Government assistance for families Tax time is often a good time to check out the government support provided to parents to offset the considerable cost of raising our children.
Most people will get some Government support, whether it’s in the form of tax breaks or direct payments; much of it is ‘means tested’ – that is, is determined by your household’s income level, but it can add up to a significant amount of money, very helpful if you’re struggling to manage a tight household budget.
Government support for parents includes the Baby Bonus (aka the Maternity Payment), Child Care Benefit and the much talked-about Child Care Tax Rebate. Sounds great, until you try to find out what you’re entitled to and how to claim your fair share – many of us give up the search in sheer frustration.
We’ve made the process simpler with this guide to the common payments. (We want to save parents from that awful experience of standing in a queue with a crying baby for what seems like hours just to find out that you’re in the wrong department of a government office!)
For more detailed information, visit your local Family Assistance Office, between 8am and 8pm Monday to Friday, or call 13 61 50 or go to the Family Assistance website.
Family Assistance Offices are located in Centrelink Customer Service centres, Medicare offices and Tax Office shopfronts – and a new online claim service is available for certain claims.
Note:
- Claims relating to the 2005-2006 financial year will not be paid unless lodged by 30 June, 2008
- Claims relating to the 2006-2007 financial year will not be paid unless lodged by 30 June, 2009
- Claims relating to the 2007-2008 financial year will not be paid unless lodged by 30 June, 2010
- This information is of a general nature and should not be relied upon to prepare your application to Centrelink.
Each case has its individual merits and should be treated as such. - In most cases, residents of New Zealand living in Australia are entitled to the same benefits as Australian residents.
Topics Covered
- General Information
- Family Tax Benefit Part A
- Family Tax Benefit Part B
- Large Family Supplement
- Maternity Payment
- Maternity Immunisation Allowance
- Child Care Benefit
- Child Care Tax Rebate
- Other benefits
- Medicare benefits for families
1. General Information
Becoming a Centrelink customer – where you will be issued with that all-important Centrelink Customer Number - is your first step. To do this you will need to visit a Centrelink office and provide Proof of Identity for you and your partner. Be aware that you will need original copies of the required documents, photocopies will not be accepted.
Here is a checklist of the information that will be required before you can hop on the Centrelink merry-go-round.
- Either proof of Birth in Australia (Original Australian Birth Certificate) or a document proving your arrival in Australia if born overseas, or other documents that show your legal residence status.
- Other documents that will meet the 100 point checklist (This list can be found on the Centrelink website Proof of Identity). It is similar to the paperwork for opening a bank account.
- You must have a current bank account to receive your payments.
- Your rental details (if appropriate).
- Birth Certificate or adoption papers of your child.
- If your child is under 2 – their Medicare number or record of immunisation status.
- Tax File Numbers (TFN) for you and your partner.
- Your family Income estimate.
Note – You will need to provide a fairly accurate estimate of your household income so that your payments are calculated as close as possible to the final amount you are entitled to. If in doubt, it may be better to over estimate your income so that you are not left with a big debt to Centrelink when your tax return is processed. What Is Income? Your income is calculated during the financial year, ie, 1 July to30 June of the following year. Your taxable income includes all the money you have earned through every source, less any allowable deductions. For more information on estimating your income visit, “What is Family Income?” on the Family Assistance website. Be aware that your assessment is matched to your tax return when lodged at the end of the financial year; if you have under-estimated your family income and have received a higher payment than you are eligible for, you will be required to repay the full amount of the over-payment. However, if you have over-estimated the family income, you will receive the additional amount in a lump sum payment after your tax return has been lodged. Back to Top 2. Family Tax Benefit Part A Family Tax Benefit Part A is an annual tax benefit based on your income. It is designed to assist with the cost of raising your children. Eligibility: To be eligible for this benefit you will need to be: - The carer of a child under the age of 21 (up to 24 years if a full time student).
- An Australian resident or specific visa holder
- Your income must not exceed a certain amount, although there is a sliding scale depending on the number and age of your children; if you have one child under 17, the cut-off is around $98,000 and this rises to around $155,000 for families with three children aged 18-24. (For more detail visit the Family Assistance website).
