Family tax benefits A & B

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Payments and eligibility | Get an advance to meet expenses | Who gets part B?

One basic benefit that many parents can access to help make ends meet is the family tax benefit. If you have one or more dependent children, you can probably get the benefit to help with the cost of raising children – if you don't earn too much.

This benefit used to be administered by the Tax Office, but has now been shifted to the Family Assistance Office. This was set up to help people get easier access to their entitlements by accessing all their payments from just one place. The entitlements and other details of the family tax benefit remain the same.

Payments and eligibility
The amounts available cover a wide range – from $50 to more than $200 a fortnight – depending on your income, but it is also influenced by the number of children you have. See the Family Assistance Office for payment specifics.

Family tax benefit (FTB) is divided into two parts – part A and part B (more on part B below) – and is either paid fortnightly or as a lump sum at the end of the financial year. The general available rate (for part A) is:

• $169.68 per fortnight for a child under 13
• $220.64 for a child aged 13 to 15
• $54.32 aged 16 to 17
• $72.80 from 18 to 21.

For part A, after income (that is, annual family income) reaches $94,316 (plus $3,796 for each child after the first), payments will reduce by 30 cents in the dollar until they reach zero.

The benefit cuts out once your children are older than 21 years as young people aged 22 and over are considered independent. And the threshold has been frozen (that is, will not be indexed) until July 1, 2014.

Part A is the more common, and is paid per child based on 'actual annual family income' for the financial year. Part B gives extra assistance to sole parents and families with one main income source, but that income is limited to $150,000 a year. You could view part A as being paid per child, and part B as being paid per family.

Actual annual family income, by the way, is you and your partner's combined taxable income (that is, assessable income less eligible deductions) plus certain amounts which don't go into taxable income, being:

• reportable fringe benefits received
• reportable superannuation contributions
• net losses from rental property or investments
• tax-free pensions or benefits received
• foreign income that is not taxable in Australia, and
• minus any child support you or your partner pay.

You can get both parts, or one or the other, depending where your circumstances place you. The basic eligibility is that you are an Australian resident and that you have at least one dependent child aged (for part A) up to 21 and (for part B) aged up to 15 or to age 18 for a student. Part A is also available to guardians who have children under their full-time care.

A new eligibility rule was introduced effective from July 1, 2010 for part A. Young people aged 16-20 will need to be in full time study in an approved course of education or training in order for you to continue receiving the benefit for that child. The young person's study must assist or allow them to complete a Year 12 certificate or equivalent qualification. And with the 2011 Budget came the news that the government will match the rate for 16 to 19 year olds with that for 13 to 15 year olds.

This participation requirement has applied to new recipients since January 1, 2010, and either the Family Assistance Office or Centrelink should be able to give advice.

Get an advance to meet expenses
Changes stemming from the 2011-12 Federal Budget opened the way for families to get an advance payment of up to 7.5%, up to a maximum of $1,030.75 for the 2012-13 financial year, of their annual FTB Part A entitlement, at any time throughout the year. The minimum amount for a one-off advance is 3.75% of the standard rate for one child under 13 years. This is also the amount for a regular advance.

Note also that families can continue to apply for an advance of around $160 paid every six months and repaid through reductions in entitlements. Enquire at the Family Assistance Office.

There are also 'shared care' rules to cover children whose parents are divided between two households. The family tax benefit is divided on a percentage of nights spent in someone's care. The minimum to get any benefit is having a child spend 35% of their time with you, and you qualify for the full benefit after time spent reaches 65%.

And if you receive child support by reason of, say, a divorce settlement, this too could affect how much you are entitled to.

Who gets part B?
The family tax benefit part B is paid to sole parents or couples who have one main income and where one parent stays at home or balances some paid work with caring for the children. The rate for part B is $144.34 for a child under five, and $100.66 from five to age 15 (or 16 to 18 if a student).

Sole parents earning less than $150,000 can get part B (this income level is not indexed). For couples the primary earner's income has to be less than $150,000, and the lower earner's income can go up to $5,037 before it starts to reduce the part B benefit (by 20 cents per dollar over this figure).

Note that the 2011 Federal Budget extended an already existing freeze on indexing the income limit to July 1, 2014.

There is also a boost in place to the base annual rate of part B, called a 'supplement' by the Family Assistance Office, of $354.05 a year which is paid after your income tax is lodged. This is also frozen (not indexed) as per above.

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

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

Last reviewed 30/07/2012

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