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

Episode Date: October 6, 2026

Be honest. How much do you know about parental leave? Because for many of our listeners, it’s one of those things that you don’t really pay attention to, until you need to.  Welcome to a special solo episode of Deep Dive where Victoria takes us through the ins-and-outs of paid parental leave and what you might be entitled to, should you (and a partner) need it. This episode will introduce you to what the current status of Parental Leave Pay is in Australia, who’s responsible for it, and what happens if you’re employed… or self-employed. From describing how much time and money you might be eligible for, to whether your partner has any support throughout this whole process, we’ll unpack the current state of play. Whether you’re planning to have a family, or know someone navigating the process, V explains what entitlements to expect, when you’re expecting. And what to ask your employer should you need more support. DOWNLOAD OUR BABY BUDGET: Figuring out the costs of having a baby? Grab a free copy of our baby budget spreadsheet over on our resources page here: shesonthemoney.com/download-resources NEWBORN LIST: Prams, high-chairs, car seats. Check out our blog on some of the things you might be considering when budgeting for a baby. Search for ‘baby’ on the blog: shesonthemoney.com/blog IT COSTS HOW MUCH? Tune into Victoria’s Deep Dive episode about how much it cost her to have a baby through the private healthcare system over here: https://open.spotify.com/episode/2LF287iIFC143YjlgoCjg0?si=H-2PCKo1Qk2qDDtYIySV1g New here? Follow us on Instagram (@shesonthemoneyaus) for Q&As, bite-sized advice, daily money inspo... and relatable money memes that just get you.  Acknowledgement of Country By Nartarsha Bamblett aka Queen Acknowledgements (queenacknowledgements.com) The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 4451289See omnystudio.com/listener for privacy information.

She's on the money. She's on the money. My name's Natasha Bambler. I'm a proud First Nations woman and I'm here to acknowledge country. Hello beautiful friends. We gather on the lands of the Aboriginal people. We thank, acknowledge and respect the Aboriginal people's land that we're gathering on today. Take pleasure in all the land and respect all that you see.

She's on the Money podcast acknowledges culture, country, community and connections, bringing you the tools, knowledge and resources for you to thrive. Hello and welcome to She's on the Money, the podcast that discuss. all of the issues concerning your wealth goals so that you can feel more in control of your financial future, a future that may or may not involve a family of your own. In this week's deep dive, I'll be covering the topic of parental leave in Australia, what it is, how it works, and some of the ways that our community is making it work for them. Naturally, this topic might be sensitive for some of our listeners, so if this is true for you, please feel free to skip this one

or take breaks along the way. We understand you need to do what feels right for you right now. And the reason why we're talking about it now is because our community members wanted to learn more about the recent changes to this leave and how it might work depending on their relationship dynamics. So depending on whether you're a single parent or you're in a couple or maybe you're in a same-sex relationship, we're going to be exploring some of the examples that our listeners have taken with their paid parental leave so that you can have a deeper understanding of the financial sides of things. But before we dive in, here are a few words from our sponsors. Welcome back, my friends. And ever since we recorded our episode covering the costs of having a

baby, we've been receiving messages from the community asking for an episode specifically on parental leave. So what's the big deal? Well, Matt leave or paid parental leave might seem like this mysterious thing that exists but isn't ever really explained until you're accessing it, or you're the one approving it. Secondly, there is a big difference between what is allocated to new parents by the government and what your employer might actually allocate depending on their workplace policies. You might hear about some people getting a certain amount of leave through their workplace or people getting government payments independent of where they work.

