Eligibility for Newborn Supplement (NBS) and Newborn Upfront Payment (NBU) 007-07040020

Customers have their eligibility for NBS and NBU assessed automatically when they claim FTB for a child born or entrusted to care as part of an adoption process. NBS/NBU can be paid with an FTB instalment or lump sum claim.

If a customer is eligible for NBS, NBU will be automatically paid in most cases. NBU is a separate payment to NBS and is not part of FTB Part A.

Customers must be eligible for FTB Part A at a rate greater than nil and not have received Parental Leave Pay (PPL) for the same child. Note: as NBS is included in a customer's maximum Family Tax Benefit (FTB) Part A rate, a higher income limit applies during the NBS payment period.

Extra criteria depend on the customer/child relationship:

• Parents of a child:
• child is under 1 year of age (on the first day of FTB eligibility for the child)
• birth registration requirements are met
• Child entrusted to care of non-parent, for example, foster care:
• child is under 1 year of age (on the first day of FTB eligibility for the child)
• child remains their Family Tax benefit (FTB) child for 13 continuous weeks from date they become eligible for NBS
• Child entrusted to care as part of an adoption process:
• child (of any FTB child age) has been entrusted to care by an authorised party as part of an adoption process
• eligible for FTB Part A within 12 months of the date the child was entrusted to their care

An Approved Care Organisation (ACO) is not eligible for NBS or NBU.

NBS eligibility is calculated daily. It is payable for up to 13 weeks (91 days) from the first date of eligibility. It will only be paid for days in the 13 weeks that all eligibility requirements are met.

There are 2 NBS rates.

A higher rate is paid for:

• the customer's first newborn child
• the first child entrusted to their or their partner's care
• the first child entrusted to their or their partner's care as part of an adoption process, and
• each child of a multiple birth/entry into care

A lower rate is paid for a second or subsequent child. If a second or subsequent child dies before their first birthday, a top-up of NBS may be paid. The top-up is the difference between the lower and higher rate.

The NBS rate can be reduced if the customer's adjusted taxable income (ATI) is above the Part A higher income free area and is subject to the Method 2 income test.

NBS is subject to indexation on 1 July. For the current rate, see Rates and Thresholds.

If a customer is eligible for NBS, NBU is payable in relation to the first day of NBS eligibility.

Exceptions

NBU is not payable to a customer if:

• They have already been paid NBU for the child
• They were partnered to a person who was paid NBU for the child
• Their current partner was partnered to a third person who was paid NBU for the child
• They or their current partner have received Parental Leave Pay (PPL) for the child (they would not be eligible for NBS for the child)
• The child is Regular Care Child of the customer (they would not be eligible for FTB or NBU/NBS for the child), or
• They are an Approved Care Organisation (ACO). ACOs are not eligible for NBU/NBS

However, NBU can be paid to more than one customer for the same child. For example, for shared care or change of care. The payment is a separate payment from NBS and is not a component of Family Tax Benefit (FTB).

NBU is subject to indexation on 1 July. For the current rate, see Rates and Thresholds.

NBU and NBS are not payable if the customer has had their FTB payments precluded or cancelled under these measures:

Non-payment of FTB due to zero entitlement for previous years.

Customers can test their eligibility to payment via an FTB lump sum claim or may request an exemption of their preclusion due to a new FTB child entering care.

Prohibition of FTB instalments (PIP) due to non-lodgement of tax returns.

Customers can test their eligibility to payment via an FTB lump sum claim or a deferral of PIP may be considered.

NBS will cease to be paid from the date of the customer's death as per FTB processing.

An appropriate person may claim the family assistance entitlement of the deceased customer that has not been paid.

If a FTB child dies and the customer was receiving NBS for the child, payment will continue to be paid to the end of the determined NBS period. It will be paid in line with how the customer chooses to receive their FTB bereavement payment.

If a second or subsequent child dies before their first birthday, a top-up of NBS may be paid. The top-up is the difference between the lower and higher rate.

• The child must be in the care of the customer as at the date of death to be eligible for the NBS top-up
• If the NBS period has finished, the top-up will be calculated based on:
• the number of days NBS was paid, and
• the circumstances of the customer/child at the time. E.g. shared care percentage
• If the child dies within the NBS period:
• the NBS higher rate will be paid for the days already paid at the lower rate, and
• the remaining days in the NBS period with the FTB bereavement payment

If a child’s death is advised as part of a FTB claim and the lower NBS rate has not previously been paid for the child, the higher rate of NBS will be paid for the eligible NBS period.

NBS is subject to the same portability rules as base rate FTB Part A for periods the customer and/or child are outside Australia.

See Family Tax Benefit (FTB), Child Care Subsidy (CCS) and Paid Parental Leave scheme customer/child going overseas.

Each member of a blended family couple is paid NBS/NBU based on the blended family percentage applied during the NBS payment period.

See Blended families and FTB.

NBS and NBU will be paid when the customer's claim is finalised, once actual income details have been received from the Australian Taxation Office or not required to lodge advice has been notified and accepted.

If NBS is to be included in the reconciliation result (top-up), the NBU will be paid first and a separate letter will be sent to the customer.

NBS and NBU can be affected by FTB reconciliation.

As NBS is an FTB Part A rate component add-on, it is added into a family's maximum and base rate of FTB Part A and is subject to reconciliation.

Depending on the customer's circumstances (for example, rate of FTB Part A), the amount of NBS payable may be reduced or increased due to income and maintenance income tests.

The NBU is a one off payment and is not included in the FTB rate calculation.

If a customer is found not to be entitled to FTB Part A, or entitled to a reduced base rate as a result of FTB reconciliation, an NBS and/or NBU debt may arise. The NBU will be raised as a separate qualification debt where there is no NBS entitlement due to nil entitlement to FTB Part A.

For example:

• If the customer's reconciliation has resulted in no entitlement to FTB Part A for a period where the NBU and NBS were paid, there will be a resultant debt for both NBU and NBS
• If the customer's reconciliation has resulted in a lower FTB Part A base rate for a period where NBS was paid, there will be a resultant debt of NBS

A customer may be eligible for a top-up of NBS where they were previously receiving a tapered base rate of FTB Part A and reconciliation has resulted in an increased entitlement.

If a customer is assessed as an FTB potential non lodger and has received NBS/NBU, any NBS paid in that financial year will be included in the non-lodger debt:

• Eligibility for NBU received in that financial year will be lost
• A letter will be sent in July advising the customer their FTB for that financial year has been cancelled due to being assessed as a potential non lodger, and
• The NBU will be raised as a separate debt

Entitlement to NBS and NBU will not be reassessed until the non-lodger status is resolved.

See the Resources page for examples.

Where a customer is found not to be eligible for FTB Part A in a financial year and has the NBU and NBS raised as a debt, if entitlement to FTB Part A is established again for a later period within the same year or in the subsequent year, the NBU and NBS may be paid to the customer again where all other eligibility criteria are met.

See the Resources page for examples.

Debt offsetting will occur within the FTB reconciliation process in circumstances where arrears are payable in the next financial year. See Debt offsetting during family assistance reassessment, reconciliation and claim processing.

NBS can be used for Centrepay deductions as per the existing conditions for FTB payments.

NBU can be used for a one-off Centrepay deduction, only.