The Best Start tax credit (BSTC) is a new component of Working for Families Tax Credits (WIFTC). It is a payment to help families with the costs in a child’s first three years. It is available for all qualifying families with children due or born on or after 1 July 2018.

The BSTC replaces the Parental Tax Credit (PTC). If a child is born before 1 July 2018 but had an expected due date after this, a person qualifies for BSTC. However, if a person also qualifies for PTC, they need to choose which payment is best for their family — they cannot receive both.

A person cannot get BSTC and paid parental leave (PPL) for the same child, at the same time. The BSTC will start once the PPL has finished.

Paid parental leave is extending from 18 weeks to 22 weeks from 1 July 2018 for babies born or expected to be born on or after 1 July 2018. This also means the number of keeping-in-touch hours has increased from 40 hours to 52 hours, Keeping-in-touch hours allow an employee who is on parental leave to stay connected with their employer and perform work from time to time, such as attending a team day.

A person can also get BSTC while they receive any of the following for children in their care:

• Orphan’s Benefit

• Unsupported Child’s Benefit, or

• Foster care allowance.

The amount of BSTC is up to $60 a week ($3,120 a year) per child for babies born on or after 1 July 2018. All eligible families will receive this payment until the child turns one, regardless of their household income. Households whose income is less than $79,000 will continue to receive $60 per week until the child turns three. Those earning above $79,000 may continue to receive payments at a reduced amount. The upper threshold is $93,858 (for one child) when payments stop.

Regulations for the Best Start tax credit

The Social Security (Income and Cash Assets Exemptions) Amendment Regulations (No 2) 2018 (LI 2018/109) came into force on 3 July 2018. The regulations amend the Social Security (Income and Cash Assets Exemptions) Regulations 2011 by inserting a new Part 15 — Best Start tax credit arrears payments.

New Part 15 relates to a lump sum payment of arrears of Best Start tax credit made, on or after 3 July 2018, to a person entitled to the credit for an entitlement period for a dependent child if (and only if):

• the entitlement period ends before 1 July 2018

• the dependent child is born before 1 July 2018, but the expected due date for the child is on or after 1 July 2018.

New Part 15 ensures that, for the first 12 months after the lump sum payment is made:

• any income derived from the payment is not income for the purposes of the Social Security Act 1964

• the payment, and any income derived from the payment, is not cash assets for the purposes of the Social Security Act (for example, the definitions, for the purposes of accommodation supplement and home-based disability support services, in ss 61E(1) and 69FA(1) of the Act).