Having a baby — Australian tax & Centrelink guide

Six entitlements and thresholds every Australian parent should know about, with a claims timeline from 20 weeks before birth through to returning to work. Each stop links to the calculator that does the maths.

The six stops

Paid Parental Leave → Family Tax Benefit → Child Care Subsidy → Medicare Levy Surcharge (family threshold) → Parenting Payment → Super on PPL + spouse contribution →

Paid Parental Leave

24 weeks in 2025-26 (rising to 26 weeks from 1 July 2026). $948.10/week gross. Individual income test: $180,007 or less. ATO pays 12% super on PPL from 1 July 2025.

Weeks

24 (pre-1 Jul 2026)

Daily rate

$189.62

Weekly rate

$948.10

Individual income test

≤ $180,007

Family income test

≤ $373,094

Super on PPL (from Jul 2025)

12%

Tax note: PPL is taxable income. Services Australia withholds PAYG at a default rate; you can vary by submitting W-4 equivalent (Centrelink income tax deduction form) if your MTR is higher.

Services Australia — PPL →

Family Tax Benefit

Part A per-child fortnightly payment + Part B single-income supplement + Newborn Upfront ($667) + Newborn Supplement (up to $2,008). Not automatic — must claim.

FTB Part A max

$227.36/ft per child 0-12

Newborn Upfront

$667

Newborn Supplement max

$2,008.65 over 13 weeks

Tax note: FTB is tax-exempt (not assessable income). But adjusted taxable income (which includes PPL, salary sacrifice add-back, investment losses) determines your FTB rate.

FTB calculator →

Child Care Subsidy

0-90% reduction on approved childcare fees, paid to the provider. Based on family combined income, activity test (work/study/volunteer hours), and service type.

Max subsidy (income ≤$83,280)

90%

Taper zone

$83,280 → $533,280

Activity test tiers

8 / 16 / 48+ hours/ft

Tax note: CCS is paid directly to the provider — you don't receive cash. Reduces out-of-pocket fees, not a tax deduction.

CCS calculator →

Medicare Levy Surcharge (family threshold)

Adding a dependant shifts you from singles to family MLS thresholds. Family base threshold is $202,000 + $1,500 per dependant after the first.

Family base threshold

$202,000

Per-extra-dependant

+$1,500

MLS rate

1.0% / 1.25% / 1.5%

Tax note: If family income exceeds the threshold and you don't hold hospital cover, you pay MLS on TOP of the 2% Medicare levy. Basic hospital cover at ~$100/month is usually cheaper.

Medicare levy + MLS calculator →

Parenting Payment

Income-tested Centrelink payment for principal carers of a child under 14 (single) or under 6 (partnered). Tested against income and assets, with a hard assets cut-off.

PPS max (w/ energy supp)

~$1,053.70/fortnight

PPP max

~$831.00/fortnight

Single principal carer free area

$214.60/ft + $24.60/child

Tax note: Parenting Payment is assessable income — pay PAYG or plan for it at tax time. Consider tax withholding via Centrelink to avoid a bill.

Parenting Payment calculator →

Super on PPL + spouse contribution

From 1 July 2025, ATO pays 12% SG on PPL (PPLSC). Partner can claim $540 spouse-contribution offset for contributing up to $3,000 if the recipient earns under $37,000.

PPLSC rate

12%

First PPLSC payment

After EOFY 2025-26

Spouse offset max

$540

Spouse income cap for full offset

< $37,000

Tax note: PPLSC is paid directly to your fund and counts as a concessional contribution (counts toward $30k cap but no 15% contributions tax on the $). Spouse contribution is non-concessional.

Spouse super calculator →

Claims & milestones timeline

12-20 weeks before birth

Private health insurance check

Add newborn to policy ahead of time. MLS applies to family income from conception year — check your threshold.
Private health rebate calculator →
16 weeks before birth

Submit PPL pre-claim with Centrelink

Services Australia accepts claims up to 3 months before due date. Faster approval = earlier first payment.
12 weeks before birth

Confirm employer leave + top-up

Check whether employer pays top-up salary or super during unpaid portion. Most awards now include some.
10 weeks before birth

Give formal notice to employer

Written notice of leave start date is a legal requirement under the Fair Work Act for eligibility for 12 months unpaid leave.
Birth

Register birth + get Medicare + CRN

Birth registration → Medicare enrolment → Centrelink Customer Reference Number. Needed for all claims.
Within 4 weeks of birth

