Time to read : 5 Minutes

When the Federal budget was handed down in May, a lot of changes were made to existing federal assistance programs. Here, we look at the all-important Family Tax Benefit, which offers essential assistance to parents facing sudden, alarming price hikes on everything from bread and cheese, to healthcare and home loans.

Key points:

• The FTB program is federal, and aims to ease financial pressures for families with children.

• Eligibility for this program includes your age and education levels, as well as your immigration and residency status, and that of your children - among other requirements.

• This initiative offers significant financial aid in two formats, depending on family dynamics.

• The Centrelink online platform simplifies the application process.

• Calculated benefits based on reporting of personal income and changes ensure accurate payment to help with household costs and debt.

Okay, so what is the FTB?

There are two parts to the FTB: 

• Family Tax Benefit A.

• Family Tax Benefit B. 

FTB Part A:

Part A is the financial assistance offered to your family per child. You receive up to $191.54 per fortnight, per child, based on your income, family size, and your childrens’ age/s.

FTB Part B:

This is an added incentive for single parents and single income families, offering up to $158.34 per fortnight to supplement these one-income households.

Are you eligible?

This is is subject to several conditions. You must be responsible for the financial care of one or more children under 20 years old, and you can’t be a recipient of any other governmental assistance payments (such as Parental Leave Pay).

To qualify for FTB A, you must be a carer for a dependent child who’s either:

• 0 to 15 years of age

• 16 to 19 years of age and currently undertaking some form of study.

There’s also an income test and residency rules. The child or student must be in your care at least 35% of the time.

To qualify for the FTB Part A, your taxable income must be $80,000 per year or less. To qualify for the FTB Part B payment, you must:

• be a member of a household with one main income earner, and have care of a dependent child aged under 13, or:

• be a single parent, or a grandparent carer, and have care for a dependent child aged under 18.

• The child must also meet study requirements if they’re aged between 16 and 18 years old, satisfy residency rules, and you must care for the child at least 35% of the time.

How can you apply?

The application process is detailed on the MyGov website, and you’ll find a list of required documentation there. These include:

• your tax file number

• banking details

• residence, income, and relationship documents.

What changed this year?

From 10 July 2023, if your family earns under $530,000 and you have kids needing daycare places, you may be eligible for an increase in your Child Care Subsidy (CCS).

The income limit to get the maximum CCS increased from July, as did the percent you can get. Families earning up to $80,000 are able to have up to 90% of their child care costs subsidised. If you earn over $80,000, you may still be eligible for a subsidy starting from 90%. Your CCS decreases by 1% for each $5,000 of income your household earns. 

What does this mean for my household?

If you currently have kids in daycare, and this is likely to continue into 2024, you’ll either get more subsidy, or have no change to your subsidy. If you’ve got more than one child aged 5 or under, you’re still eligible for the 90% CCS for one or more of your children. 

There’s also been an increase to the Additional Child Care Subsidy Transition to Work Low Income Limit, which sits at $80,000 since July. If you’re planning to return to work soon, after taking paid parental leave, this is something to celebrate. 

Speaking of which, there were a few other updates for families you might have missed:

Changes to the Paid Parental Leave scheme:

The Paid Parental Leave scheme has also changed since July 2023, and if you’re expecting a new family member, you’ll want to be financially ready. 

Pre-July 2023:

If your child began child care before 1 July 2023, your family will be assessed under the old rules. This means your family might still be eligible for up to 18 weeks of Parental Leave Pay and up to 2 weeks of Dad and Partner Pay - regardless of when you choose to start your parental leave payment.

Post-July 2023:

If your child’s birth or child care journey begins on or after 1 July 2023, your Parental Leave Pay and Dad and Partner Pay are combined into one payment. The leave period increases from 90 days, or up to 18 weeks based on a 5 day work week, to 100 days or 20 weeks. 

The income test and work requirements for Parental Leave Pay also changed from July 2023. Part of the Parental Leave Pay days will now be shared with your partner or other carer.

The birth mother, or first adoptive parent to claim, must approve the sharing of any Parental Leave Pay days with the child’s other parent.If you’re sharing your Parental Leave Pay days with someone else, you can take up to 10 days at the same time.

IMPORTANT NOTE: Single parents are able to get the full amount of Parental Leave Pay.

The Bottom Line:

The Family Tax Benefit program is designed to provide financial assistance to families bearing the cost of raising children. Understanding your eligibility can help you maximise any benefits received.

Individual scenarios differ and should always be discussed with your financial professionals - especially as the recent changes may affect your tax status.

Financial disclaimer: The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.