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FTB part A and B and Government Financial Support

The main types of government assistance for working parents are: Family Tax Benefit Part A. This helps families with the cost of raising children and Family Tax Benefit Part B. This gives extra help to single income families

Government Financial Support

At present childcare in Australia is not tax deductible. The costs of childcare can be a lot higher than parents or prospective parents realise. Full time centre based care at one of the more expensive centres could cost up to $18,000 per year per child, although most parents pay less than this. Consequently government assistance is important. A new website http://www.familyassist.gov.au/ The Family Assistance Office makes it possible to find answers to a range of questions relating to government benefits in one location.

The main types of government assistance for working parents are:

- Family Tax Benefit Part A. This helps families with the cost of raising children.

- Family Tax Benefit Part B. This gives extra help to single income families including sole parents.

- Childcare Benefit. This helps families with the costs of childcare.

- Maternity Payment. This allowance is to help with the extra costs of a new baby.

- Maternity Immunisation Allowance. This is a separate payment for children who are fully immunised or are exempted from immunisation.

Family Tax Benefit Part A

You can get Family Tax Benefit Part A if you:

- have a dependent child under 21 or;

- have a dependent full-time student aged 21 to 24

- have income under a certain amount.

- are an Australian resident,

How much is Family Tax Benefit A?

If your family income is under $41,318 a year you can get the maximum payment of $145.46 per child per fortnight. This rate changes once your child or children turn 13.
If your income is more than $41,318 a year, your payment will reduce by 20 cents for each dollar above $418,318 until your payment reaches the base rate of Family Tax Benefit Part A.

The base amount of Family Tax Benefit Part A is $46.90 for each child per fortnight per year.

CHILDCARE INFORMATION KIT - Government Financial Support 24

Note: As the Family Tax Benefit Part A Supplement is paid after the end of the financial year, the amount is not included in the fortnightly figures. Annual figures include the $667.95 per child supplement for 2007/08.

Family Tax Benefit Part B Supplement

Family Tax Benefit Part B Supplement gives extra assistance to single income families including sole parents, especially families with a child under the age of five.

For sole parent families

Your income is not taken into account when calculating your entitlement to Family Tax Benefit Part B. Sole parents receive the maximum amount of Family Tax Benefit Part B, regardless of income.

The maximum amount of Family Tax Benefit Part B you can receive is $125.02 per fortnight per child if your youngest child is under five years and $87.08 per fortnight if they are over five years old:

For two parent families

The primary earner's income is not taken into account when calculating the amount of Family Tax Benefit Part B that families can receive.

The secondary earner's income (the partner earning the lesser amount) is taken into account. You can earn $4,380.00 per year before your payment is affected, with a reduction of 20 cents for each dollar of income over that amount.

As a secondary earner you will still receive some Family Tax Benefit Part B if your income is below $22,302.00 a year if your youngest child is under five; or $17,356.00 a year if your youngest child is over five.

It is important that you check the rates as they apply to your situation, as each person's situation is different.

Please note: Family Tax Benefit Part B is paid per family. As the Family Tax Benefit Part B Supplement is paid after the end of the financial year, the amount is not included in these figures.

The amount of Family Tax Benefit Part B will reduce by 20 cents for each dollar earned above the income limit ($4 380.00 for 2007-9 income year).

Example

Allan and Michelle's youngest child is 12 years old. Irene works part-time and earns $10 000 per year.

Step 1
$10 000 - $4 380 = $5 620.00
CHILDCARE INFORMATION KIT - Government Financial Support 25

Step 2
$5 620 X 0.20 = $1,124.00

Step 3
$2 270.30 - $1 124.00 = $1,146.30

Therefore, Allan and Michelle's Family Tax Benefit Part B entitlement will be $1,146.30 for 2007-08.

(Family Tax Benefit examples taken from Centrelink website)

Some Advice

When applying for Family Tax Benefit, you must provide the Family Assistance Office with an estimate of your family income for the coming 12 months.

In the past, many families have underestimated their income. The Government reclaims any overpayment of Family Tax Benefit from any tax refund due, or a debt may be incurred. This has improved with Centrelink taking a much more proactive role in ensuring that correct payments are being made and cautionary levels of payments.

It is vitally important that you advise the Family Assistance Office of any change in family circumstances (eg returning from Maternity Leave etc ) so the Childcare Benefit can be adjusted.

Many families are now choosing to receive their Family Tax Benefit as a lump sum at the end of each financial year through the tax system. To do this, you will need to make your claim for Family Tax Benefit when you lodge your tax returns at the end of the financial year.

You can claim Family Tax Benefit by calling the Family Assistance Office on 13 6150.

This also raises an important point. Because from July 1 BOTH mums and dads now have a combined earnings calculation for purposes of child support calculations it is important you have a tax return in as soon as practical after the end of the financial year otherwise you may be paying too little or too much Child Support.

Executive Secretary - Shared Parenting Council of Australia
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