Introduction Of Baby Bonus Legislation
INTRODUCTION OF BABY BONUS LEGISLATION
The Government has today introduced legislation to implement its election commitment to establish a First Child Tax Refund, or Baby Bonus.
The Baby Bonus 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.
This Government has always believed in supporting Australian families.
The Baby Bonus will provide 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 toward the cost of raising children.
This Government has a strong record of providing for families.
Now, once again, we are delivering. The Baby Bonus allows a mother to average her income for tax purposes. A mother on a salary of $30,000 in the year before the birth of her baby pays $5,380 in income tax. If she averaged that $30,000 over the five years when she was out of the workforce with a child, then her income would be below the tax free threshold and she would pay no tax at all.
The Baby Bonus effectively allows her to average her income and claim back the tax of $5,380 she has paid in five annual instalments of $1,076 each.
To ensure that mothers on low incomes, including those who were not in the workforce also benefit from the measure, a minimum annual payment of $500 will be available for those with taxable incomes of $25,000 or less in the year that they make their claim. Where the mother returns to work and the father stays at home, the Baby Bonus will be able to be transferred to the father.
Parents returning to work on a part-time basis will still be able to receive the Baby Bonus, with a reduction according to the income they earn. For example, if a parent returns to work and earns one-third of the income they earned before they had the child, the Baby Bonus will be reduced by one-third.
The Baby Bonus will also be available to parents who adopt a child under 5 years of age on or after 1 July 2001. To ensure that families who already have a child do not miss out, the Baby Bonus will also be available for the first child born on or after 1 July 2001 for families which already have children.
The Baby Bonus can be claimed in tax returns from 1 July 2002, or for those who do not lodge tax returns, on a separate form that will be available from the Tax Office.
This is targeted help for hundreds of thousands of families. We expect that around 245,000 mothers and their families will benefit from the Baby Bonus in the first year, and that eventually it will deliver benefits to some 600,000 families at any one time.
This is the implementation of a solid policy that only this Government has the credentials to deliver. The Coalition doesn't just talk about families and their needs. It delivers.
14 March 2002
Contact: Niki Savva
02 6277 7340
14 Mar 2002
Peter Costello in The Spectator
7th Annual Meeting of International Forum of Sovereign Wealth Funds
Peter Costello speaks at 7th Annual Meeting of International Forum of Sovereign Wealth Funds
What Malcolm Must Do Now
Peter Costello in the Daily Telegraph