Basically, it's all part of an overarching government scheme to support new parents because for some, this leave is non-negotiable, particularly when you are the one who is pregnant. Think about it this way. You cannot work if all your time is spent in recovery from delivery or if your hours are now defined by feeding and changing a newborn. And because this little person's survival kind of depends on you, the responsibility is really outsourced, at least not during this very first crucial period. The good news is parental leave pay has grown in recent years thanks to lobbying by various Australian unions and it's been informed by our general standard of living. Now we have a greater understanding of how much parents, newborns and families benefit when they

are given the financial support they need and personally deserve during those early weeks and months. So what is actually allocated to us? How much leave do we actually get? And what does this equate to in real dollars and cents? Well, new parents in Australia are entitled to up to 26 weeks of parental leave pay to care for children born or adopted after the 1st of July 2026. All up, that's approximately 130 days. And rather than assigning leave to one primary carer or a parent based on gender, it's now become a more accessible pool of leave, which carers can then draw from. If you're a single parent, you get the full allocation, whereas couples get a minimum of four weeks of leave reserved for each parent, and the rest can be allocated between them. And look,

there are some exemptions available for different medical reasons, complications and illnesses, but they usually need to be requested at the time of making the claim. Paid parental leave is funded by the government and paid at the national minimum wage. Right now, that's about $26.44 an hour. From the 1st of July, 26, the rate of parental leave pay is $1,04.70 per week before tax. All employees get the same weekly payment rate of parental leave pay. regardless of the hours they worked or their earnings before going on leave. And it's taxed remember, so you need to list it as a source of income at tax time.

Of course, your parental leave pay rate will be different if you are under 21 on a supported wage system, under a particular disability scheme, or if you're under a registered training agreement like apprenticeships or a traineeship. But if you are employed and eligible, then the government payments may be processed by your employer during your standard pay cycle through payroll. Your employer can't pay it in one lump sum or at half pay and they can't decrease your rate of pay or change your role within the company because you are on parental leave or reasons including that reason.

And while this sounds like a very clear rule, you'd be very surprised about how often we hear about people being made redundant during parental leave under what I would argue are very suspicious circumstances. But more on that subject a little bit later on. All right, I know exactly what you are thinking. V, wasn't it called maternity leave for a very long time? What's changed? So before the scheme was revised in 2023, there were leave allocations for the primary carer, usually the mum or the birthing parent, and a separate one for dads and partners. Literally, it was called dads and partners leave. Now parental leave pay is combined into one payment

and is accessible by any parent of a child to reflect the ways that parents actually want to care for their kids and the kind of flexibility and financial support they need to do that. So let's have a chat about eligibility. To access PLP, you have to meet certain residency requirements and income and work tests. You must have worked for at least 10 of the 13 months before the birth or adoption of your child for a total of at least 330 hours. To give you a bit of context, that's about a day a week for at least 10 of the 13 months before your child's birth or adoption. date. You have to meet an income test where your and, if applicable, your partners combined adjustable tax income has to sit below a threshold for the relevant financial year. Basically,

Services Australia will be looking at your income from the financial year before the birth or adoption of your child or the date you lodge your claim. For financial year 2026, the threshold was under $180,000 for individuals or under $386,000.000.000 for individuals or under $386,000.000. $5,525 for families. So if you don't qualify for one, apply under the other. And finally, there are some residency requirements. But please check the Services Australia website to confirm because, as I said, there are some exemptions. If you're accessing paid parental leave through your employer, you usually need to have completed at least 12 months of service with that employer to be eligible. However, this might change depending on your workplace policy. And some employers,

may offer a top-up payment in addition to what the government is paying. Essentially, they might pay the difference between the minimum wage and your full wage, but again, this depends on whether your employer offers this or not. And if you're wondering, what might happen to my job while I'm away, under the Fair Work Act, you may be entitled to 52 weeks of unpaid parental leave from your employer. This means your job might technically still be there waiting for you when you return. But Victoria, out what if you are self-employed or a sole trader? Well, my friends, you are still eligible to receive parental leave pay. You'll just need to meet the income test and of course you will still need to apply for this by registering the birth of your child or by applying to register their birth.

And if you're unemployed, the government will still provide you with parental leave pay straight into your bank account every two weeks after the days you've selected. Again, please check the Services Australia website for the most up-to-date information. Plus, they have a bunch of helpful examples to help demonstrate eligibility. Okay, so now you know about what paid parental leave is, how much it works out to be each pay packet, and who might be eligible for it, how do you actually access it? Do you need to apply for it? Well, the short answer is yes. If you're like me and love planning ahead, you might want to submit a claim nice and early. You can submit a claim up to three months before your expected due date.

