Baby Bonus
E & O E – PROOF ONLY
HILARY HARPER: Are you having a baby this year? And congratulations if you are. You’ll also be looking forward to the baby bonus, I imagine. That will be extremely helpful when picking out one of those enormous prams that people seem to push around these days. Things just seem to get more and more expensive.
Well, there are going to be some changes to the way it’s paid and who it will be paid to this year. Jenny Macklin is the federal Minister for Families, Housing, Community Services and Indigenous Affairs, and she joins us to help explain those changes. Good morning, Jenny Macklin.
JENNY MACKLIN: Good to be with you, Hilary.
HILARY HARPER: Thanks for joining us.
JENNY MACKLIN: Fine.
HILARY HARPER: How – why – how does the means test work that’s being introduced tomorrow?
JENNY MACKLIN: Look, the way it will work from tomorrow, is that if parents are having a new baby, they’ll be means tested on an annual income of anything up to $150,000. So, if you’ve got an annual income under that amount, you’ll continue to be eligible for the baby bonus. But the way the means test will work, it will only assess parents’ income in the six months following the birth, because we do recognise that, for many, many families, one parent – usually the mum – takes time off after the birth. So, the vast majority of families will still be eligible for the baby bonus.
We are also changing it to pay it in 13 fortnightly instalments of around $385. So that will replace the lump sum payment. We think that will help families meet their regular bills over the six months that the mother is usually at home.
HILARY HARPER: So if the means test is brought in at 150,000, is that the point that when – sorry, is that measured when the woman is on leave…
JENNY MACKLIN: Yeah, so…
HILARY HARPER: … after having had the baby?
JENNY MACKLIN: … it’s measured from the time the baby’s born, that’s exactly right. And so, what we have – what we’ll be doing is ask families to estimate what they expect their income to be in the six months following the birth of the baby. And if something untoward happens, and the mother or the father have to go back to work earlier than they expected, as long as people have honestly forecast what they expect to earn, then we won’t recover any debts.
Obviously, if people fraudulently say that they earn less than they really are intending to earn, then they’ll be treated in the normal way that we treat cases of fraud.
HILARY HARPER: So, how many families do you think will miss out under the new regime?
JENNY MACKLIN: We expect about 94 per cent of families to still be eligible for the baby bonus. So, the majority – the vast majority – will still be eligible.
HILARY HARPER: Now, as you say, the baby bonus is meant to help cover that expensive time when, if you’re not getting maternity leave or parental leave…
JENNY MACKLIN: Yes.
HILARY HARPER: … those expenses happen. Are people on higher incomes any more likely to get – more or less likely to get parental leave than people earning under the threshold?
JENNY MACKLIN: Well, it’s certainly the case that if you have a look at the figures, it’s women who are in the low paid areas who don’t get paid maternity leave. So, we certainly do want to make sure that they get this extra support.
It’s also recognising that people who have family incomes over 150,000 aren’t as needy as those on lower incomes. So it is a matter of targeting our social security system. We do that with other family tax benefits, and it’s bringing the baby bonus more into line with those sort of payments.
HILARY HARPER: Does the Government have any plans to phase in maternity leave over coming years?
JENNY MACKLIN: Well, as you’d know, we’ve asked the Productivity Commission to do a major inquiry into paid parental leave, and we’re expecting them to report back to us at the end of February.
So we’re certainly looking forward to getting those final recommendations from the Productivity Commission on paid parental leave.
HILARY HARPER: The – why was the decision made to pay the bonus in instalments instead of the lump sum? Is that to avoid the alleged plasma TV purchase?
JENNY MACKLIN: Well, I think they’re probably the minority. I don’t think most parents do spend their money on those sorts of things. Most parents spend the money either paying the regular bills that they need to pay and, of course, we know that with one parent usually out of the workforce, it’s harder to make ends meet. And so that’s why we thought it was more effective to pay it in fortnightly instalments to really mirror the way in which people are normally paid. It will help people meet their bills over the period of six months that one parent is normally off work.
HILARY HARPER: Do you think it removes some of the flexibility that the baby bonus introduced, that people were able to put a large amount on a mortgage or perhaps make a large purchase, like, put money towards a car that they might have needed as their family group?
JENNY MACKLIN: It’s really recognising that for the vast majority of families, there’s one parent out of work looking after a baby. And paying it in regular instalments really means that they’re going to be able to pay those bills that do come around every week or every fortnight in a way that otherwise they may not have been able to do.
HILARY HARPER: We just had a text message come in on 19 774 774. If you hit the $150k mark, are you ineligible or do you get a percentage of the bonus money?
JENNY MACKLIN: No. Once you get to $150,000 you won’t be eligible. So we’ve taken that as a pretty generous means test. Most of the other means tests are under that level. We think this is a generous means test, but once you hit that level, you will no longer be eligible for the baby bonus.
HILARY HARPER: If paid maternity leave was brought in, would the baby bonus then be phased out?
JENNY MACKLIN: Well, we really have to wait to see what the Productivity Commission recommends. They’ve given a draft report, but whether they continue with the same type of approach in their final recommendations, we’ve just got to wait and see.
I think we all recognise that it’s important to support parents when a new baby comes into the family, and the baby bonus has been important in that regard, and we’ll see what the Productivity Commission recommends.
HILARY HARPER: Is there any information on the effects on the birth rate since the baby bonus was introduced?
JENNY MACKLIN: What’s been interesting with the way the birth rates changed in Australia over the last little while is really, I don’t think, related to the baby bonus. It’s more seen that older women are having babies. So the increase in the fertility rate for the 30 to 35 year age group is now the fastest growing group, whereas previously it was well into the 20s.
So, I think that’s been the major change in the fertility pattern. I don’t think it’s related to the baby bonus.
HILARY HARPER: Yes, there’s certainly been a lot of anecdotal evidence in Melbourne over the last year about a baby boom that’s putting pressure on hospitals and other services.
JENNY MACKLIN: Yes. Yes, I’ve seen those, but I think it’s more to do with mothers in their 30s deciding to have babies.
HILARY HARPER: And who can blame them? Thanks very much for…
JENNY MACKLIN: I think they’re wonderful too.
HILARY HARPER: Yes [laughs]. It’ll be a good year for babies, I think.
JENNY MACKLIN: Happy new year.
HILARY HARPER: Thank you very much for that, Minister. Happy new year to you too.
Jenny Macklin, the federal Minister for Families, Housing, Community Services and Indigenous Affairs.