Paid Parental Leave counted as income

We treat Paid Parental Leave as taxable income. This means Parental Leave Pay and Dad and Partner Pay count in your income test for payments from us.

How it affects your income support payment

Parental Leave Pay and Dad and Partner Pay are taxable Centrelink payments. Read about paying tax on your payment.

Your payment’s income test will include your and your partner’s:

Adding these to the income test may do one of the following:

  • lower your payment
  • give you a lower rate for a new payment or stop you getting one
  • stop your payment if your total income is too high.

Read about what we assess as income.

When PPL ends

We’ll do both of the following:

  • test your income again
  • adjust your payment to your new income.

If we cancelled your payment because your income was too high, you can apply again when you stop getting either:

  • PLP
  • DaPP.

How to minimise an overpayment

If you’re on income support and you backdate PPL to the child’s date of birth, you’ll get an overpayment. You’ll have to pay us back. This is because we based your payment for that time on your income without PPL.

You can minimise this by choosing a start date in the future.

To get the full 18 weeks of PPL, the start date must be within 40 weeks of the birth or adoption. This allows the 12 week PPL period to be paid in full. The remaining 30 Flexible Paid Parental Leave days must be used within 2 years of your child’s birth or adoption.

Read about claiming Parental Leave Pay.

When your income support payment is cancelled

Your payment will cancel if your or your partner’s total income is too high. This will also affect your concession cards and Family Tax Benefit.

You can apply for the payment again when PLP or DaPP ends.

How to choose the right payment for you

When you have a new child you can choose either:

You need to decide which one is best for you.

Once you start on PLP, you can’t change to Newborn Upfront Payment and Newborn Supplement.

You can apply for PLP even if we’ve already paid you Newborn Upfront Payment and Newborn Supplement. But you’ll need to pay us back for those payments if we agree you can switch to PLP.

Page last updated: 30 June 2023.
QC 35201