Expert Opinion Panel
Jason Bryce – Business & Finance Specialist
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10 government cuts that you didn’t know about
By Jason Bryce | 08 September 2016
We all know that the govt’s new Bill cuts the FTB
but here are 10 lesser-known cuts…
You have heard of Malcolm Turnbull’s Omnibus Savings Bill that cuts family tax benefits – but you probably haven’t heard about these ten other cutbacks to government spending that could hit your family’s finances hard.
But first, the good news – single mums have been spared from the axing of FTB Part B when the youngest child turns 13 – that applies to partnered families.
10 big cuts to families that you probably didn’t know about
Nothing is certain yet, the House of Representatives and the Senate have not yet had their say, but this what we know about how the Omnibus savings bill and other measures announced by the new government will hit single parents.
1. Family Tax Benefits squeezed even further
You probably heard that new applicants for Family Tax Benefit, Newstart and Disability Pension will lose their energy supplement worth $1.40 per child per fortnight. The good news is that Parenting Payment families miss this cut completely. The bad news is that there are other cuts for Family Tax Benefits …
2. The freeze on income thresholds
Thousands of working families will lose their Family Tax Benefits or have them reduced between now and 2020 because of a freeze on income thresholds.
3. Family Tax Benefit end-of-year supplements to be phased out
In 2016, Family Tax Benefit Part A end-of-year supplement is $726.35 per child for full rate FTB families. Family Tax Benefit Part B end-of-year supplement is currently up to $354.05 per family. These are balancing payments used to repay any debts you may incurred inadvertently by exceeding your income estimate.
Terese Edwards, CEO of the NCSMC
4. Newstart recipients lose the energy supplement
New applicants to Newstart will lose the energry supplement, worth about $4.40 per fortnight. That includes single parents moving to Newstart from Parenting Payment.
“Single mothers trying to raise children will struggle even more to survive if this cut goes ahead”, said Terese Edwards, CEO of the National Council for Single Mothers and their Children.
5. Single mums targeted by new Centrelink over-payments campaign
Single mothers are one of two main targets of a two billion crackdown on overpayments and fraud. Parenting Payment Single recipients who fail to tell Centrelink they have a partner are in focus.
6. When you get a job, your child’s Youth Allowance will be cut
Teenagers and students on Austudy or Youth Allowance will have their payments reassessed when their parent moves from a pension or benefit to employment, or increases their employment income.
7. No more free dental for kids, the Child Dental Benefits Schedule to be cut
Many parents may not be aware that they can get free dental care for their children. Families receiving Family Tax Benefit Part A can access $1,000 worth of free dental care for children aged up to 17 years old every two years under the Child Dental Benefits Schedule. The Omnibus Bill proposes that the CDBS will end on 31 December 2016 and some of the money saved be redirected to State dental hospitals for Commonwealth Health Care Card holders.
8. HECS/HELP Changes
If you have a higher education debt, proposed changes starting in 2018 will require a minimum repayment of 2 per cent p.a. when your income is $51,957 or more. That’s $20,000 less than current male average full time earnings of $71,000. Indexation of the income threshold to the CPI will ensure that more people are caught by the minimum repayment each year.
HECS/HELP benefit discount for paying up front will be scrapped and start-up scholarship payments will become loans to be added to HECS/HELP debts from 1 January 2017. Labor looks likely to agree to this.
9. Parental Leave pay is officially income
Parental Leave pay and Dad and Partner Leave pay will be included as income to assess your Family Tax Benefits and other entitlements.
10. Student Start Up Scholarships axed
The Student Start-Up scholarship is $1,025 paid in February and July. All students on Austudy and Youth Allowance, even if they just receive $1 per fortnight, now get this major bonus at the beginning of the new semester. That’s proposed to never happen again.
Business & Finance Journalist
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Jason is a business and finance journalist with 20 years experience, and is also a member of the SingleMum.com.au Expert Opinion Panel. He has a regular weekly column in the Sunday Mail (Brisbane) and writes regularly for the Business Daily section of the Herald Sun in Melbourne and many other newspapers and magazines. Read Jason Bryce’s full profile here
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