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Baby Bonus is a payment that assists families with the cost of a new child and is indexed annually on 1 July, in line with other family payments. Currently this payment is not income-tested. From 1 January 2009 a family income test will apply to the Baby Bonus. For children who are born or who enter care on or after 1 January 2009, the income test will limit eligibility to families with an Adjusted Taxable Income (ATI) of $75,000 (indexed) or less in the six months following the birth or entry into care of the child.
Components of Adjusted Taxable Income (ATI)
If you receive the following types of income in the six-month period following the birth of the child or the child's entry into care, you will need to include this income in your estimate of income for that period:
To claim, you will need to advise the Family Assistance Office (FAO) of your estimated ATI for the six-month period after the birth of your child or the child's entry into your care.
You may be asked for evidence of your estimate at the point of claim. Evidence such as payslips, a statement of leave arrangements/entitlements, a letter from an employer on letterhead or a recent tax return may be required. If you are already receiving payments such as Family Tax Benefit (FTB), you may have your estimate checked against existing information, such as your FTB estimate or income support information.
Another change that will apply from 1 January 2009 is that claimants of Baby Bonus will have 52 weeks to lodge a claim from the date of birth of the child or, in the case of adoptions, from the child's entry into your care.
The extension of the claim period from 26 weeks to 52 weeks will provide time to determine a reasonable income estimate or the opportunity to determine your actual income for the six months following the birth of your child, or the child's entry into your care. The extended claim period will ensure parents/carers who are uncertain about their income have ample time to test or re-test their eligibility. For example, if you lodged an estimate of income shortly after the child's birth for more than $75,000 over the 6 month period after the birth and your income turned out to be less than you estimated, you could reapply at a later time in the 52 week claim period.
Instalment Payments and period of care requirements
Another change relates to the manner in which Baby Bonus is paid. Currently, Baby Bonus is usually paid as a lump sum. For children who are born or who enter care from 1 January 2009, families will be paid their Baby Bonus in 13 equal fortnightly instalments, paid from the date the claim is granted. This will assist parents/carers with the ongoing costs of a new child over a six-month period.
Eligibility for Baby Bonus will also be based on the period of time the child is in your care within the first 26 weeks from the birth of the child, or from the child's entry into your care in cases of adoption. Where care has changed during the 26 week period and you are eligible for a portion of the Baby Bonus based on the period the child was in your care, you will receive the Baby Bonus in fewer than 13 instalments.
Another change to note is that for a non-parent carer to be eligible for Baby Bonus, you must have taken care of the child within 26 weeks from birth and be likely to continue to have the care of the child for no less than 26 weeks. This has changed from 13 weeks and applies to children who enter care from 1 January 2009.
Adoption
Currently, adoptive parents are able to claim Baby Bonus for children adopted up to the age of two. From 1 January 2009, eligibility for the Baby Bonus will be extended to parents who adopt children under 16 years of age. This will apply to children who enter your care on or after 1 January 2009. Increasing the upper age limit of the Baby Bonus for adoptive children will assist parents with the cost of adopting a child and recognise that, as with a newborn child, an adoptive parent may need to spend time out of the workforce to welcome and settle their child. This policy change also recognises that a significant number of adopted children are aged over two years when they enter the care of their adoptive parents.
Further Information
FREE link ==> Baby Bonus Calculator
FREE fact sheet Baby Bonus
For further information about these changes, contact the FAO on 13 6150.
(source Familiy Assistance Office)
Baby Bonus is a payment that assists families with the cost of a new child and is indexed annually on 1 July, in line with other family payments. Currently this payment is not income-tested. From 1 January 2009 a family income test will apply to the Baby Bonus. For children who are born or who enter care on or after 1 January 2009, the income test will limit eligibility to families with an Adjusted Taxable Income (ATI) of $75,000 (indexed) or less in the six months following the birth or entry into care of the child.
Components of Adjusted Taxable Income (ATI)
If you receive the following types of income in the six-month period following the birth of the child or the child's entry into care, you will need to include this income in your estimate of income for that period:
- Taxable income - this is your gross income less allowable deductions (if you receive/received a taxable government pension or benefit you will need to include this amount in your taxable income estimate); and
- Employer provided or reportable fringe benefits; and
- The value of net rental property losses/gain; and
- The value of any tax free pensions or benefits; and
- Any foreign income which is exempt under Section 23AF or 23AG of the Income Tax Assessment Act, LESS
- The full amount of any child support you and/or your partner pay.
