Parental Leave Pay counted as income

We treat Parental Leave Pay as taxable income. This means it counts in your income test for payments from us.

How it affects your income support payment

We’ll include your and your partner’s Parental Leave Pay in your payment’s income test.

Adding this 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.

Find out about Parental Leave Pay effects on your existing payments and entitlements.

You can take your Parental Leave Pay days as any of the following:

  • a single block
  • multiple smaller blocks
  • single days
  • smaller blocks combined with single days.

You can choose how to take your payment.

When Parental Leave Pay 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 Parental Leave Pay.

How to minimise an overpayment

If you’re on income support and you backdate Parental Leave Pay 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 Parental Leave Pay.

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

When your income support payment is cancelled

Your payment will cancel if you 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 Parental Leave Pay ends.

What payment you can get when you have a new child

When you have a new child, you may be eligible for Parental Leave Pay.

If you’re not eligible for Parental Leave Pay, you may still be able to get both Newborn Upfront Payment and Newborn Supplement. If eligible, you’ll get Newborn Upfront Payment and Newborn Supplement as part of your Family Tax Benefit Part A payment. They won’t affect your income support payment.

Page last updated: 28 October 2025.
QC 35201