This means you'll be able to nominate when your parental leave pay begins and the days that you will be taking it. It also means if you're employed, your employer will be able to register with Services Australia and opt in to provide your payments. To do this, you'll need to provide them with your child's details, including their full name and date of birth plus proof of birth or adoption, with 56 days of them being in your care. If you're planning on claiming parental leave pay after the birth or adoption of your child, you will need to submit a claim and provide proof of birth or adoption within 100 days.

Exciting stuff. All right, after the break, I'm going to share some of the ways our community members have taken their paid parental leave as well as some of the things they wish they'd known before taking it. Don't go anywhere. The good, the bad and the ugly. We asked you for your opinions and experiences around paid parental leave and you popped off in our DM. Before we get into the thick of it, I wanted to just start by saying that obviously starting a family is no mean feat. And that means parents, specifically women, have experienced stigmas around parenthood in the workplace.

Not only does that affect us socially and professionally, it's hurting us financially, widening things like the pay gap and super pay gap. And that as a society, if we have any hope of growing and evolving as a community, we need to be looking out for one another. But I also want to recognise that this isn't a lifestyle choice for everyone and that choosing to remain child free or perhaps being involuntary child free shouldn't be penalised. You shouldn't get fewer workplace rights and considerations. I definitely don't have all the answers. But surely there are some allowances we can make in our work policies to ensure everyone is supported to lead the lives that they want to lead on and off the clock. To put it into perspective, how many of us have worked at jobs where smokers in the office have been given allowances to take little breaks.

All right, I have said my piece. Now, I want to share some of the responses we've received when we asked our community how they took parental leave differently and why. A few of you divided your leave with your partners based on who had the better entitlements or earnings, with many of you returning to work sooner for career and all financial reasons. So I'm going to read out a few of the responses from you guys. Finances. I earned significantly more than my husband, so he became the primary carer at 24 weeks. Dad became primary carer at seven weeks, as I had a new job that I didn't want to say no to. Financially, I returned to work after six months off. You really helped me with this, Victoria. We split at 70-30 because I am the higher earner. I went back to work after two months and

pumped. Another person said, we split 50-50 to maintain my career. and give my husband a chance to bond with our child. One more of you said, my husband took over after 10 months as I earn more. And many of you wanted partners to feel more involved and split your leave that way. So some of the comments said, we did it 50-50,

six months each as it was important that we both understood and bonded with our child. Next person said, time for us both to be primary parent. My husband took all but two weeks of the government paid leave. Next person said, I earn more than my husband and he's honestly way better with the kids. It was perfect for us. Another person gave me a two-parter. She said, we both worked part-time in the first couple of years

of the kids' lives. Now my husband is the primary carer. He loves it and I am so happy to be building my career. And the last person on this topic said, even responsibility, even income, even time with baby, no resentment or missing out. And some of you were quite generously supported by your employers. First person said, my work gives both parents four and a half months for the baby. We are taking turns. Mum goes first. Next person said, dad took his very generous employer funded leave one day per week for an entire year. Another person said, finance. I had 18 weeks of the minimum government leave and my husband got 26 weeks with full pay and benefits. You know what we did. And the last person said,

Dad was on full pay as a primary carer for the first three months. And looking back, here are some notes you guys gave us on things you wish you'd known about parental leave pay before taking it. First person said super wasn't being paid. And this is important because it is now. The next person said,

be wary because the government payment is taxed at a base of 15%. You then have to manually change it at time of application to avoid a nasty tax bill. Next person said, how difficult child care was to get into and how much it didn't suit our family's needs. The flexibility of government leave and how you can take it. Another person said, to fix my mortgage because it was 2022 and it kept going up. Another person said, my work offered annual leave at half pay. I could have taken more time off if I'd known. Another person said, to get my husband to add money to my superannuation while I was not working.

