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

Parents are eligible for NBS for their child born on or after 1 March 2014 if:

• The child is under 1 year of age
• The customer is eligible for FTB Part A at a rate greater than nil (see Item 4) and
• They meet birth registration requirements, see Item 1 in Table 2
• Parental Leave Pay (PPL) has not been paid or claimed for the child

NBS is payable for up to 13 weeks (91 days) starting from the first day of eligibility. As a component of Family Tax Benefit (FTB) Part A, NBS eligibility is calculated daily. It is only paid for those days in the 13 weeks that all eligibility requirements are met.

NBU is automatically paid if the customer is eligible for NBS, with some exceptions, see Item 7. NBU is a separate payment and is not a component of FTB Part A.

Change of care

If one parent receives NBS and NBU for a child, the other parent who gains care of the child is entitled to NBS and NBU for the child for 91 days if:

• the parents of the child have not been partnered at any stage during that NBS and NBU period, and
• other eligibility criteria are met

For information on eligibility for NBS/NBU for a second or subsequent child, see Item 6.

A non-parent (for example, foster carer, grandparent) is eligible for NBS for a child if neither they (nor their partner) is the child's parent and:

• the child is under 1 year of age
• the customer is eligible for FTB Part A at a rate greater than nil (see Item 4) and
• the child remains their FTB child for 13 continuous weeks from the date the customer becomes eligible for NBS

Where a child has entered care as part of a surrogacy arrangement, the customer will be assessed for NBS based on the entrusted to care conditions.

NBS is payable for up to 13 weeks (91 days) starting from the first day of eligibility. As a component of FTB Part A, NBS eligibility is calculated daily. It is only paid for those days in the 13 weeks that all eligibility requirements are met.

If the length of the care arrangement is not known, the customer can elect for the NBS/NBU to be paid after the 13 continuous weeks of care. See Item 4 (Newborn Supplement Questionnaire (NBSQ/!NBSQ) page) in the Finalising the processing table.

NBU is automatically paid if the customer is eligible for NBS, with some exceptions, see Item 7. NBU is a separate payment and is not a component of FTB Part A.

For information on eligibility for NBS/NBU for a second or subsequent child, see Item 6.

A person is eligible for NBS if a child is entrusted to the customer's care as part of an adoption process on or after 1 March 2014 if:

• the child (of any FTB child age) has been entrusted to their care by an authorised party as part of an adoption process
• the customer is eligible for FTB Part A within 12 months of the date the child was entrusted to their care, and
• the customer is eligible for FTB Part A at a rate greater than nil, see Item 4

NBS is payable for up to 13 weeks (91 days) starting from the first day of eligibility. As a component of FTB Part A, NBS eligibility is calculated daily. It is only paid for those days in the 13 weeks that all eligibility requirements are met.

NBS is not payable for known adoption cases.

NBU is automatically paid if the customer is eligible for NBS, with some exceptions, see Item 7. NBU is a separate payment and is not a component of FTB.

For information on eligibility for NBS/NBU for a second or subsequent child, see Item 6.

As well as the specific NBS eligibility criteria, to be eligible for NBS for a child, customers must also:

• Meet FTB eligibility and claim requirements in relation to the child
• Be entitled to FTB Part A at a rate greater than nil (legislative rate of FTB Part A). Note: NBS is added to the customer's maximum FTB Part A rate before the Part A income test is applied. This means that for the period NBS is paid (up to 13 weeks) it increases the income limit at which their FTB Part A rate reduces to nil
• Not be paid Parental Leave Pay (PPL) for the same child

NBS is included as a component of a customer's maximum FTB Part A rate (Method 1) or FTB Part A base rate (Method 2). For more information, see Rate of FTB.

FTB Part A payment choice:

Customers who are only entitled to FTB Part A base rate or who choose to receive base rate will be paid the NBS with their FTB instalment. NBU will also be paid.

Customers who choose to receive nil rate FTB Part A during the year will receive their NBS and NBU when FTB reconciliation occurs after the end of the financial year.

If the customer changes or cancels their payment choice, payment of NBS/NBU depends on when their first day of NBS eligibility occurred.

See the Resources page for examples.

FTB instalment claims

Customers can make an FTB early claim up to 97 days before the child's expected date of birth or entrustment to care as part of an adoption process.

NBU will be paid as an immediate payment (with some exceptions, see Item 7) when the FTB claim has been assessed and eligibility to NBS confirmed. NBS will be included in the customer's FTB Part A instalment payments for up to 13 weeks (91 days).

For more information, see Claiming family assistance and Parental Leave Pay (PPL) for a newborn child if the customer requires a FA100 form.

There are 2 NBS rates. A higher rate is paid for the customer's first newborn child, the first child under 1 year of age 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 for each child of a multiple birth/entry into care. A lower rate is paid for a second or subsequent child.

See the Resources page for NBS maximum rate matrix.

Customers who choose nil rate FTB Part A during the financial year will receive their NBS and NBU when FTB reconciliation occurs.

See also:

Pre-processing checks for standalone and combined claims for family assistance and/or Paid Parental Leave payments

FTB lump sum claims

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.

See Processing FTB lump sum claims.

A reduced rate of NBS for second or subsequent children will apply.

Customers will receive the reduced rate of payment where the second or subsequent child has the same relationship type as previous children in the family. There are 3 relationship types considered when determining the rate:

• birth mother
• adoption
• entrusted into care

Birth parents of newborn children

Where a parent is claiming for their newborn child, the rate of NBS is based on whether the child is the birth mother's first or subsequent biological child. If the birth mother has had previous birth children, NBS will be paid at the reduced rate. A partner's child(ren) from a previous relationship would not impact the rate.

