Baby bonus - adoptive parents

Introduction

If you are an adoptive parent, you may now be entitled to claim the baby bonus from the date the child entered your care.

The following information should be read together with the Baby bonus instructions and claim 2004-05.

Are you eligible to claim from the date the child entered your care?

You may be eligible to claim the baby bonus from the date the child entered your care if you adopted the child on or after 1 July 2001 and before 1 July 2004.

How does this affect your baby bonus?

It gives you a choice of up to four base years. These base years could be:

• the income year before the child entered your care
• the income year the child entered your care
• the income year before you gained legal responsibility for the child, or
• the income year you gained legal responsibility for the child.

If the child entered your care before 1 July 2001, you can still only claim from 1 July 2001 and your base year cannot be earlier than 2001.

How do you know which base year to choose?

You can only use the income year before you gained legal responsibility for the child or the income year you gained legal responsibility for the child as your base year if it would give you more baby bonus than either of the other two possible base years.

You can use the baby bonus base year calculator to determine which base year is of most benefit. Alternatively, the following information will help you determine which base year is of most benefit to you.

If your gross tax for all possible base years is less than or equal to $2,500:

You should keep the year before the child entered your care as your base year.

If your taxable income is $25,000 or less in the year you claim the baby bonus, you will be entitled to an annual amount of $500. This applies even if you are not required to lodge a tax return or pay tax. The annual amount will be reduced if you have not had legal responsibility for and care of your child for the whole year.

If your taxable income is more than $25,000 in a claim year, you will not get a baby bonus that year.

If your gross tax for at least one possible base year is more than $2,500:

You need to calculate how much baby bonus you would get using each possible base year.

If you would get more baby bonus using either the income year before, or the income year that, you gained legal responsibility for the child you must use one of those years.

If your base year is either the year before the child entered your care or the year before you started to have legal responsibility for the child and you make a claim each year, you may be entitled to a part-year payment in the first claim year and the year the child turns five, and full-year payments for the claims in between.

If your base year is either the year the child entered your care or the year you started to have legal responsibility for the child, you cannot claim the baby bonus in your base year. Should you make a claim each following year, you will be entitled to full year payments until the year the child turns five. In the claim where the child has turned five you include the number of days you were eligible in your base year.

You have not claimed the baby bonus before

If you have not claimed the baby bonus before, your first claim year is determined by your base year.

If your base year is the income year before the child entered your care, your first claim can be for the income year that the child entered your care. Similarly, if your base year is the income year before you gained legal responsibility for the child, your first claim can be for the income year that you gained legal responsibility for the child.

If your base year is the income year the child entered your care, your first claim can be for the income year after the child entered your care. Similarly, if your base year is the income year that you gained legal responsibility for the child, your first claim can be for the income year after you gained legal responsibility for the child.

You have claimed the baby bonus before

If you have claimed the baby bonus before and you would get more baby bonus using a base year of either the income year before, or the income year that, the child entered your care, you will need to request an amendment to any baby bonus claim you have made. This amendment will need to reflect your new base year, new base year taxable income and the date the child entered your care.

If your base year has changed, you may also be entitled to lodge a new claim for the income years between your new base year and when you originally first claimed the baby bonus. If your new base year is the same year that the child came into your care, you will not be able to make a claim for that year. You will be entitled to claim for this number of days when your child turns five.

If the child entered your care in the same income year that you obtained legal responsibility for the child, your base year won't change but you can still claim for the number of days from when the child entered your care until when you obtained legal responsibility for the child.

What to read/do next

More detailed information about the baby bonus is included in the Baby bonus instructions and claim 2004-05.

You can use the Baby bonus calculator to help you determine whether you are eligible to claim the baby bonus and if so, the amount you are entitled to claim.

If you need help to apply this information to your own circumstances, phone us on 13 28 61.