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Federal government scraps baby bonus

baby bonus scrapedThe Government will abolish the Baby Bonus as of March 1, 2014, under the 2013 budget announced by Treasurer Wayne Swan on Tuesday May 14.

The payment will be replaced by a $2000 increase in Family Tax A following the birth of a first child. Second and subsequent children will trigger a $1000 increase. The increases will be paid in fortnightly installments.

The first installment will be $500, with the rest of the amount distributed with a person’s regular Family Tax Benefit Part A payment.

The eligibility requirements for the Baby Bonus will also change to be in line with Family Tax A. Currently a mother can earn up to $150,000 a year before she becomes ineligible for the Baby Bonus. Under the new scheme a mother must be eligible for Family Tax A to receive the payment – the cut-off for FTA is currently about $112,000 per household.

But the Government has made sure that these changes won’t come into effect until March 1, 2014, which means women who are currently pregnant will not be affected.

It also means there’s a very small window of opportunity for those trying to conceive to have a due date before the changeover, prompting commentators to predict a baby boom early next year!

The Paid Parental Scheme will also NOT be affected by the budget announcement.

The budget announcement has also prompted parents to question whether the government’s plan to lower the Baby Bonus from $5000 to $3000 for second and subsequent children, announced last year, will go ahead on July 1, 2013, as planned.

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2 comments so far -

  1. First of all, governments ALWAYS waste money starting a new thing, then scrapping it. Why can’t they get it right in the first place??? What a total waste of space.

    Secondly, it seems like the changes to paid parental leave (work test period) is a means to try and get women to have babies close together. For women who don’t qualify for any employer-funded maternity leave, they qualify for the governments paid parental leave of 18 weeks (approximately 4 months). To then qualify for the parental leave a second time around, they must meet the work test: work 10 out of the 13 months before birth. Which basically means: finish the first round of parental leave (4 months), fall pregnant, AND go back to work …..!

    Correct me if I’m wrong – but I had to put pen to paper to work all this out too. Why does it have to be SO complicated?
    And do we really want to encourage women to do that – have babies SO close together, and try and fit 330 hours of work while looking after a baby? The amount of women having postnatal depression would surely increase, women would be totally stressed having to do that.

    I think it’s really unfair – if you have a subsequent baby just outside this tight criteria, you miss out. Where’s the logic?

    • What do you mean about making women have babies close together? To get paid parental leave you need to have worked at least 10 months in the 13 months prior to the birth, so if you’ve worked for 10 months or 10 years, you’re still eligible, as long as it’s been at least 10 months…

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