The 'baby bonus' is the brainchild of a young priest, the aptly-named Stefano Bimbi.
Father Bimbi, meaning children in English, wrote on the parish website that the money would give “concrete support during difficult economic times to families with the courage to accept the gift of a child.”
The town of Staggia, Siena, has just over 2,000 inhabitants and the popular initiative is an interesting way of incentivizing residents to have larger families.
“The parish economic board voted unanimously in favour of the initiative,” Ansa reported Father Bimbi as saying.
“We don't have a huge amount of money but the 'baby bonus' will continue until funds run out,” he added.
To qualify for the baby bonus couples must already have at least two children, have been married in a church, be residents of Staggia and perhaps, controversially, they must be Italian.
But Father Bimbi hopes to extend the offer to non-Italian families soon.
“If we can get the money we would like to offer the bonus to foreign families too. I really hope it will be possible.”
Should parents qualify for the baby bonus, it will be given to them on the day of their child's baptism. Since the start of the year, four families have already been granted the cash.
This is just one of the many unusual ways small Italian towns are trying to cope with ageing populations and low birth rates. Last week, one Italian mayor banned his citizens from getting sick in a bid to get them to keep a closer eye on their health.