How do I claim? You will need the Family Tax Benefit claim form. Most maternity hospitals issue this to new mothers before they check out; but if you haven’t received one, you can download it from the Family Assistance website, visit a Family Assistance Office (located within certain Centrelink offices) or call 13 61 50 to arrange for a form to be mailed to you. This payment is subject to an income test and is based on the total income for the household in a financial year. The Family Tax Benefit can be paid to you on a fortnightly basis, based on the total household income estimate that you provide to Centrelink. Be aware that if you underestimate your income you will be overpaid and you will be hit with a bill at the end of the year. However if you overestimate your income, you will receive a top up payment at the end of the financial year – after your tax return has been processed. Note – You can also receive this payment as a ‘deferred payment,’ so you receive a lump sum after lodging your tax return, or as reduced tax. Many people opt for this method of payment as it means you will only be paid your true entitlement. From 1 July 2009, fortnightly benefits will not be paid to those who have not lodged a tax return within the prescribed time. You may also be entitled to the Family Tax Benefit Part A supplement. This is an increase in the annual rate of Family Tax Benefit Part A per child to be paid as a lump sum after the end of the financial year. The Supplement is available to all Family Tax Benefit Part A eligible families although if you have been overpaid any entitlements then instead of receiving the full amount it will be used to off set, or repay, the outstanding amount. Back to Top 3. Family Tax Benefit Part B The Family Tax Benefit Part B is designed to provide extra financial assistance to single income families and to families with one main income. It is paid on a 'per family' basis, and the rate varies according to the age of the youngest child. To be eligible for this tax benefit you must be: - An Australian Resident or a specific visa holder.
- The carer of a child up to the age of 16 or 18 if the child is a full time student
- Earning below a certain amount of personal annual income
How do I claim? Fill in the Family Tax Benefit claim form, issued to new parents by most maternity hospitals. If you haven’t already received one, you can download it from the Family Assistance Website, visit a Family Assistance Office or call 13 61 50 to request that a form is mailed to you. From 1 July 2008, the Family Tax Benefit (FTB) Part B will be limited to families where the primary earner has an adjusted taxable income of $150,000 or less. (Previously there was no limit on how much the primary, or higher, income earner could earn and all sole parents, regardless of their income, were eligible.) The amount of the benefit depends on the lowest income earner’s total income over a financial year. Currently, the lower income earner can earn around $4,000 per annum before their FTB Part B payment is affected and payments reduce on a sliding scale until a cut-off of around $22,000 for those with a child under five, or around $17,000 for those whose youngest child is aged five to 18. For more information, contact the Family Assistance office on 13 61 50 or visit the Family Assistance website. You can receive this as a fortnightly payment or claim as a lump sum as after lodging your annual tax return. Back to Top 4. Large Family Supplement If you have three or more children, and you receive Family Tax Benefit, an extra allowance (currently around $10 per child) is automatically added to your benefit for the third and each subsequent child. You don’t have to apply for this, but if you are not receiving it and you think you are entitled, you should contact the Family Assistance office.
Back to Top 5. Baby Bonus / Maternity Payment
The Baby Bonus (previously called the Maternity Payment) is a much talked-about lump sum introduced to help with the costs of having a new baby.
Up to 1 January 2009, the Baby Bonus is not income tested with all Australian residents being eligible. The Baby Bonus is currently a lump sum payment of $4,258 made on the birth of a child or the adoption of a child younger than two years of age. (However new mothers under 18 years or those identified as ‘at risk’ are paid the Bonus in a series of fortnightly instalments.)
That means that all new mothers with a baby born before 1 January 2009 will receive this payment, provided they don’t forget to fill in the paperwork. The lump sum payment must be claimed through the Family Assistance office within 26 weeks of the birth or adoption of your baby. (You can always send this by post to Centrelink if you’re struggling to get out and about.)
After 1 January 2009, the Baby Bonus will be eligible only to families with an adjusted taxable income equivalent to $150,000 or less a year (calculated based on earnings in the six months following the birth or adoption.) The payment will no longer be made as a lump sum, instead will be paid in 13 fortnightly instalments, paid from the date of claim. However, the Baby Bonus will be available to parents adopting children up to the age of 16 years.
How do I claim?
You will need the Newborn Child Claim for Family Assistance and a Medicare form. You may be able to get this from your maternity hospital before you leave. Claims can also be made online by downloading the form at the Family Assistance website. You can also visit a Family Assistance Office, or call 13 61 50 and ask to have one sent to your home.
Note – You cannot claim this payment through your annual tax return.
Back to Top 6. Maternity Immunisation Allowance
The Maternity Immunisation Allowance was established as part of the commitment by the government to increase the rate of childhood immunisation in Australia.
Before January 1, 2009, the allowance is paid as a one-off payment that must be claimed prior to your child’s second birthday.
From January 1, 2009, the allowance is paid as in two lump-sum payments, one that must be claimed prior to your child’s second birthday and the second that must be claimed before your child’s fifth birthday. (If you have already received the full immunisation payment before January 1 2009, you are not eligible to claim an extra payment before your child’s fifth birthday.)
It helps the smooth the process if you have already provided your Medicare details to Centrelink.
