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A New Tax System (Family Assistance) (Improved Access to Baby Bonus) Amendment Bill 2008

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A New Tax System (Family Assistance) (Improved Access to Baby Bonus) Amendment Bill 2008


Explanatory Memorandum


Circulated by authority of Senator Natasha Stott Despoja


GENERAL OUTLINE: Policy Rationale


The Australian Democrats believe adoptive parents should be treated with the same respect and recognition provided to biological parents.  Currently, only families who adopt children up to the age of two are eligible for the baby bonus. 


The current baby bonus largely discriminates against families adopting from overseas. In the 2005-2006 financial year, 118 children aged more than two years were adopted from overseas, effectively making the parents ineligible to receive financial assistance. 


This Bill amends the A New Tax System (Family Assistance) Act 1999, and builds upon existing provisions for adoptive parents to ensure that the baby bonus is available to all adoptive families. 




On 1 July 2008, the baby bonus will be increased to $5000 and will be indexed in line with the Consumer Price Index (CPI) in March and September.


Assuming CPI will change at a similar rate to which it has in the last six months (1.65% from June to December 2007) the baby bonus will increase to about $5083 in September 2008 and $5166 in March 2009.


We know that in 2005-06 there were a total of 125 ‘unknown child’ [1] adoptions where the child was aged two or older.


Assuming that there will be a similar number of ‘unknown child’ adoptions of children aged two and over in 2008-09, then the extra cost to government of extending the baby bonus to the adopting parents of these children will be approximately $636,000 .


This represents less than 0.05% of the estimated cost of the baby bonus in 2008-09 (of between $1.4 and $1.5 billion). [2]

To arrive at the final costing over 2008-09, the number of adoptions has been evenly spread over the year and costed as follows.

·          1 July to 19 Sept 2008 - 26 adoptions at $5000 each = $130,000

·          20 Sept 2008 to 19 March 2009 - 63 adoptions at $5083 each = $320,200

·          20 March to 30 June 2009 - 36 adoptions at $5166 each = $185,992

·          TOTAL for 2008-09 - 125 adoptions at $5000-$5166 = $636,000 (rounded)




Clause 1 - Short title


This clause provides for the Act, when it is enacted, to be cited as A New Tax System (Family Assistance) (Improved Access to Baby Bonus) Amendment Bill 2008.


Clause 2 - Commencement


This clause provides for the commencement of the Act on the day on which it receives the Royal Assent.


Clause 3 - Schedule(s)


This clause states that each Act that is specified within Schedule 1 is amended or repealed according to the terms set out within the Schedule.


Clause 4 - Object


This clause states that the purpose of this Bill is to ensure all adoptive parents are eligible for the baby bonus.


Clause 5 - Appropriation of funds


This clause ensures that any money payable under Paragraph 36 (5) (b) is to be paid only be moneys appropriated by the Parliament.


Schedule 1 - Amendment of A New Tax System (Family Assistance) Act 1999


1 Paragraph 36(5) (b) removes the age restriction currently in place for claiming the baby bonus.


2 Paragraph 36 (5) (ba) repeals the paragraph that stipulates that if a child arrives in Australia from overseas as part of the process for the adoption of the child - the child must be aged under 2 in order to claim the baby bonus thus, removing all age references.

[1] .       Unknown child adoptions are comprised of local and inter-country adoptions where the child was unknown to the adoptive parents prior to the adoption process. Source: AIHW Adoptions Australia 2005-06 data collection (unpublished data).

[2] .       Parliamentary Library estimate derived from the latest published data on the Maternity Payment/Baby Bonus in FaHCSIA, Portfolio Additional Estimates Statements 2007-08 and FaHCSIA, Annual Report 2006-07 .