The $15,000 Centrelink trap every grandparent should know about

When it comes to Centrelink’s maze of forms and eligibility rules, even the sharpest minds can stumble over a single misplaced tick. 

If you have adult children or grandkids who are about to start—or add to—a family, this is a must-read you’ll want to pass along.

Just ask Newcastle mum-of-two, Lexi, whose story serves as a timely caution for anyone dealing with government payments. 

Three years ago, after the birth of her first child, Lexi and her husband had budgeted carefully, banking on Paid Parental Leave to help them through those early months. Then came the shock: her claim was denied.

‘We were counting on that money…honestly, to be denied it, we were in a spiral,’ she revealed on social media.

The culprit? One innocent tick in the wrong box. Lexi had accidentally applied for both Paid Parental Leave and the Family Tax Benefit—even though she wasn’t eligible for the latter. 

That single misstep triggered an automatic rejection, and Centrelink told her the household income was too high. With up to $15,000 on the line, it’s the kind of error no young family can afford.

Thankfully, Lexi didn’t give up. She spotted the mistake weeks later, reapplied (with guidance), and eventually received back pay for the full 18 weeks she was entitled to—a lifeline that made a ‘big difference’ once the claim came through.

The drama resurfaced when her second baby arrived last year. Determined not to repeat history, Lexi booked an in-person appointment at her local Centrelink office and triple-checked every answer. ‘It took more time,’ she admits, ‘but everything was correct.’

Her advice? Apply early, and if you’re knocked back, ask for help—fast.

@themumbudget

Replying to @Lauren ☕🫧🍒✨ All it took was ONE box! Which is a pretty common mistake apparently! My husband does in fact NOT earn that much money and we are well within the bracket to be entitled to Paid Parental Leave. #maternityleave #mum #mumsoftiktok

♬ original sound – Lexi | The Mum Budget
Credit: themumbudget / TikTok

What your loved ones need to know about Paid Parental Leave

  • Apply up to three months before the due date. It’s all online via myGov.
  • Current payment: Up to 22 weeks at about $916 per week (the national minimum wage).
  • Changes ahead: From 1 July 2024 the payment jumps to 24 weeks and includes super; by 2026, it will reach 26 weeks.
  • Eligibility: Income, work and residency rules apply—so let Centrelink decide. Don’t self-rule out.

Common mistakes to avoid

  • Double-check every box. One wrong tick can derail a claim.
  • Don’t assume you miss out. Income thresholds can be tricky; apply first, worry later.
  • Start early. Extra time means room to fix errors or add paperwork.
  • Keep records. Save copies of forms and any Centrelink correspondence.
  • Seek help promptly. A denial isn’t final—book an appointment or ring the helpline.

Why it matters

For many young families, government payments are a financial lifeline. Missing out on thousands because of a clerical slip can derail carefully laid budgets—something retirees know all too well from decades of balancing books. 

Lexi’s social media warning (viewed over 100,000 times) is already saving other parents from the same heartache.

Have your say

Have your kids or grandkids battled Centrelink red tape? Did a small mistake cost them—or did persistence pay off? Share the story below. Your experience could spare another family months of stress and a hefty financial blow.

Pass it on: Forward this article to anyone you love who’s expecting or adopting—their wallet will thank you later.

Also read: Age pension freeze? Centrelink exposes the truth behind the fake warnings

Don Turrobia
Don Turrobia
Don is a travel writer and digital nomad who shares his expertise in travel and tech. When he is not typing away on his laptop, he is enjoying the beach or exploring the outdoors.

1 COMMENT

  1. Some centrelink offices are far better at helping than others. If you think you are correct and they are wrong it might be a good idea to try another centrelink office for a second opinion.

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