Prepare Financially For Motherhood...

If Mother’s Day has you dreaming of pushing a pram, how do you best prepare financially? Here are four questions to consider if you want the path to parenthood to run smoothly.

Are you eligible for paid parental leave?

According to the Workplace Gender Equality Agency, about 60 per cent of major employers now provide paid parental leave. Those leading the way are offering gender-neutral parental leave. It can be taken by either parent with no qualifying period and may be up to 26 weeks of paid leave.

The most common length of paid primary carer’s leave is between seven and 12 weeks. One in four major employers provide that kind of paid primary carer’s leave.

Another 6 per cent offer more than 18 weeks.

If you’re working in a male-dominated industry conditions may not be as good. Half of the employers in male-dominated industries don’t offer any form of paid parental leave compared to one in four employers in female-dominated industries.

There is also government-funded parental leave pay. This entitles working parents of children born or adopted to up to 18 weeks of pay at the national minimum wage of $772.60 per week if they are the primary carer. For Dads or partners there is up to two weeks pay at $772.55.

What will happen to your super?

Analysis by the Association of Superannuation Funds of Australia (ASFA) suggests taking a year off for each of two children can lead to 10 per cent less in super at retirement.

Currently, there is no obligation on employers to pay super on paid parental leave. That is something ASFA wants to see change.

It advocates the payment of a $5000 super baby bonus could largely eliminate the impact of having a child and being out of the workforce for a year.

To ensure your super doesn’t stall have a chat to your financial planner before starting a family.

Voluntary contributions including spouse contributions could help cushion the impact on your super savings.

Insurances via your super fund? Check how a pregnant pause may affect your cover.

How will you handle everyday expenses?

Starting a family is an expensive time. Plus, you (or your partner) might be taking time out of the workforce or managing on a reduced income. Preparing for that time might require getting ahead with your mortgage repayments or running the ruler over your spending patterns.

What private health insurance do you need?

Want to have a baby in a private hospital or as a private patient in a public hospital? Most funds have a waiting period of up to 12 months for obstetrics. Cheaper hospital covers often don’t include obstetrics or will only cover you as a private patient in a public hospital.

To cover your unborn baby, you will need to transfer to a family or single parent policy. Each fund has different policies about how far in advance you need to transfer.

Even if you have private health cover there may be out-of-pocket costs such as specialist consultations and check-ups with your obstetrician.