The 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.