Ms Montford immediately sought and obtained approval from her employer for parental leave who passed an application for paid parental leave to Inland Revenue.
At the end of March, after the couple had taken custody of the child, she received a call from an information officer at MBIE, which administers the law, who told her she may not be eligible for parental leave.
Ms Montford referred the call to her adoptions social worker, who confirmed to MBIE that the couple had assumed care of the child permanently and adoption would occur when and if the biological parents consented.
On April 23, MBIE confirmed she was not eligible for paid parental leave, saying she did not have a "view to adopt" and had not taken steps to legally adopt the child when she assumed care.
Authority member Anna Fitzgibbon found that Ms Montford was entitled to parental leave payments.
The appropriate paperwork and notice had been given to her employer, Ms Fitzgibbon said.
"It is apparent in my view that Ms Montford assumed care of the child with a view of adoption if and when his biological parents give consent," she said.
"Ms Montford took the child home with the intention of adopting him and took leave from her employment to care for the child."
No costs were awarded, and MBIE was ordered to repay Ms Montford the filing fee.
An MBIE spokesman said the decision addressed an aspect of the Parental Leave & Employment Protection Act 1987 which is currently under consideration.
A discussion document seeking public feedback had recently been released and one of the key proposals was extending the eligibility of paid parental leave to include 'primary carers' other than parents, including home for life arrangements, the spokesman said.
The ministry had not made any decision to appeal the case, but has 28 days to lodge one.
Ms Montford declined to comment.
