Meeting the income test

To get Parental Leave Pay for a child born or adopted from 1 July 2023, you must meet an income test.

We use your adjusted taxable income to work out your eligibility for Parental Leave Pay. If you don’t meet the individual income test, you may meet the family income test.

How the income test works

We’ll look at your income from the financial year before either:

  • the date of birth or adoption
  • the date you lodge your claim.

We’ll use whichever date is earlier.

To get Parental Leave Pay, you must have an individual adjusted taxable income of either:

  • $156,647 or less in the 2021-22 financial year
  • $168,865 or less in the 2022-23 financial year.

If you don’t meet the individual income test, you can use a family income test. You can get Parental Leave Pay if your and your partner’s adjusted taxable income is up to $350,000 in the applicable financial year.

Your partner is the person you’re in a relationship with on the date you claim. If you don’t have a partner, this limit will apply to just your income.

Example of meeting the family income test

Reema has a baby on 2 July 2023 and lodges a claim for Parental Leave Pay. Her income in the 2022-23 financial year was $200,000. This is over the individual income limit of $168,865. Reema’s partner Mohammed’s income was $90,000 in the 2022-23 financial year. Their combined income is $290,000 in the 2022-23 financial year. This is below the family income limit of $350,000. Reema meets the family income test for Parental Leave Pay.

Example of meeting the individual income test

Ashley and Dom adopt a child on 9 August 2023. Dom lodges a claim for Parental Leave Pay. Dom’s income in the 2022-23 financial year was $150,000. Ashley’s income in 2022-23 financial year was $210,000. Dom is under the individual income limit of $168,865 so meets the income test for Parental Leave Pay. Ashley is over the individual income limit and Dom and Ashley’s combined income is also over the family income limit of $350,000. Ashley doesn’t meet the individual or family income test for Parental Leave Pay. Only Dom can get Parental leave Pay. Because Dom has a partner, he can get a maximum of 90 days of Parental Leave Pay.

Example of single person meeting the family income test

Indira has a child on 5 August 2023 and lodges a claim for Parental Leave Pay. Their income in the 2022-2023 financial year was $170,000. This is over the individual income limit of $168,865. We then assess their family income to see if they’re eligible. Indira is single, so is under the family income limit of $350,000. Indira meets the family income test for Parental Leave Pay.

Page last updated: 1 July 2023.
QC 64489