A time-based policy is an in-school custom policy that is applied to OUs for a specific period of time. As such you can either create a new custom policy or convert an existing in-school policy into a time-based policy.

Time-based policies on DNS and SmartPac behave almost the same as for Chrome Extension, with a few exceptions:

If a time-based policy comes into effect during a browsing session, the pages will not be re-brokered or refreshed to get the new time-based policy automatically. The user will continue to be filtered as per the previous policy until such time that the user refreshes the page, opens a new tab/page or the 30-minute cookie expires, and the page is brokered again.
Cookie TTL is valid at the browser level, which means Google opened in a new tab will fetch the cookie TTL from the existing open Google tab.
If a student is browsing Facebook or Twitter and the time-based policy comes into effect, intermittent policy switching will not happen. The student will continue to get the older policy while browsing Facebook and Twitter.
Following from the above point, if a student is browsing Facebook or Twitter while a time-based policy is being applied, and that ends and OU policy begins, the student will continue to be filtered as per the time-based policy for Facebook and Twitter.
Similarly, for YouTube, if a time-based policy begins while the user is browsing YouTube, the time-based policy will not be applied.
If a video is added to the time-based policy deny list and YouTube is accessed after the start time, then the video will be blocked.
Keyword scanning will not work if the policy changes (i.e from an OU policy to a time-based policy) in the middle of the session for Youtube even if those are opened in a new tab.

What to expect when using time-based policies with DNS & SmartPac