FocusOn - Family Tax Benefit & Child Care Rebate
Family Tax Benefit (FTB)
Family Tax Benefit is a payment to assist families with the
cost of raising children. There are two types of payments comprising the
benefit:
 | FTB Part A – based on the family’s income, and |
| FBT Part B – based on the secondary earner’s income for
families with children aged under 18. |
From 1 July 2009
claims for the FTB, including previous year claims, can no longer be claimed
through your income tax return.
To claim
FTB you need to apply through the Family Assistance Office by either lodging:
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Online at
www.familyassist.gov.au, or |
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A paper claim form in person at a Centrelink customer service centre or
Medicare office. |
Baby Bonus
Another
family benefit is the baby bonus, which is a payment following the birth or
adoption of a child. On 1 January 2009 a number of changes to the Baby Bonus
came into effect. These changes apply to children who are born or who enter
your care on or after 1 January 2009:
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The Baby Bonus of
$5,185 is for each child and is payable in 13 equal fortnightly
instalments following birth or adoption. |
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It is paid if the
family’s adjusted taxable income (see below) is $75,000 or less in the
six months following the birth of the child or the child entering your
care. |
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The Baby Bonus must
be claimed within 52 weeks (previously 26 weeks) of the child’s birth or
from the date the child was entrusted into your care, otherwise the
entitlement is lost. |
|
Eligibility for the
Baby Bonus has been extended to parents who adopt children under 16
years of age. |
Other benefits include
payments for large families (three children or greater) or multiple births,
rent assistance and a Health Care Card. We recommend you contact Centrelink
directly on 13 61 50 for further details or visit
www.familyassist.gov.au.
Adjusted taxable income
Adjusted
taxable income is:
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The sum of the following amounts for
the financial year: |
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Taxable income, |
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Reportable fringe benefits, |
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Target foreign income (including tax
exempt foreign employment income), |
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Net investment losses (including rental
property losses), |
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Tax-free pensions or benefits, and |
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Reportable superannuation contributions |
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Less deductible child maintenance
expenditure |
Entitlement to Family Tax Benefit - Part A
You can receive FTB Part A if:
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You have a dependant child under 21 years, or have a dependant full-time
students aged 21 to 24 years. The payment is for each child. |
|
You must have legal resident status and be residing in Australia on a
permanent basis. |
FTB Part A is based on
your family’s yearly adjusted taxable income. There is no assets
test. The benefit is based on the number of children you have and the ages
of your children.
For the 2010 financial
year, the maximum FTB Part A (with supplement) is $4,803.40 per year for a
child under 13 if the family’s income is below $44,165 a year. This benefit
reduces by 20 cents for each dollar of income the family receives above this
threshold, until the ‘base rate’ is reached. The ‘base rate’ for a child
under 18 is $2,018.45.
Your FTB Part A will stay
at the ‘base rate’ until your family’s income reaches $94,316 a year (plus
$3,796 for each dependent child after the first). The FTB will then reduce
by 30 cents for each dollar over that amount until your payment reaches
‘nil’.
The graph below illustrates the benefit received as the family’s income
increases. Please note that the amounts described relate to only one child
under 13. The figures are different for more children and for different
ages.
Entitlement to Family Tax Benefit – Part B
You may receive the FTB Part B if:
| You are a single parent family, or if the ‘primary’ earner
has an adjusted taxable income below $150,000 and the 'secondary' earner in the family
earns below the income levels described below, and |
| You have a dependent child aged under 16, or you have a dependent child aged
between 16 and 18 who is a full time student and does not receive Youth
Allowance or any other payment. |
For the 2010 financial year, the maximum rate of FTB Part B (with
supplement) is $3,828.85 if
the youngest child is under 5 years of age and $2,774.00 if the youngest
child is between the ages of 5 to 15 (or up to 18 years if a full-time
student).
Sole parents receive the maximum rate of FTB Part B. Their income is not
taken into account in working out how much benefit the family will receive.
For two-parent families the primary earner’s income must be below $150,000.
The benefit is then determined on the secondary earner's income (ie. the
partner earning the lesser amount).
As shown on the graph below, the secondary earner can earn up to $4,672 a
year before the payment is affected, with a reduction of 20 cents for each
dollar over that amount. As a secondary earner you will still receive some FTB Part B if your income is below:
Education Tax Refund
The Education Tax Refund
helps eligible families and independent students meet the costs of primary
and secondary school education.
