Budget 09 Families

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Families

1. Paid Parental Leave

Government-funded paid parental leave will provide 18 weeks of postnatal leave paid at the Federal minimum wage (currently $543.78 per week).

Primary carers will be eligible for the scheme if they:

• have worked continuously with one or more employers for at least 10 of the 13 months before the expected date of birth or adoption
  
• have worked at least 330 hours in those 10 months (equivalent to around one full day of work each week) prior to the date of birth or adoption of the child, and
  
• have an adjusted taxable income of $150,000 or less in the financial year prior to the birth or adoption of the child.
  

Parents who are eligible for Paid Parental Leave will be able to continue to access employer-funded leave around the time of the birth or adoption of a child. This includes employer-provided maternity leave and recreation leave. Government-funded Paid Parental Leave can be taken in conjunction with, or in addition to, employer-provided paid leave.

Paid Parental Leave will be available to contractors, casual workers and the self-employed, many of whom have no access to employer-provided paid parental leave entitlements.

In some cases, Paid Parental Leave will be able to be transferred to another caregiver if the primary carer returns to work before the end of the 18-week period.

Payments made under the scheme will be taxable. Parents who receive paid parental leave will not receive the Baby Bonus (except in the case of twins or multiple births), or Family Tax Benefit Part B during the 18-week Paid Parental Leave period.

Mothers and primary carers not in full-time paid work will continue to receive the current forms of family assistance (including the Baby Bonus) if they meet the relevant eligibility requirements.

The Government scheme will be available to parents for births and adoptions that occur on or after 1 January 2011. Parents will be able to lodge claims from 1 October 2010.

Superannuation payments will not initially be introduced for the Government’s Paid Parental Leave. The introduction will be considered as part of a comprehensive review of the scheme, within three years of the scheme’s implementation.

2. Reform of Family Payments

Higher income thresholds for family payments will be fixed at current levels for three years until July 2012.

From 1 July 2009 for a period of three years:

• the Family Tax Benefit (FTB) Part B primary earner income threshold will remain at $150,000
  
• the income threshold for receiving dependency tax offsets will remain at $150,000
  
• the Baby Bonus eligibility threshold will remain at $75,000 of family income in the six months following the birth or adoption of a child (equivalent to $150,000 a year), and
  
• the higher income free area of FTB Part A will remain constant.
  

The FTB Part A lower income free threshold (currently $42,559) and the FTB Part B secondary earner income threshold (currently $4,526) will continue to be indexed annually in line with increases in the costs of living.

Payment rates for FTB (Parts A and B) and the Baby Bonus will also continue to be indexed every year.

Consistent with indexation of other family assistance payment rates, from 1 July 2009, maximum rates of Family Tax Benefit Part A for children under 16 years will be indexed by movements in the Consumer Price Index only, instead of being linked to male total average weekly earnings (MTAWE) through the combined couple rate of pension.