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The basics of Paid Parental Leave for 2019



Paid Parental Leave (PPL) has come a long way baby! Back in 2002, when it was first introduced in New Zealand, parents and primary care givers received 12 weeks. However, as part of the current Government’s families’ package and 100-day plan, PPL was increased from 18 weeks to 22 weeks, with a further increase to 26 weeks from 1 July, 2020.

We’ve put together some of the basics to help you navigate your plans for PPL. Because everyone’s situation is different, this is just a basic outline to get you started. You can find more detailed info at the following links:  Employment New Zealand and Inland Revenue Department

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Paid parental leave (PPL) is a government-funded entitlement paid fortnightly by the IRD to eligible mothers and other primary carers, such as adoptive parents, Home for Life parents, whāngai, grandparents with full-time care, and other permanent guardians.

These payments go towards the loss of income when they take parental leave or stop working to care for their newborn baby, or a child under the age of six who is now in their care.

You can qualify for paid parental leave if:

✔️ You have worked for at least an average of 10 hours per week for at least any 26 of the 52 weeks up to your due date or date the child comes into your care. This can be for one employer or a combination of employers even if there were periods where you did not work.

✔️ You have been self-employed for at least an average of 10 hours per week for at least any 26 of the 52 weeks up to your due date or date the child comes into your care.

✔️ If you resign or cease self-employment instead of taking leave, or while you’re on PPL, your entitlement won't be affected.

Click here to find out more about your own eligibility.

Your PPL payments will be paid directly into your bank account each fortnight. The payments will be treated as income, just like your normal salary and wages or self-employed income. PPL payments have tax and student loan deductions taken out (at the rate that applies to you).

If you're an employee...

PPL payments equal your normal pay up to a current maximum of $564.38 a week before tax. You'll receive the average of your highest 26 of the last 52 weeks of earnings up to the date the child arrives in your care.

If you're self-employed...

PPL payments equal your average weekly earnings up to a current maximum of $564.38 a week before tax. The minimum payment is $165.00 each week before tax. If you earn less than this, or make a loss, this is what you'll receive. It's equivalent to 10 hours each week at the current minimum wage rate.

How long you can receive payments for:

Birth or due date

Maximum number of weeks

Baby is born and expected before 1 July 2018

✔️Up to 18 weeks

Baby is born or expected on or after 1 July 2018, and is born and expected before 1 July 2020

✔️Up to 22 weeks

Baby is born or expected on or after 1 July 2020

✔️Up to 26 weeks

Working or resigning while you're receiving paid parental leave

You can work limited Keeping in Touch (KIT) hours by agreement with your employer during your PPL without losing your entitlement.

Birth or due date    

Maximum KIT hours

Baby is born and expected before 1 July 2018

✔️ KIT hours increase to 52 hours over the 22 week PPL period.

Baby is born or expected on or after 1 July 2018, and is born and expected before 1 July 2020

✔️Up to 22 weeks

Baby is born or expected on or after 1 July 2020

✔️Up to 26 weeks

Just note, you can't work any of these KIT hours in the first four weeks after giving birth, but if you're receiving payments for a premature baby you may work additional KIT hours. For more information, see the Ministry of Business, Innovation and Employment's website or call them on 0800 20 90 20.

If you qualify for PPL payments, you'll continue to be entitled to your payments even if you resign from your employment instead of taking leave.

If you qualified for an in-work tax credit (IWTC) while you were working, you'll also receive IWTC while you are being paid PPL.

Maximum weekly amounts for PPL for previous year:

From 1 July 2017 until 30 June 2018, the maximum amount for employees is $539.08 (before tax). For self-employed with a loss, or income less than the minimum wage, the maximum amount is $157.50 (before tax).

Parental tax credit (PTC)

If your child was born before 1 July 2018, you may be entitled to receive more money by applying for parental tax credit rather than PPL if:

✔️you earn less than $28,004.60 a year before tax from the job that you're taking leave from, or

✔️you're expecting two or more children, eg, from multiple births or adoptions, or

✔️you're taking less than the maximum number of weeks paid for paid parental leave.

Click here to find out more in the Parental Tax Credit

Best Start tax credits

A Best Start tax credit (BSTC) is a payment to help families with the costs in a child’s first three years. It's a new component of the Working for Families Tax Credits (WfFTC) and replaces the above PTC. It's available for all qualifying families with children due or born on or after 1 July 2018. You can receive a BSTC for a child due or born on or after 1 July 2018. You can't receive a BSTC for the same period PPL is being paid. In your child's first year, the amount of BSTC is up to $60 a week ($3,120 a year). For your child's second and third years, the amount reduces by 21 cents for every dollar your family income goes over $79,000. The table below is based on a family with one child qualifying for BSTC.

Annual family income Best Start tax credit entitlement for second and third years
$79,000 ✔️ $3,120 ($60 a week)
$80,000 ✔️ $2,910 ($55 a week)
$85,000 ✔️ $1,860 ($35 a week)
$90,000 ✔️ $810 ($15 a week)
$93,858 ✔️ $0

Your BSTC entitlement will end when your child turns three.

Click here for more information on the Best Start Tax Credit

NOTE: If you delay applying for PPL your payment is backdated. If you are already receiving BSTC you could be overpaid BSTC by receiving both payments for the same period. To avoid an overpayment you can either apply for PPL first or delay your BSTC payments by contacting the IRD on 0800 227 773.

Information sourced from employment.govt.nz and ird.govt.nz and updated 8 January 2019. 



  


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