The Education Tax Refund
is available to families who receive FTB Part A. You are then eligible for
the 50% tax refund for education expenses, subject to limits.
For further information,
please refer to our FocusOn Education Tax Refund or visit
www.educationtaxrefund.gov.au.
Child Care Benefit (CCB)
Child Care Benefit
assists you with the cost of child care for long day care, family day care,
occasional care, outside school hours care, vacation care and registered
care.
You may receive CCB if:
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You use approved or registered child care, and |
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Your child is immunised (or on an immunisation catch up schedule), or is
exempt from the immunisation requirements, and |
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You are responsible for paying the child care fees for your child, and |
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You and your child/ren must have legal resident status and be residing
in Australia on a permanent basis. |
Approved child care
Approved child care
services have Australian Government approval to pass on CCB to families as a
reduction in their child care fees. Most long day care, family day care,
before and after school care, vacation care, some in-home care and
occasional care services offer approved care.
Registered care
Registered care is child
care provided by grandparents or other relatives, friends or nannies that
are registered as carers with the Australian Government’s Family Assistance
Office. It may also be provided by individuals in preschools, kindergartens,
some outside school hours care services and some occasional care centres.
Payment method
Approved Care
You can choose to have
your CCB for approved care paid directly to your child care service to
reduce your child care fees, or claim it as a lump sum at the end of the
financial year.
You are limited to 24
hours care per child per week unless you meet the work/training/study test.
To meet the test, you and your partner must undertake work or work-related
activities such as training or studying, for at least 15 hours per week. If
you meet the test, you can get up to 50 hours care per child per week.
The current rate for a
non school-age child in up to 50 hours of care per week is $3.60 per hour or
$180.00 per week. Payment rates for school-age children are 85% of the non
school-age rate.
Registered
Care
You are paid CCB for
registered care directly after you lodge a claim and provide your child care
receipts to the Family Assistance Office.
The current registered
care rate for a non school-age child in up to 50 hours of care per week is
$0.602 per hour or $30.10 per week. Payment rates for school-age children
are 85% of the non school-age rate.
Income test
Approved Care
To qualify for CCB for
approved care you need to meet an income test. You do not have to meet an
assets test.
From 1 July 2009, the
maximum rate is payable if your annual family income is under $37,960.
CCB is not payable over
the following family income limits:
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One child: $131,560 |
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Two children: $136,375 |
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Three or more children: $153,995 plus $29,077 for each child after the
third. |
Registered
Care
You do not have to meet income or assets tests to qualify for
CCB.
Child Care Rebate (CCR)
On 1 July 2009, the Child
Care Tax Rebate was re-named the Child Care Rebate. The name change
recognises that the rebate is no longer a tax offset under taxation
legislation but is paid to families under the Family Assistance Law by the
Family Assistance Office.
CCR helps working
families with the cost of child care. The CCR covers 50% of out-of-pocket
child care expenses for approved child care, with a rebate of up to $7,778
($7,500 in 2008/2009) per child per year, for eligible families for the
2009/2010 financial year.
Out-of-pocket expenses
are total child care fees less your CCB entitlement. CCB entitlement
includes any Jobs Education and Training Child Care fee assistance that you
may be eligible for.
You may receive CCR if:
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You used approved child care during the year, |
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You are eligible for the Child Care Benefit, even if you receive no
payment because your income is too high, |
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You and your partner meet the work/training/study requirements, and |
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You meet the residency requirements for Child Care Benefit. |
There is no income or asset test for the
Child Care Rebate.
Payment method
At the end of the
financial year, your CCR may be adjusted after your CCB has been reconciled
with your actual CCR entitlement. The CCR entitlement is paid directly into
your bank account by the Family Assistance Office.
If you want to receive
your CCR as a quarterly payment, you must claim CCB as reduced fees. You can
choose to receive your CCR annually by contacting the Family Assistance
Office on 13 61 50.
The CCR payment method is
based on your CCB entitlement. If you choose to claim CCB as a lump sum
payment, you will not receive your CCR entitlement until the end of that
year, once your CCB entitlement has been determined.
Published : 27 July 2009
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