Finalise PPL claim + add child to Medicare

Services Australia pays from lodgement onward; backdating is limited. First payment usually within 2-3 weeks of claim.
Within 12 months of birth

Claim Family Tax Benefit + Newborn Supplement

FTB Part A / Part B + Newborn Upfront Payment ($667) + Newborn Supplement (up to $2,008 over 13 weeks).
FTB calculator →
Returning to work

Apply for Child Care Subsidy

CCS reduces out-of-pocket childcare by 0-90% based on family income. Claim before childcare starts — payments flow to your provider.
Childcare subsidy calculator →
Return to work + low hours

Check Parenting Payment eligibility

If returning part-time or as the primary carer with low income, Parenting Payment Single/Partnered may apply.
Parenting Payment calculator →
EOFY after year of leave

Lodge return — claim everything PPL missed

Verify PAYG withheld on PPL matches, claim WFH during late-pregnancy, and check LITO/MLS/HELP adjustments.
Tax refund estimator →

Commonly missed opportunities

PAYG variation during PPL — Default withholding on PPL is at a flat rate that is usually too high for the leave-taker (their taxable income drops) and too low once they return. Request a PAYG variation to avoid a big refund/bill at EOFY.
Salary sacrificing into super during the unpaid portion — If the non-leave partner is still working, a modest salary sacrifice often yields the best $-per-effort tax outcome for the household.
Spouse super contribution — If the leave-taker earns under $37,000 in the year, the other partner can contribute up to $3,000 and claim a $540 offset — a guaranteed 18% return.
FTB supplements — End-of-year supplements (~$938.66 Part A, ~$458.55 Part B per child) are paid only if you lodge your tax return and your family income stays within the limit. Missing a lodgement costs these supplements.
Private health insurance rebate + MLS timing — If one partner's income pushes the family over $202,000, take out a basic hospital policy before EOFY. The MLS saving usually exceeds the premium.
Employer parental leave top-up + PPLSC — Many awards now require employer super contributions during unpaid leave. Check your EBA; these are in addition to the government's 12% on PPL from July 2025.

Does Parental Leave Pay get taxed?

Yes. Parental Leave Pay is taxable income paid at the National Minimum Wage ($189.62/day or $948.10/week before tax in 2025-26). Services Australia or your employer withholds PAYG. It counts toward your adjusted taxable income for Family Tax Benefit, Medicare levy and HELP repayments — but note it does NOT count as income for the PPL income test itself (circular).

Do I get superannuation on Parental Leave Pay?

From 1 July 2025, the ATO pays 12% superannuation on your Parental Leave Pay — the Paid Parental Leave Superannuation Contribution (PPLSC). You don't apply separately; it's paid automatically to your fund after the financial year ends (first PPLSC payments land from July 2026). This is in addition to any employer top-up super you negotiate while on leave.

How long is PPL in 2025-26?

For children born or adopted between 1 July 2025 and 30 June 2026: 24 weeks (120 days) of government PPL. This rises to 26 weeks from 1 July 2026. Partners can claim a share — the default split is 20 weeks to the birth parent and 2 weeks reserved for the other parent. Up to 4 weeks can be taken simultaneously. Payment is flexible and can be taken any time in the child's first 2 years.

Do I need to buy private health insurance to avoid Medicare Levy Surcharge?

If your family adjusted taxable income exceeds $202,000 (singles threshold rises too with dependants), MLS is 1.0-1.5% of income. A basic hospital policy at ~$100/month is usually cheaper than the surcharge once your income passes the threshold. Newborns are automatically covered under most family policies from birth — you must notify your fund within the grace period (usually 2 months) to avoid a waiting period for obstetric-related claims next pregnancy.

Will Family Tax Benefit start automatically?

No. You must claim FTB through Centrelink after the birth — it is not automatic. Claims can be backdated up to 12 months but not earlier. FTB Part A is based on family income and number/age of children; Part B is an additional supplement for single-income families. Claim as soon as you have the child's birth registered and a Services Australia reference number.

When do I need to update my employer?

Give your employer at least 10 weeks written notice of your intended leave start date, and confirm 4 weeks before leave begins. Request a PAYG Income Statement at the time you stop work — you may need it for Centrelink's income verification. If you want employer top-up super during leave, negotiate this before you stop work.

Sources

Last updated April 2026. Reflects 2025-26 financial year rules. PPL rate (NMW-indexed), MLS thresholds and FTB supplements are reviewed 1 July each year. This is general information — consult a registered tax agent or Services Australia for personal circumstances.