To claim, you will need to advise the Family Assistance Office (FAO) of your estimated ATI for the six-month period after the birth of your child or the child's entry into your care.
You may be asked for evidence of your estimate at the point of claim. Evidence such as payslips, a statement of leave arrangements/entitlements, a letter from an employer on letterhead or a recent tax return may be required. If you are already receiving payments such as Family Tax Benefit (FTB), you may have your estimate checked against existing information, such as your FTB estimate or income support information.
Another change that will apply from 1 January 2009 is that claimants of Baby Bonus will have 52 weeks to lodge a claim from the date of birth of the child or, in the case of adoptions, from the child's entry into your care.
The extension of the claim period from 26 weeks to 52 weeks will provide time to determine a reasonable income estimate or the opportunity to determine your actual income for the six months following the birth of your child, or the child's entry into your care. The extended claim period will ensure parents/carers who are uncertain about their income have ample time to test or re-test their eligibility. For example, if you lodged an estimate of income shortly after the child's birth for more than $75,000 over the 6 month period after the birth and your income turned out to be less than you estimated, you could reapply at a later time in the 52 week claim period.
Instalment Payments and period of care requirements
Another change relates to the manner in which Baby Bonus is paid. Currently, Baby Bonus is usually paid as a lump sum. For children who are born or who enter care from 1 January 2009, families will be paid their Baby Bonus in 13 equal fortnightly instalments, paid from the date the claim is granted. This will assist parents/carers with the ongoing costs of a new child over a six-month period.
Eligibility for Baby Bonus will also be based on the period of time the child is in your care within the first 26 weeks from the birth of the child, or from the child's entry into your care in cases of adoption. Where care has changed during the 26 week period and you are eligible for a portion of the Baby Bonus based on the period the child was in your care, you will receive the Baby Bonus in fewer than 13 instalments.
Another change to note is that for a non-parent carer to be eligible for Baby Bonus, you must have taken care of the child within 26 weeks from birth and be likely to continue to have the care of the child for no less than 26 weeks. This has changed from 13 weeks and applies to children who enter care from 1 January 2009.
Adoption
Currently, adoptive parents are able to claim Baby Bonus for children adopted up to the age of two. From 1 January 2009, eligibility for the Baby Bonus will be extended to parents who adopt children under 16 years of age. This will apply to children who enter your care on or after 1 January 2009. Increasing the upper age limit of the Baby Bonus for adoptive children will assist parents with the cost of adopting a child and recognise that, as with a newborn child, an adoptive parent may need to spend time out of the workforce to welcome and settle their child. This policy change also recognises that a significant number of adopted children are aged over two years when they enter the care of their adoptive parents.
Further Information
FREE link ==> Baby Bonus Calculator
FREE fact sheet Baby Bonus
For further information about these changes, contact the FAO on 13 6150.
(source Familiy Assistance Office)
comments
5 Responses to "Changes to Baby Bonus from 1 January 2009"Hi, There is a fair bit of confusion around what "adjusted taxable income" is made up of, even with the folks at familyassist. If I have a 6 month salary of 72K and net rental LOSS of $10K. Will this 10K be added to the $72K to assess or substracted. If its added I am not eligible. But I don't understand why the LOSS should be added to the income.
- willee29
Hi willee29. The answer to your question is yes. The rental loss is added back on to your "adjusted" income. I would still recommend you go though the process and lodge an application.
Thanks David for your response. But one more clarification. If the net rental loss is added back to the "adjusted income", should the income be then specified as 72-10= 62 K (in the above example) to start with, so that when rental loss is added back it will be go back to 72K and remain below 75K. - willee29
Hi Willie29
Yes, that is correct - the taxable income (including the loss) then add back the rental loss.
Hi. My husband has an adjusted taxable income of $74k and I have $5k (as I am now on maternity leave for 6 months) so we didn't think that we were eligible. However a collegue has suggested that its only based on the primary income earner. Is this the case?
Thanks.
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