'm
16:41
Speaker 1: sure you've noticed, some members of our community have absolutely
16:45
Speaker 1: lucked out by working for those businesses going above and
16:48
Speaker 1: beyond for their parents on staff. According to the 2024-2025
16:52
Speaker 1: WGEA data, 68% of employers offer access to paid parental leave,
16:59
Speaker 1: either to both women and men or to women only,
17:03
Speaker 1: in addition to their government schemes.
17:06
Speaker 2: That's honestly a really healthy number.
17:08
Speaker 1: So if we check in with the Fair Work Ombudsman
17:10
Speaker 1: to outline some of the ways Australian workplaces are going
17:13
Speaker 1: beyond their minimum legal obligations to create practical, flexible and
17:17
Speaker 1: tailored parental leave, policies for their teams look like. They
17:22
Speaker 1: develop a parental leave policy to help establish a fair
17:25
Speaker 1: and consistent approach to parental leave for working parents around
17:29
Speaker 1: the time of childbirth and adoption. They develop training and
17:33
Speaker 1: tools to help their employees understand their rights and requirements
17:37
Speaker 1: around working while pregnant, taking parental leave and then returning
17:42
Speaker 1: to work. This might include keep in touch days to
17:45
Speaker 1: keep employers engaged throughout extensive periods of leave or templates
17:49
Speaker 1: and checklists for managers to help them manage leave requests.
17:53
Speaker 1: They set clear communications expectations in place to make sure
17:57
Speaker 1: employees understand their rights and arrangements while on leave. and
18:01
Speaker 1: what their return to work arrangements might actually look like.
18:04
Speaker 1: They provide practical support for working parents and pregnant employees.
18:09
Speaker 1: For example, this might include flexible or work-from-home arrangements, or
18:13
Speaker 1: time off for appointments, different start times, or car parking
18:17
Speaker 1: closer to your workplace. They support them in transitioning back
18:21
Speaker 1: to work following parental leave, as well as any flexible
18:24
Speaker 1: unpaid parental leave, to guide them through their transition. They
18:28
Speaker 1: showcase successful parental leave experiences in the workplace so that
18:33
Speaker 1: it's normalized. They make superannuation contributions for their employees during
18:38
Speaker 1: paid parental leave. They provide equivalent benefits to both parents.
18:44
Speaker 1: They review their policies regularly to ensure that not only
18:47
Speaker 1: are they meeting the minimum workplace requirements and their needs
18:50
Speaker 1: of their employees, but that they remain competitive in retaining
18:54
Speaker 1: their employees.
18:55
Speaker 2: I feel like we could go on to.
18:57
Speaker 1: Record an entire episode on parental leave hacks for the
19:02
Speaker 1: 1,400 responses received on this topic alone. All in all,
19:05
Speaker 1: there are systems in place that are designed to help
19:07
Speaker 1: support you through this important milestone. and many of them
19:11
Speaker 1: require a little bit of creativity and some healthy forward planning.
19:15
Speaker 1: And if our community's responses hadn't already made it abundantly clear,
19:20
Speaker 1: there's one right way to do this. Find a way
19:23
Speaker 1: that suits and supports you in the way that you
19:26
Speaker 1: want to do it. My friends, that is all we
19:28
Speaker 1: have time for today. If this episode has you viewing
19:31
Speaker 1: paid parental leave a little bit differently, or maybe it's
19:34
Speaker 1: inspired you to start planning, please let us know by
19:37
Speaker 1: sending us a DM or sharing your thoughts in the comments.
19:40
Speaker 1: We'll be sharing all the helpful links mentioned in this
19:43
Speaker 1: episode in the show notes, and we may even follow
19:46
Speaker 1: this up with a little blog.
19:47
Speaker 2: How does that sound?
19:49
Speaker 1: Thanks again for joining us for another deep dive please
19:52
Speaker 1: remember to subscribe so that you never miss a beat
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Speaker 1: and leave us a review if you like what you've
19:57
Speaker 1: heard we'll catch you later in the week for another
19:59
Speaker 1: edition of friday drinks until then take care of yourselves.
20:03
Speaker 2: And of each other.
20:08
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20:10
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20:14
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