My daughter-in-law is expecting a child in June.  They earn $83,000 combined.  Can she receive the new Paid Parental Leave Pay as well as the Baby Bonus?

Esther, Meadowbank, NSW

From 1 January 2011, eligible working parents of children born or adopted after that date may get the government-funded Paid Parental Leave Pay to help them care for a new baby.  The pay is for up to 18 weeks at the minimum wage (currently $570).

To be eligible your daughter-in-law must work at least 330 hours in total across 10 of the 13 months before the new baby arrives.  She can earn an annual salary of up to $150,000.

This is different to the Baby Bonus which is payable provided the family's combined income is under $75,000 in the six months immediately after the birth.

Unfortunately, whilst it appears that your daughter-in-law will meet the eligibility criteria for both payments, you cannot be paid both the Parental Leave Pay and the Baby Bonus for the same child.  The only instance where she could claim both is where there is a multiple birth (such as twins or triplets), and she claims Parental Leave Pay for one and the Baby Bonus for the others. 

On the surface of it, most eligible families appear to be better off choosing the Paid Parental Leave as the 18 weeks' pay totalling $10,260 is almost double the Baby Bonus ($5,294).  But this payment is subject to tax and may also affect other government benefits such as child support, health care cards, public housing and dependent spouse rebates. 

By contrast, the Baby Bonus is not taxable and not considered income for Family Assistance or Social Security purposes.

To ensure that your family chooses the payment which is the best financially for them, I suggest that you look at the "Paid Parental Leave Estimator" on the Centrelink website.  This Estimator offers a comparison between the two payments and shows which payment is likely to benefit the family the most.

A claim for the Paid Parental Leave can be made up to three months in advance.  Don't worry if you pick the wrong benefit initially.  Provided that you haven't received any Parental Leave payments, you can change your claim to the Baby Bonus.