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Family Tax Benefit PART A and PART B

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Family Tax Benefit PART A and PART B

 

Changes as a result of the 2014 Budget
Significant changes to Family Tax Benefit Part A and Part B were announced in the 2014/2015 Budget. While many of these changes won't take effect for another two years it is worthwhile reading about them now so you are prepared for the changes when they do take place.

Click here to read more.

The Australian government offers certain payments through the Department of Human Services to help families with their work and family responsibilities. These payments include Child Care Benefit, the Child Care Rebate and the Family Tax Benefit.

What is the Family Tax Benefit?
There are two types of family tax benefit - Part A and Part B.

Family Tax Benefit Part A is paid for each child. The payment is income tested. The amount you receive is based on your family's individual circumstances.

You may be eligible for Family Tax Benefit Part A if you have:

  • a dependent child or student aged up to 22 years and
  • care of the child for at least 35 per cent of the time

Family Tax Benefit Part B gives extra help to single parents and families with one main income. An example of this may be where one parent stays at home to care for a child full time or balances some paid work with caring for a child. This payment is income tested.

You may be eligible for Family Tax Benefit Part B if you have:

  • a dependent child or student, up to the end of the calendar year in which he or she turns 18 years of age and
  • care of the child for at least 35 per cent of the time.

Who is eligible for Family Tax Benefit Part A and B?

You may be eligible for Family Tax Benefit Part A if you have:

  • a dependent child under 16 years of age
  • a dependent child 16-20 years of age who:
    • has completed a Year 12 or equivalent qualification
    • is undertaking full-time education or training in an approved course leading to a Year 12 or equivalent qualification
    • has an acceptable study load or
    • has been granted an exemption from this requirement
    or
  • a dependent full-time student 21-24 years of age.

You will also need:

  • to have care of the child for at least 35 per cent of the time and
  • to satisfy the income test.

Please note you may not be eligible for Family Tax Benefit Part A if your child earns $13755 or more during the financial year and is:

  • aged 5-15 and not studying full time
  • aged 16-19 and not in full time secondary study or exempt from this requirement
  • over 19 years old.

You may be eligible for Family Tax Benefit Part B if you have:

  • a dependent child under 16 years of age, or
  • a dependent full-time secondary student up until the end of the calendar year in whch they turn 18, and
  • care of the child for at least 35 per cent of the time.

The rate of Family Tax Benefit Part B is based on an income test.

You and your partner cannot receive Family Tax Benefit Part B during a Paid Parental Leave Period, but it may be paid after the Paid Parental Leave period ends.

If you are a parent, guardian, foster carer, grandparent, or other carer, you may be eligible for Family Tax Benefit Part B.

How much Family Tax Benefit Part A can I receive?
Family Tax Benefit Part A is based on your family's annual income over the full financial year (ie from 1 July to 30 June) and the number of children you have as well as their ages.

This payment is either made fortnightly or through the tax system as a lump sum payment at the end of the financial year. You could also receive the payment as a reduced tax liability by asking your employer to reduce the amount withheld from wages paid to you or your partner.

The amount of Family Tax Benefit Part A you receive depends on your actual family income, how many children you have, and how old they are.

The maximum amounts of Family Tax Benefit Part A you can receive per child are updated on 1 July each year.

Current rates are as below:
For each child

Per fortnight

0 to 12 years$169.68
13-15 years$220.64
16-19 years$220.64
16 - 17 years (completed secondary study)$54.32
18 - 21 years (completed secondary study)$72.80

 

The base rates of Family Tax Benefit Part A are currently
For each childPer fortnight
Under 18 yrs$54.32
18 - 19 years secondary student$54.32
18 - 21 years$72.80

Family Tax Benefit Part A Supplement
You may also receive the Family Tax Benefit Part A Supplement of up to $726.35 per child at the end of the financial year. To receive this you need to lodge your tax return or advise the ATO that you are not required to file a tax return within the required timeframe. Once the ATO has confirmed your income details you will receive a letter to tell you whether you are eligible and how much supplement you will receive.

To meet the immunisation requirements for the Family Tax Benefit Part A Supplement you now need to have your children immunised during the financial years that each child turns one, two and five years old.

Children need to be up-to-date with immunisation or have an approved exemption. Most of the immunisations on the National Immunisation Program Schedule are linked to family assistance payments.

Click here to see the list of diseases a child must be immunised against in order to be eligible for Family Tax Benefit Part A Supplement.

Additional payments include:

  • The large family supplement of $11.76 per fortnight for your third and subsequent children.
  • The multiple birth allowance of $140.84 per fortnight for triplets or $187.80 for quads for whom you already receive te Family Tax Benefit Part A Supplement.

Income Test
As mentioned above you have to pass the income test in order to receive Family Tax Benefit Part A. Currently if less than $47 815 your payment won't be affected, but if you earn more than that this financial year your payment reduces by 20 cents for each dollar above $47 815 until it reaches the base rate of Family Tax Benefit Part A.

Your Family Tax Benefit Part A will stay at that rate until your family's income reaches $94 316 a year (plus $3796 for each Family Tax Benefit child after the first). Family Tax Benefit Part A will reduce by 30 cents for every dollar over that amount until your payment reaches nil.

If your family income is close to the limit cut-off, you should check your eligibility after the end of the financial year, once your actual income is known to make sure you aren't over paid.

How much Family Tax Benefit Part B can I receive?
Family Tax Benefit Part B gives extra assistance to single parent families and to two-parent families with one main income, where one parent chooses to stay at home or balance some paid work with caring for their children.

Family Tax Benefit Part B is based on the income of the lower earner (eg in a couple this would be the stay-at-home parent or the person working part-time) and the age of the youngest child.

Family Tax Benefit Part B rates are updated on 1 July each year, the maximum amount you can currently receive per family is shown in the table below:

Age of youngest childPer fortnight
0 - 5 years$128.80
5 - 18 years$89.74

Family Tax Benefit Part B Supplement
You may receive a supplement of up to $354.05 per family at the end of the financial year if you submit your tax return within the required timeframe or inform the ATO you do not need to lodge a return. The amount of supplement you receive may vary according to your family's income or circumstances.

Income Test
This income test for Family Tax Benefit Part B is updated on 1 July each year.

Family Tax Benefit Part B is for families (single parent or couple) in which the primary earner has an adjusted taxable income of $150 000 or less per year.

If you are a single-parent family with an annual adjusted taxable income of more than $150 000, you will not be eligible for Family Tax Benefit Part B. If your income is at or below this limit you will continue to get the maximum rate of Family Tax Benefit Part B.

If you are a two-parent family in which your primary earner has an annual adjusted taxable income of more than $150 000, you will not be eligible for Family Tax Benefit Part B. This is regardless of the lower income of the other parent.

If the primary earner's income is at or below this limit, Family Tax Benefit Part B will be assessed on the basis of the second earner's income. Secondary earners can earn up to $5037 each year before it affects the rate of Family Tax Benefit Part B.

Payments are reduced by 20 cents for each dollar of income earned over $5037.

If you are the secondary earner and your partner earns $150 000 or less, you can still get some Family Tax Benefit Part B if your income is below:

  • $25 623 a year, if your youngest child is under five years of age, or
  • $19 929 a year, if your youngest child is 5-18 years of age.

You and your partner cannot receive Family Tax Benefit Part B during a Paid Parental Leave period, but it may be paid after the Paid Parental Leave period ends.

More information about Family Tax Benefit
For more information call 13 6150 or visit the Department of Human Services website.

 

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