What is the family tax benefit?

The Australian Government offers several different types of income support payments to help with the cost of raising children. 

1. Family Tax Benefit
2. Parenting Payment
   

In this article, we'll look at the Family Tax Benefit in a little more detail. To start, there are actually two types of Family Tax Benefit:

1. Part A: a payment made per child
2. Part B: a payment made per family

You can choose to receive payments fortnightly or as a lump sum payment at the end of the financial year.

Family Tax Benefit Part A

• It’s income tested, based on your family's annual income over the full financial year.
• The amount you receive also depends on the number of children you have, their ages and the percentage of time you care for your children (if this is shared).

Current maximum payment rates

Family Tax Benefit Part A Supplement

You may also receive a supplement of up to $766.50 per child at the end of the financial year, if your family has a combined income of $80,000 a year or less to be eligible for the supplement:

• You must lodge a tax return with the ATO to confirm your income details.
• Your child also needs to be up to date with immunisations listed on the National Immunisation Program Schedule (or hold a medical exemption) and meet the Healthy Start for School requirements if they apply.

Family Tax Benefit Part B

This offers extra support to single parents, non-parent carers and families with one main income.

• It’s based on total family income. 
• The percentage of care is considered for shared care arrangements, and payment rates may change if you’re a parent returning to work.

Current maximum payment rates

Family Tax Benefit Part B Supplement

You may also receive a supplement of up to $372.30 per family at the end of the financial year.

Family Tax Benefit eligibility

You may be eligible for Family Tax Benefit Part A if you have a dependent child who is 0-15 years old or aged 16-19 years old and in full-time secondary education.

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

• are a couple with one main income and care for dependent children under the age of 13 or
  
• are a single parent or non-parent carer with a dependent child under age 18.

You cannot receive both Parental Leave Pay and Family Tax Benefit Part B.

For both Part A and Part B, you must also meet the income test, residency requirements and care for the child at least 35% of the time.

What’s the income test?

Family Tax Benefit Part A

• Earning less than $54,677 (or you receive an income support payment): you’ll receive the maximum rate of Family Tax Benefit Part A.
  
• Earning between $54,677 and $98,988: the rate reduces by 20 cents for each dollar earned above $54,677 until it reaches the base rate ($59.78). 
• Earning over $98,988: the rate reduces by 30 cents for each dollar of income over $98,988 until your payment is nil.

Family Tax Benefit Part B

• The primary family income earner must earn less than $100,000pa.
• Then the income of the parent or carer with the lower income (the secondary earner) is used to work out how much Family Tax Benefit Part B you’ll receive. The secondary earner can earn up to $5,694 each year before it affects the payment. Payments reduce by 20 cents for each dollar earned over $5,694.

Are there any additional payments I should know about?

If you receive Family Tax Benefit Part A you may also be eligible for the following.

• Newborn Upfront Payment and Newborn Supplement
• Multiple Birth Allowance
• Energy Supplement
• Health Care Card
• Rent Assistance

Next: What is the parenting payment