Financial Planning for New Parents in Australia: What to Do Before and After the Baby Arrives (2026)

The months before birth are the best time to get your financial house in order:

• Review your budget and model the income drop: Calculate your expected household income during parental leave. Factor in Paid Parental Leave (PPL) from the government, any employer top-up payments, and your partner's income. Most households experience a meaningful income reduction - model this 3 to 4 months ahead and start building a buffer.
• Check employer parental leave entitlements: Many Australian employers offer paid parental leave on top of the government scheme. Check your employment contract and HR policies. Some offer 8 to 26 weeks at full pay; others offer nothing beyond the statutory minimum. Understanding this determines how long you can realistically take off.
• Build an emergency fund: If you have not already done so, build 3 to 6 months of essential expenses in a savings account before the birth. Post-birth expenses are unpredictable and the ability to absorb shocks without going into debt is especially important in the first year.
• Update your will and estate documents: A baby changes everything about your estate plan. If you do not have a will, make one before the birth. Appoint a guardian for your child. Review and update your superannuation beneficiary nominations - these are separate from your will and do not automatically update. Review life insurance cover for both parents.
• Review your insurance: Ensure you have adequate life insurance, TPD, and income protection for both parents. The financial impact of one parent dying or becoming unable to work is dramatically higher with a dependant. A new baby is the trigger many couples use to properly review their insurance.
• Check private health cover for obstetrics: Most private health funds require 12 months waiting period before covering pregnancy-related admissions. Ensure your membership reflects your new family structure and that waiting periods have been served before the birth.

Several Centrelink payments are available to eligible families - apply early as processing takes time:

• Paid Parental Leave (PPL): The government PPL scheme provides up to 20 weeks of payment at the national minimum wage (approximately $915.70 per week gross for 2025-26) for the primary carer. From July 2025, both parents can share the PPL entitlement more flexibly. Eligibility requires meeting income and work tests - generally earning less than $168,865 in the previous financial year and having worked for at least 10 of the 13 months before birth. Apply through Centrelink via myGov from 3 months before your due date.
• Family Tax Benefit Part A (FTB-A): An ongoing payment based on family income and number of children. Paid recurring or as a lump sum after tax time. For 2025-26, the maximum rate for a child under 13 is approximately $222.04 per fortnight. Income test applies and reduces at higher family incomes.
• Family Tax Benefit Part B (FTB-B): An additional payment for single-parent families or families where one parent earns little or no income. A secondary earner income test applies.
• Child Care Subsidy (CCS): Once your child enters formal childcare, the CCS significantly reduces out-of-pocket costs. The subsidy rate is income-tested, ranging from 90% for families earning under approximately $80,000 down to lower rates for higher incomes. Apply through Centrelink before your child starts care.
• Newborn Upfront Payment and Newborn Supplement: Available alongside FTB-A for families who are not also receiving PPL. Cannot be paid simultaneously with PPL - you receive one or the other.
• Health Care Card: Families receiving maximum FTB-A may be automatically eligible for a Low Income Health Care Card, providing discounts on prescription medicines under the PBS.

The first-year costs of a new baby vary significantly based on choices, but a realistic budget includes:

• One-off setup costs: Pram ($300 to $2,000), car seat ($150 to $800), cot and mattress ($300 to $1,000), baby monitor, feeding equipment, and clothing. Total setup spend of $3,000 to $6,000 is common, but many items can be sourced secondhand at significant savings.
• Ongoing monthly costs in the first year: Nappies ($80 to $150 per month), formula if not breastfeeding ($200 to $400 per month), clothing, healthcare, and activities.
• Childcare: The largest ongoing cost for most families. Full-time centre-based daycare in major Australian cities costs $120 to $200 or more per day before the Child Care Subsidy. After CCS, out-of-pocket costs range from minimal for low-income families to $60 to $120 per day for median-income families. Research wait lists - popular centres in major cities can have wait lists of 12 to 24 months.
• Lost income: The largest financial impact is often the reduction in household income during parental leave and any subsequent part-time work arrangements. The income gap between two full-time incomes and one full-time plus PPL can be $30,000 to $60,000 per year depending on salaries.
• Healthcare: Out-of-pocket costs for obstetric care, private hospital cover excesses, and paediatric visits. Private obstetric care can involve significant gaps even with private health insurance.

Parental leave - particularly extended leave - has a lasting impact on superannuation balances. For every year not working, your super misses out on employer contributions (currently 11.5% of earnings). Over decades, this compounds significantly. Women are disproportionately affected, contributing to the super gender gap at retirement.

Two strategies can help. First, check whether your employer pays super on their own-funded parental leave - some do, and it is worth confirming in your contract. Second, consider voluntary super contributions during or after parental leave to rebuild the gap. From 1 July 2025 the government also announced super contributions on Commonwealth PPL payments - check with Services Australia for the current status of this policy.

The first year of parenthood is one of the most expensive, and household budgets come under real pressure. Roopon membership delivers partner discounts across everyday spending categories - groceries, fuel, dining, and more - helping new parents make their reduced parental-leave income go further. Members also receive FREE included prize-draw entries per their plan and published campaign terms. from $19.99/month, Roopon is built to return more than it costs. ABN: 89 656 278 830 | 172-178 Maroubra Road, Maroubra NSW 2035