Baby Bonus V Maternity Leave

[surprised]

Hi all,

Hoping someone can help. Am currently trying to decide between BB and Mat Leave now that DS2 has arrived. DH and I both have unpredictable incomes (which aren't clear until we do our tax returns), so I'm having to do a lot of guesstimating. I've run a few different scenarios on the online estimator, but I get really different results, even when I change the figures only slightly.

What I'm wondering is whether there is an over-arching principle - for example, if you earn under $20K you'll be better off with BB or if DH earns over $X you'll be better off with Mat Leave. Hope that makes sense!

Thanks in advance xo

[~TT40~]

do you get mat leave from your work?

I'm only choosing the paid parental leave because im not elidgable to get mat leave from my employer, if i was then i probably would have chosen the bb.

also BB isn't taxed, PPL is. but PPL does work out more money than the BB.

I tried that online estimater, and could never seem to get it to work, every time i just told me what I already knew (like the figures I put in) nothing different. maybe I was doing it wrong?

[Me+him+bub]

I am on paid parental leave and I was told if combined income is over $160 000 than you can't get it I might be wrong but thats what I remember. Don't forget paid parental leave is more but if you get baby bonus you also get family tax benefit so it can be the same or even more depending on your DH's income. Ring FAO

[surprised]

Thanks ladies.

Teriae - self employed so my mean employer doesn't give me mat leave! Because Mat Leave is taxed it affects FTB part B (as well as needing to pay tax on it), so therein lies the dilemma!

Me+him+bub we're well under that cutoff. Unfortunately FAO can't really tell me much because I can't provide exact figures

I have a feeling (could be wrong!) that if the carbon tax goes through then the tax free threshold is jumping significantly - wonder if this will change who is better off with what?

[Miss E]

In theory, yes the PPL is a larger amount than the BB. But, if you earn more (or have earned more in that particular year) then it won't work out that way - as you're finding by the sounds of things.

Have you considered the dates that you will be taking it?

In my case, bubs is due in April. If I claim right away, I will be better off with the BB because I've got 10 months of taxable earnings under my belt which means the PPL will be taxed at a higher rate.

But, if I wait to 1 July to claim the PPL I will be better off with it than the BB because I expect my taxable income to be much lower in in 2012/13 than it will be in 2011/12.

Unfortunately, the only thing that you can use to guide you is the income tax thresholds (which I believe is what the FAO calculators are based on). If you know what you're taxable earnings are going to be for the year that you're claiming in then you can see what tax rate will be applied to the PPL (ie just deduct the 30 cents in the dollar, or whichever rate that applies to you, from the total amount and you will see what you will finish up with.

Tax rates 2011-12

The following rates for 2011-12 apply from 1 July 2011.

Taxable income = tax paid
0 - $6,000 = Nil
$6,001 - $37,000 = 15c for each $1 over $6,000
$37,001 - $80,000 = $4,650 plus 30c for each $1 over $37,000
$80,001 - $180,000 = $17,550 plus 37c for each $1 over $80,000
$180,001 and over = $54,550 plus 45c for each $1 over $180,000

As far as I know, your partners income has no bearing on the PPL and it is not means tested. It is only if you are looking at claiming other benefits (like FTB) that you need to consider how the PPL will increase your taxable earnings and how that will affect your other benefits.

Hope this makes sense and helps....

[Me+him+bub]

Miss E - I was told by my employer and FAO that it is all taxed the same despite what you have previously earned. 15% is what it is, I am a high income earner and am being payed through employer and it is the same as it is through the FAO, that wouldn't be fair if it depended on how much you earned for the entire year, claiming it before July shouldn't make a difference, I got a big back pay of 9 weeks worth of it approx $5000 before tax and it was still only taxed at the low/weekly level. Briggsy's girl will know for sure but I worked full time up until I went on leave and in a high bracket and it hasn't made a difference in the amount of tax taken, my best friend had her baby a few weeks after mine and she is taxed the same as me despite earning less than half of what I did.

[Jakabella]

I was better off with the PML as I got all the tax I paid back as I was classed as a low income earner.

[leckert]

Sorry to hijack

BG I've been playing a bit with the online estimator and DH & I are trying to work out if we'd be better off with him taking the ppl (or splitting it so he takes the majority of it) but I can't work out how to get that info in. I get paid mat leave through work so we're trying to work out which is better for us BB or PPL as I earn more than DH. Should I just try to ring up and see of someone can help me over the phone?


Sent from my iPhone using Tapatalk so sorry if I'm confusing you

[briggsy's girl]

yeah you'll have to ring and speak to someone - the rules for the father to take PPL are different so you'd have to check eligibility for it

[e_p]

the income limit for BB is $75k combined in the first 6 months of the baby's birth.

ETA: hehe...just saw BG responded just before me and with much better info

[LuluHB]

Thanks ladies. That's a relief - we've been counting on a bit of extra cash