Key elementsA new family income test will apply to the Baby Bonus, limiting eligibility to families with an adjusted taxable income equivalent to $150,000 or less a year. This will be calculated based on earnings in the six months following the birth of a child or an adopted child entering a parent's care. It will be applied pro rata on an annual basis, so that the amount is equivalent to $75,000 in the six months after birth. Around 16,000 families each year will not be eligible for the Baby Bonus due to the means test. An estimated 280,000 children will continue to benefit from the payment.
All families will be paid their Baby Bonus in 13 fortnightly instalments, paid from the date of claim. This will avoid the potential for misuse of lump sum payments, and will provide ongoing support to help with the costs of a new child.
Indexation of the Baby Bonus will now occur annually on 1 July, in line with other family payments.
Eligibility for the Baby Bonus will be extended to parents who adopt children under 16 years of age (currently less than two years of age). 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.