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Currently Australian baby bonus payment is not income tested. But Starting From 1 January 2009 a family income test will apply to the Baby Bonus.

For children who are born or who enter care on or after 1 January 2009, the income test will limit eligibility to families with an Adjusted Taxable Income of $75,000 or less in the six months following the birth or entry into care of the child.

If you receive the following types of income in the six-month period following the birth of the child or the child’s entry into care, you will need to include this income in your estimate of income for that period:

• Taxable income - this is your gross income minus allowable deductions and
• The value of net rental property losses or gain and
• Employer provided or reportable fringe benefits  and
• The value of any tax free pensions or benefits  and
• Any foreign income 
• The full amount of any child support you and/or your partner pay.

Claiming Baby bonus payment

To claim, you will need to advise the Family Assistance Office of your estimated taxable income for the 6 month period after the birth of your child or the child’s entry into your care.

You may be asked for evidence of your estimate at the point of claim. Evidence such as payslips, a statement of leave arrangements/entitlements, a letter from an employer on letterhead or a recent tax return may be required. If you are already receiving payments such as Family Tax Benefit (FTB), you may have your estimate checked against existing information, such as your FTB estimate or income support information.

Another change that will apply from 1 January 2009 is that claimants of Baby Bonus will have 52 weeks to lodge a claim from the date of birth of the child or, in the case of adoptions, from the child’s entry into your care.

The extension of the claim period from 26 weeks to 52 weeks will provide time to determine a reasonable income estimate or the opportunity to determine your actual income for the six months following the birth of your child, or the child’s entry into your care. The extended claim period will ensure parents/carers who are uncertain about their income have ample time to test or re-test their eligibility. For example, if you lodged an estimate of income shortly after the child’s birth for more than $75,000 over the 6 month period after the birth and your income turned out to be less than you estimated, you could reapply at a later time in the 52 week claim period.
Another change relates to the manner in which Baby Bonus is paid. Currently, Baby Bonus is usually paid as a lump sum. For children who are born or who enter care from 1 January 2009, families will be paid their Baby Bonus in 13 equal fortnightly instalments, paid from the date the claim is granted. This will assist parents/carers with the ongoing costs of a new child over a six-month period.