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.

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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.