Family Tax Benefits Changes that might affect you
There have been some changes to Family Tax Benefits that might affect you and your family. These include:
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Restriction on the availability of Family Tax Benefit Part B for couple families
From 1 July 2016, Family Tax Benefit Part B will not be available for ‘couple families’ (other than grandparents and great-grandparents) with a youngest child aged 13 or over.
Single parents, grandparents and great-grandparents caring for a youngest child aged 13 to 18 will continue to have access to Family Tax Benefit Part B (subject to satisfying other relevant requirements).
These measures have now become law and was introduced by the Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill 2015 on 21 October 2015.
2. Family Tax Benefit portability; large family supplement – amending Bill introduced
On 2 December 2015, the Minister for Social Services introduced into the House of Representatives a Bill to introduce two 2015 Budget measures: Social Services Legislation Amendment (Family Measures) Bill 2015.
This Bill will introduce the following 2015 Budget measures:
2a. Portability of Family Tax Benefit
From 1 January 2016, the Bill will reduce to six weeks the length of time for which Family Tax Benefit Part A, and additional payments that rely on Family Tax Benefit eligibility, will be paid to recipients who are outside Australia (known as ‘portability’). The ‘portability’ extension, and exemption provisions that allow longer portability under special circumstances, will continue to apply.
This measure will align the portability rules for Family Tax Benefit Part A with those for Family Tax Benefit Part B and most income support payments.
2b. Cease the large family supplement
The large family supplement will cease from 1 July 2016. The supplement is a component of Family Tax Benefit Part A, and is currently paid at a rate of $324.85 per year (or $12.46 per fortnight) for the fourth and each subsequent Family Tax Benefit child in the family.
3. Family Tax Benefit – Other reforms
On 2 December 2015, the Minister for Social Services introduced into the House of Representatives a Bill to make further reforms to Family Tax Benefit Part A and Part B: Social Services Legislation Amendment (Family Payments Structural Reform and Participation Measures) Bill (No 2) 2015.
Including:
3a. Reform Family Tax Benefit Part A and at-home under-18 year old youth fortnightly rates
Family Tax Benefit Part A fortnightly rates will be increased by $10.08 for each Family Tax Benefit child in the family aged up to 19. An equivalent rate increase, of around $10.44 per fortnight, will apply to youth allowance and disability support pension recipients aged under 18 and living at home. These increases will apply from 1 July 2018.
3b. Reforms to Family Tax Benefit Part B
From 1 July 2016, the Bill will introduce a new rate structure for Family Tax Benefit Part B, and make other amendments to the rules for Part B, to:
- increase the standard rate by $1,000.10 per year for families with a youngest child aged under one;
- maintain the current standard rate for families with a youngest child;
- maintain the current standard rate for families with a youngest child aged between five and 13;
- maintain the current standard rate for single parents who are at least 60 years of age, grandparents and great-grandparents with a youngest child aged between 13 and 18; and
- introduce a reduced standard rate of $1,000.10 per year for individuals with a youngest child aged 13 to 16 (currently $2,737.50) who are not single parents aged 60 or more or grandparents or great-grandparents.
3c. Phase out the Family Tax Benefit Part A and Part B supplements
The Bill will phase out the Family Tax Benefit Part A supplement by reducing it to $602.25 a year from 1 July 2016, and to $302.95 a year from 1 July 2017. It will then be withdrawn from 1 July 2018.
The Family Tax Benefit Part B supplement will also be phased out. It will be reduced to $302.95 a year from 1 July 2016, and to $153.30 a year from 1 July 2017. It will then be withdrawn completely from 1 July 2018.
Some of these changes have now made their way into law and others are not far away from becoming law. It may be a little confusing to work out exactly how you might be affected by these changes.
To receive the best advice and develop a better understanding on how you might be affected, contact us below or call 1300 627 829
