It’s that time of year again. The start of a new financial year is here and it’s time to get your affairs in order so you can complete your tax return. If your family received the Family Tax Benefit last financial year, there’s a few things you need to do come tax time to make sure you’re in the clear.
Here are a few EOFY hacks so you can get the most out of your Family Tax Benefit payments without getting caught out.
What is the Family Tax Benefit?
If you’ve made it this far, chances are you know what the Family Tax benefit is. But if not, it can be helpful to familiarise yourself with the Family Tax Benefit, or FTB for short, and understand whether or not your family is eligible to receive these payments.
The Family Tax Benefit (FTB) is a government payment that’s intended to help eligible families with the cost of raising children. This payment is split into two parts:
- Part A: which is a payment made per child that’s based on the family’s circumstances, and
- Part B: which is a payment made per family that provides extra support to single parents and some couple families with one primary income.
To receive the FTB, you must meet certain residency requirements as well as the following eligibility rules:
- Have a dependent child or a full-time secondary student aged 16 to 19 who isn’t getting a pension, payment or benefit like Youth Allowance,
- Care for the child for at least 35% of the time, and
- Meet an income test.
In addition to the FTB Part A or FTB Part B payment, you might also be eligible to receive their respective supplements. Both the FTB Part A supplement and the FTB Part B supplement are annual instalments that are paid at the end of the financial year once you’ve declared your family income.
Because the FTB payments depend on your family’s combined annual income, Centrelink will balance your payments at the end of each financial year to make sure you received the right amount.
EOFY hacks for Family Tax Benefit recipients
When the new financial year rolls around, it’s important to follow these tips to make sure you get the most out of your FTB payments.
Confirming your family’s combined income
Before your FTB payments can be balanced, you need to confirm your family’s combined income for the previous financial year.
For most families, the easiest way to confirm your income is to lodge your tax return. You’ll need to submit a tax return if:
- Your taxable income falls above the tax free threshold,
- You had tax withheld, even if your income is below the tax free threshold, or
- You had a child support assessment.
When lodging your tax return is essential to ensure you’ve accurately reported your family’s income for the financial year. This includes assessing both taxable and nontaxable income sources.
Once the Australian Taxation Office (ATO) has processed your tax return, they will share your income with Centrelink. This figure will then be used to balance your payment.
In some instances, your family might not be required to lodge a tax return. If this is the case for your family, you’ll need to let Centrelink know that you don’t need to lodge a tax return before they can balance your FTB payments. You can do this through your Centrelink online account through myGov or via the Express Plus Centrelink mobile app.
Balancing your Family Tax Benefit payments
If you receive the FTB, you might have provided Centrelink with an estimate of your family’s annual income, which is used to calculate your payments. At the end of the financial year, Centrelink compares the estimate you provided with your actual income and other relevant circumstances to check that you received the right amount of assistance. This is what’s known as the balancing process.
Once your payment has been balanced, you’ll receive a letter notifying you of the outcome, which will be one of the following:
- A top up including supplements, where Centrelink owes you money,
- An outstanding debt, where you may need to pay money back to Centrelink, or
- No change, where you received the right amount of FTB.
Don’t miss the deadline
As a parent, it’s often easy to lose track of important dates, so be sure to set yourself a calendar reminder to confirm your combined family income before the deadline. You have 12 months from the end of the financial year to confirm your family income for the FTB. This means you have until June 30, 2024 to:
- Confirm your family income for the 2022-23 financial year, or
- Claim FTB as a lump sum for the 2022-23 financial year if you didn’t receive any FTB payments during that financial year.
If you miss this deadline, you risk missing out on your FTB payments. Even if the ATO extends the lodgement date for you or your partner’s tax return, you still have to confirm your family income with Centrelink by June 30, 2024 so you FTB can be balanced. If you don’t confirm your family’s income by the deadline, you’ll be issued with a FTB account payable notice and you’ll be required to pay back the full amount of FTB that you received during the past financial year.
Check if you’re eligible for any supplements
Once you’ve submitted your family’s income and your FTB payments have been balanced, Centrelink will check whether you’re eligible for any top ups or supplements.
If you’re eligible, you might receive the following payments:
- FTB Part A supplement of up to $817.60 for each eligible child,
- FTB Part B supplement of up to $397.85 per family, or
- Single Income Family supplement of up to $300 per family.
The amount of FTB Part A or FTB Part B supplement you’re paid depends on a number of factors, like:
- How many children you have in your care,
- If you share care,
- Your family’s combined income, and
- The number of days you were eligible for FTB Part A or FTB Part B.
The amount of Single Income Family supplement you might receive also depends on your household income and how many days you were caring for an eligible child.
Don’t confuse the FTB with the Child Care Subsidy
Although the FTB and the Child Care Subsidy (CCS) are both paid through Centrelink to help families with the cost of their children, they’re two different payments. Because of this, these two payments are balanced separately so it’s important to make sure you provide the right information at the end of the financial year.
Centrelink will start balancing the CCS for the 2022-23 financial year from mid-August once they receive both of the following:
- All attendance information from your child care service, and
- Confirmation of your family’s combined income.
Consult the tax time tool
Not sure where to start when it comes to wrapping things up for the previous financial year? Chances are you’re not alone. The end of a financial year can be a confusing time for many people, which is why Services Australia put together their what families need to do at tax time tool to help you out when the end of the financial year rolls around. You can use this tool to figure out what you need to do if you received the FTB, CCS or had a child support assessment in 2022-23.
For more information on balancing FTB or CCS payments at the end of this financial year, head to the Services Australia website.