Which families are losing their Family Tax Benefits?

jason-bryce-thumb

Expert Opinion Panel
Jason Bryce – Business & Finance Specialist

Which families are losing their Family Tax Benefits?

A number of changes to Family Tax Benefits this year means thousands of parents will eventually lose eligibility to payments worth thousands of dollars per year per child

By Jason Bryce | 05 May 2015


Close-up portrait of a surprised family having fun together lyin

In another major financial blow to families

Family Tax Benefits are being slashed from 1 July 2015

1.7 million Australian families currently get Family Tax Benefits but the government wants to cut the $20 billion annual price tag. Big changes coming into force on 1 July will reduce eligibility and payment rates for many families.

What are Family Tax Benefits?


There are two Family Tax Benefit payment types. Family Tax Benefit Part A was once called Child Endowment and is based on total family income. Family Tax Benefit Part B was introduced by the Howard government to support families with one working parent. Most single parents automatically get the maximum rate of Family Tax Benefit Part B which is currently set at $150.35 per family with a child under 5 years old per fortnight. For children aged between 5 years and 18 years old, Family Tax Benefit Part B is currently up to $105.00 per fortnight.

There is also an FTB Part B end-of-year supplement of up to $354.05 per family.

Most single parent families also get Family Tax Benefit Part A. FTB Part A is up to $230.02 per fortnight for children between the ages of 13 and 19 years. FTB Part A is up to $176.82 for children under 12 years of age.

There is also a Family Tax Benefit Part A end-of-year supplement of up to $726.35 for each child.

Changes coming into force on the 1 July 2015

will mean many families are no longer eligible for Family Tax Benefit,

or they will get a lot less money than before.

FTB Part B’s primary earner annual income limit is coming down from $150,000 to $100,000. Families with income over $100,000 will no longer get any FTB Part B from 1 July 2015.

Other changes that are currently held up in the senate will cut all families off FTB Part B when their child turns six. Changes to Family Tax Benefit Part B impact single parents in particular because this payment goes disproportionately to single income families.

And large families with relatively high incomes will also lose some or all of their Family Tax Benefit Part A.

The total household income test-free area for FTB Part A is currently $94,316. After this total household income level, payments reduce by 30 cents for every dollar earned until they reach zero.

Families around this income level will be receiving the base rate of FTB Part A (currently $56.70 per child per fortnight).

From 1 July, the government wants to cut Family Tax Benefit Part B completely when the youngest child turns six years old, but this change has not yet passed the senate.

Government ministers are now telling senators that this change must pass to fund more generous child care subsidies being proposed for this year’s Commonwealth budget.

Opposition spokesperson for families and payments Jenny Macklin

is now saying Labor will reconsider the FTB Part B proposal


Opposition spokesperson for families and payments Jenny Macklin is now saying Labor will reconsider the FTB Part B proposal in tandem with the new childcare package, according to a report in The Australian.

.

If this change is implemented, families currently receiving FTB Part B for children over the age of six will be grandfathered and continue to receive it until 1 July 2017.

Jenny Macklin says Labor is reconsidering their FTB stance
Jenny Macklin says Labor is reconsidering their FTB stance
Families with children under the age of six will lose their FTB Part B when their child turns six.

From 1 July 2015, the $94,316 income limit will apply to all families regardless of how many children they have. Previously the income test went up $3,796 for each child after the first child, so families with more than one child will lose money.

The Large Family Supplement is also being scaled back. The Large Family Supplement is $12.32 per fortnight and is currently paid for the third and subsequent children in large families. That will now be limited to the fourth and subsequent child.
Jason Bryce
Business & Finance Journalist


Have your say on this story –do you think the welfare reform proposals will improve on the current system?Make a comment below!

Stay in the Aussie single parent loop!


Don’t miss another Australian single parent article, news item, freebie, research / media call-out or offer!

Why not join our Australian Single Parent Facebook page, Twitter page or Australian Single Parent Mailing List?

Join now by clicking on an icon below!

facebook-pink-icon

twitter-pink-icon
mail-pink-icon
jason-bryce-thumb

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.

Jason’s personal website is www.centrelinknews.com.au

Keep up to date with the latest Centrelink news and information at Jason’s Facebook page: https://www.facebook.com/centrelinknews

Follow Jason on Twitter @JasonBryce

read Jason Bryce’s Profile here


Read more SingleMum.com.au exclusive Centrelink articles

Read more SingleMum.com.au exclusive Child Support articles


Disclaimer: The views of authors on our website are not necessarily representative of those views of our website. Articles contain only general information, correct at the date of publication. For advice regarding your own personal circumstances, always seek individual advice from a qualified professional. This article may not be reprinted, reproduced, or retransmitted in whole or in part without the express written consent of SingleMum.com.au. Please read the complete Singlemum.com.au Disclaimer here

Have your say – comment here!

Featured Articles