Another person said, how much my partner thought it was a vacation and I thought he'd be helpful. And last but not least, one person said, I wish I'd known to try and prepay some of my bills like rates and electricity to take some pressure off. And finally, you gave us some tips on things you'd recommend for soon to be parents. First cab off the rank. Have clear conversations about your finances and expectations before you even get pregnant. Next was when you learn your pregnant, start putting an extra $20 into your bills count to be in advance.

Next person said, we stocked up on nappies, wipes, washing liquid, soap, anything that would be stored when I was working full time. It really helped. Next person said, splitting leave if allowed and using annual leave either side of public holidays so that they remain paid and you can push your leave out further. Next person said, if possible, share it with the other parents so they know how bloody hard it is. Next person said, take your Centrelink payments on the weekends too because it can put you into the year where you are earning less, which will save you some tax.

Next person said, dads can claim government leave on weekends or any day during the week, not at work. Another person said, plan your return to work childcare early, so you know what, when, where and how much ahead of time. Another person said, be wary, government leave doesn't kick in until birth, so take annual leave up until then. Next person said, our government payments took three months after the birth to final. come through. Yes, we filled in everything early, but the processing took forever. Next person said, I was rudely shocked when my twins didn't count as a multiple birth. Parental leave is only given to one child, not two. And last but not least, if your work doesn't do paid parental leave, just ask. The worst thing that they can do is say no. Now, before we wrap this

episode, I just wanted to include a little section on best practices within Australia, because while all businesses could be doing better, some are already really leading by example. And as I'm sure you've noticed, some members of our community have absolutely lucked out by working for those businesses going above and beyond for their parents on staff. According to the 2024, 2025 were Gia data. Sixty-eight percent of employers offer access to paid parental leave. either to both women and men or to women only in addition to their government schemes. That's honestly a really healthy number. So if we're checking with a fair work ombudsman, to outline some of the ways Australian

workplaces are going beyond their minimum legal obligations to create practical, flexible and tailored parental leave, policies for their teams look like. They develop a parental leave policy to help establish a fair and consistent approach to parental leave for working parents around the time of childbirth and adoption. They develop training and tools to help their employees understand their rights and requirements around working while pregnant, taking parental leave and then returning to work. This might include keep in touch days to keep employers engaged throughout extensive periods of leave or templates and checklists for managers to help them manage leave requests. They set clear communications expectations in place to make

sure employees understand their rights and arrangements while on leave and what their return to work arrangements might actually look like. They provide practical support for working parents and pregnant employees. For example, this might include flexible or work from home arrangements or time off for appointments, different start times or car parking closer to your workplace. They support them in transitioning back to work following parental leave as well as any flexible unpaid parental leave to guide them through their transition. They showcase successful parental leave experiences in the workplace so that it's normalized. They make superannuation contributions for their employees during paid parental leave. They provide equivalent benefits to both parents.

They review their policies regularly to ensure that not only are they meeting the minimum workplace requirements and their needs of their employees, but that they remain competitive in retaining their employees. I feel like we could go on to record an entire episode on parental leave hacks for the 1,400 responses received on this topic alone. All in all, there are systems in place that are designed to help support you through this important milestone, and many of them require a little bit of creativity and some healthy forward planning. And if our community's responses hadn't already made it abundantly clear, there's one right way to do this. Find a way that suits and reports you in the way that you want to do it. My friends, that is all we have time for today.

If this episode has you viewing paid parental leave a little bit differently, or maybe it's inspired you to start planning, please let us know by sending us a DM or sharing your thoughts in the comments. We'll be sharing all the helpful links mentioned in this episode in the show notes, and we may even follow this up with a little blog. How does that sound? Thanks again for joining us for another deep dive. Please remember to subscribe so that you never miss it. a beat and leave us a review if you like what you've heard. We'll catch you later in the week for another edition of Friday drinks. Until then, take care of yourselves and of each other. The advice shared on She's on the Money is general in nature and does not consider your

individual circumstances. She's on the Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's on the Money are authorised representatives of Money Sherpa, Pty-L-L-T-D, ABN 321649 27708, AFSL 451-289.