Paid Paternity Leave in Australia

Paid Parental Leave became available from January 2011 in Australia.

The Paid Parental Leave scheme:

Is government funded, not an employers expense.
Is for eligible working parents (Australian residents) of children born or adopted on or after 1 January 2011.
Can be taken by either parent.
Is paid at the National Minimum Wage – currently $569.90 a week.
Is for a maximum of 18 weeks.
Can be taken any time within the first year after birth.

The plan is that families, whose primary carer earns under $150,000 a year, will be paid for 18 weeks at the federal minimum wage. This figure will be classed as taxable income.

Eligibility criteria includes that you must have:

worked for at least 10 months of the 13 months prior to the birth or adoption of your child, and
worked for at least 330 hours in that 10 month period (just over one day a week), with no more than an eight week gap between two consecutive working days.

Parental Leave Pay will stop after 18 weeks or when starting work again, whichever is sooner.

Families who receive the Parental Leave Pay will no longer get the Baby Bonus or Family Tax Benefit part B.
Non working parents will continue to receive the baby bonus and Family Tax Benefit part B.
Parents can choose to take EITHER the Parental Leave Pay OR the and a calculator to help in deciding which is most beneficial has been provided by Centrelink at: Paid Parental Leave Comparison Estimator

It has been calculated that both groups of parents will end up getting about the same in total benefits, within about $200 of each other.

A very quick example is:

Parental Leave Pay 18 weeks at $569.90 = $10,258.20 taxable
Baby Bonus $5,294 + 18 weeks FTB at the maximum rate ($1227) = $6,521.00 tax free

After taking account of the tax payable on the Parental Leave Pay, and assuming returning to work after 18 weeks, and earning the average female full time wage, then the net difference comes out at $560 in favour of taking the Parental Leave Pay.

A newspaper report quoted the following, before the July 2010 increases:

A stay-at-home mother with a partner on average earnings will continue to receive more than $10,000 in government assistance in the year after the birth of her baby. This is more than the $9792 before tax on offer under the paid maternity leave scheme.
Source: www.theaustralian.com.au

Sources:

Federal Minimum Wage as at 1st July 2010: $569.90 per week (before tax).
Maximum rate of Family Tax Benefit B as at 1st July 2010: $136.36 per fortnight.
Marginal Tax Rate of 31.5% used in Tax and Medicare calculations.