Peter Costello

Media Releases

The Coalition's Baby Bonus - Helping 118,000 Australian Families and Counting

NO.077

THE COALITION'S BABY BONUS - HELPING 118,000 AUSTRALIAN FAMILIES AND COUNTING

The Government's Baby Bonus initiative recognises that one of the hardest times for families, financially, follows the birth of a first child. A family could lose one of its two incomes for a period of time as the mother, or father, gives up or reduces paid employment to care for the child.

The Baby Bonus provides for a tax break of up to $2,500 a year, each year for a maximum of five years. Mothers who have a child on or after 1 July 2001 are eligible to receive the bonus. This is practical, direct assistance with the cost of raising children.

To ensure that mothers on low incomes, including those who were not in the workforce also benefit from the measure, a minimum payment of $500 over a full year is available for those with taxable incomes of $25,000 or less in the year that they make their claim.

Families have been claiming the Baby Bonus in their tax returns from 1 July 2002, or for those who do not lodge tax returns, on a separate form available from the Tax Office.

To date, a total of 118,000 Australians have received a Baby Bonus payment. This amounts to more than $38 million worth of assistance to Australian families.

Of those, the vast majority of payments went to people with taxable incomes of $20,000 or less ($31.4 million, or 82% of the total $38.2 million).

The Baby Bonus may be less in the first year than in subsequent years, depending on the date of birth of the child. Entitlement to the Baby Bonus is pro-rated in the year of the child's birth to ensure that parents receive the benefit in respect of the period for which they have a child. However, because the Baby Bonus is also pro-rated in the year the child turns five, families will receive their full entitlement over five years regardless of when during the year the child was born.

The Baby Bonus is a solid policy of family assistance which the Coalition took to the last election and has delivered in full.

5 December 2002
CANBERRA

Contact: David Alexander
02 6277 7340

5 Dec 2002

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