Adoptions

Where a child of any age (FTB eligible) is entrusted to the primary care of a person as part of the process of adoption, and the child is the second or subsequent child to be entrusted to the primary care of the family as part of an adoption process, the customer would receive the lower rate of NBS.

Child entrusted to care

Where a newborn child is entrusted to the primary care of another person (such as a foster carer) before the child is aged one, the rate paid would depend on the circumstances of the new carer, and whether other children aged under 1 had previously been entrusted to their care. Previously adopted or biological children would not impact the customer's NBS rate.

Multiple births/entry into care

Children born as part of a multiple birth (for example, twins) and children entrusted aged under 1 or children entering care as part of the same adoption process, will be paid at the higher NBS rate per child regardless of the number of other children in the family.

See the Resources page for the NBS/NBU maximum rate matrix and NBS maximum rate map for information on NBS rates.

If a customer is eligible for NBS, an 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

See the Resources page for examples.

These requirements only apply to the natural parents of a newborn child. They do not apply to children born overseas.

Parents must notify Services Australia that they have applied to register the child's birth with the state or territory births registry. Customers may notify this verbally.

If the customer notifies that the birth has been registered after the FTB claim has been finalised, in Customer First:

• go to the CHS screen and select the relevant child with an ‘S’
• type CCH in the next field
• on the CCH screen code 'Y'es in the birth registration field
• enter the source and the receipt date
• navigate to the AR screen and check the Payment Summary to ensure NBS/NBU is being paid and if the results are correct, the activity can be finalised

To receive NBS/NBU for a child who dies shortly after birth, parents are required to satisfy birth registration requirements.

Time limit for notification

Parents must notify the agency by 30 June of the financial year following the financial year that includes the last day on which the NBS can be paid for the child.

Example: for a child born on 1 May 2014 where the customer is eligible for NBS from that date, the last day NBS can be paid is 30 July 2014. As the last NBS day is in the 2014-15 financial year, the customer must notify by 30 June 2016.

The shared care percentage does not affect the NBS rate.

For example:

• If a shared care arrangement exists before the start of the NBS eligibility period, each person caring for the child may be eligible for the full amount of NBS and NBU if they each meet all eligibility criteria
• If a couple separate before the end of the NBS period and a shared care arrangement begins, each person may be entitled to NBS for the number of days remaining in the NBS period. The ex-partner would not be entitled to NBU as this was paid while they were a couple

See the Resources page for examples.

Eligibility is assessed according to each customer's circumstances. Customers must have at least 35% actual care of the child. See Assessment of shared care arrangements for FTB).

Note: a system issue has been identified that impacts a current FTB customer and any NBS/NBU already paid to them, if a separation is coded within the customer's now ex-partner's FTB new claim activity.

To avoid these issues, when Service Officers process claims that include shared care in respect of any potential NBS child, all coding to separate the current FTB customer must be finalised in a separate activity on the current FTB customer's record before the ex-partner's FTB claim can be assessed with all relevant shared care coding.

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.

A non-parent (for example, foster carer and grandparent) may be eligible for NBS for a child if neither they (nor their partner) is the child's parent. The questions on the NBSQ/!NBSQ page will vary depending on the customer/child relationship coded on the Child Relationships (CHRE/!CHRE) page.

For a non-parent:

• Is this child entrusted to care as part of a multiple entrustment to care event?
• Has this customer previously had a child entrusted to care?
• Has this child entered your, and/or your partner’s care as part of a surrogacy arrangement?
• Will you or did you have this child in your care for at least 13 consecutive weeks?
• Are you or your partner claiming or going to claim PPL?

Depending on the response to 'Will you or did you have this child in your care for at least 13 consecutive weeks?' the result will be:

• Yes, entitlement to NBS/NBU will be assessed as part of their claim
• No, NBU/NBS will not be paid. If the child does remain in care, the customer would need to contact to advise this so that the response could be updated from 'No' to 'Yes' to assess NBU/NBS
• Unsure, NBU/NBS will not be paid, instead an automatic Future Activity List (FAL) review (I703FY) will be set to recheck eligibility 21 days after the 13 continuous weeks (21 + 91 = 112 days) from the date the child entered care. If the child has remained in care when the review matures, NBU/NBS will be automatically assessed

If the customer indicates they or their partner intend to claim Parental Leave Paid (PPL) for this same child, NBS/NBU will not be paid with the claim for FTB. If PPL is not payable, the customer may be eligible for NBS/NBU.

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.

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.

Second or subsequent child dies

If a second or subsequent child dies on or after 1 January 2021 and 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 to 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

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 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.

In cases where an activity causes a Newborn Upfront Payment (NBU) debt as NBU eligibility is lost, for example FTB Part A cancelling, and a subsequent activity is paying arrears for NBU, the system will automatically offset these arrears with the debt. To allow the automated withholdings process to offset arrears, do not suppress the arrears and do not code the FTB Newborn Manual Assessment and Decision (FMAD) screen.

Withholdings will be automatically applied from the NBU payment to the outstanding amount of an existing NBU debt. This will not occur until the payment strip has been run.

This offsetting also occurs where multiple activities are processed in the one day, the first paying arrears of NBU and then a subsequent activity causing a loss of eligibility resulting in a debt. If these activities are on the same day, the offset will occur so that a payment is not issued and then subsequently raise a debt on the same day.

If a NBU debt has been paid in full and a reassessment is made to re-grant NBU, the system will pay this amount to the recipient, as the previous debt had been paid no offsetting will need to occur.

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

Top-ups

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.

Re-establishing entitlement

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

Debt offsetting will occur within the FTB reconciliation process in circumstances where arrears are payable in the next financial year.

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.