Here are the criteria to be eligible for this payment. Your child must be:
- Up to date with immunisation (with proof eg Child Health Record), or
- On a recognised immunisation catch-up schedule, or
- Your child has been made exempt from being immunised
You can still claim Maternity Immunisation Allowance even if you’re not eligible for Family Tax Benefit. You will need to fill in the Family Tax Benefit form. If you are not claiming Family Tax benefit you must make this claim directly through the Family Assistance Office. You’ll need to either visit a Family Assistance Office (these are within Centrelink) or call 13 61 50 and you can ask to have the Maternity Immunisation Allowance form sent to your home.
If you’re already receiving any of the above Family Assistance and you have provided your child’s Medicare details to the Family Assistance Office, Centrelink will link directly to the Immunisation Register and make this payment automatically after your child has had their 18-month immunisation. If not, you will need to provide a record of your child’s immunisation status.
Note –
- This payment is not income or assets tested.
- You cannot claim this payment through the tax system.
- If your child turns two before 1 Jan 2009, you will make one claim, which must be made before their second birthday; otherwise, you will make two claims, one before your child’s second birthday and the second claim before your child’s fifth birthday.
Back to Top 7. Child Care Benefit
Child Care Benefit is a payment to help families who use approved and registered child care. From 1 July 2008, eligibility for the Child Care Benefit will be income-tested.
You may be able to claim Childcare Benefit (CCB) to help with the cost of your child attending Approved Care or any of the following Registered Care service providers.
To be eligible for CCB you must: - Be an Australian resident living in Australia or meet other residency requirements and
- Your child must be up to date with their immunisation (or has approved exemption) and
- Be attending approved or registered care and
- Be responsible for all your Child Care costs (check this with your employer if you use salary sacrificing or salary packaging to pay for child care)
- You may be required to provide details of your employment situation if you wish to claim for more than 24 hours of CCB each week.
Approved Care: (Check with your child care service to find out if they are an approved provider.)
- Most long day care centres
- Most family day care centres
- Most before and after school care
- Most vacation care centres
- Some occasional care centres
- Some in-home care providers
You can receive CCB either by arranging to reduce the fees you pay on a daily/weekly basis to your approved Child Care service, or by making a lump sum claim at the end of the financial year from the Family Assistance Office or from the Australian Taxation Office. The claim must be lodged within 2 years from the end of the financial year for which you are claiming.
To reduce your fees by more than the minimum entitlement you will need to provide an estimate of your family income.
This benefit is income tested and the amount you will receive varies depending on whether parents are working, studying, training or even looking for work. If you have a partner, their work/study circumstances are also taken into account when working out your entitlement. There is a formula used to work this amount out and can be calculated by your centre, or visit the Family Assistance website for an estimate.
Registered Care:
- Care provided by family, friends or a nanny for work related childcare as long as they are registered with the Family Assistance Office.
- Some private pre-schools and kindergartens.
- Occasional Care centres and Outside school hours care.
For registered care you can make a claim after the care has been provided and you have paid for the service. To make a claim for registered care you will need to take your receipts to a Family Assistance office (note – you must claim within 12 months of the service). You can only make a claim if you are engaged in work related commitments during the period for which you are making a claim.
Registered care will only be eligible for the minimum rate of child care benefit, currently around $28 per week per child, or around $24 per week for school children, for 50 hours care a week.
You have certain responsibilities that you will need to fulfil to ensure that you receive the CCB. You can find a full checklist on the Family Assistance Website.
Back to Top 8. Child Care Tax Rebate
The Child Care Tax Rebate is a separate payment to the Child Care Benefit (CCB) – and is not means-tested.
The Child Care Tax Rebate is only paid to people who meet the basic eligibility criteria for CCB (even if they do not receive CCB because their income is too high.)
The Child Care Tax Rebate is a payment designed to help working families with the cost of their child care, regardless of their income. The Rebate will cover up to 50% of the “out of pocket” child care costs incurred, for approved child care. You will need to be receiving CCB – see above - and satisfy the CCB work/training/ study test to be eligible for this rebate.
This means that you will be reimbursed 50% of the difference between the childcare fees you have paid and the amount of CCB you have received, up to a maximum of $7,500 per child per year. The rebate will be paid quarterly.
You will need to keep your receipts from this period and the notification letter from Centrelink regarding the amount of CCB you have received.
You are not eligible for the Child Care Tax Rebate if you are using Registered Care for your child care arrangements.
From the 1st of July 2007, the Family Assistance Office will make the payment directly in to your bank account from September 2007. This will occur after you have submitted your tax return and your Approved Child Care service provider has reported your out-of-pocket costs. To claim for Child Care used during the 2006-2007 period you must lodge your claim when completing your income tax return for the 1st July 2006 to 30th June 2007 financial year. Back to Top 9. Other benefits to help parents and carers
There are a range of benefits covering special circumstances; if you are not sure what you are entitled to, make an appointment with your nearest Centrelink office to get specific information. A few of the other benefits for parents include:
Multiple Birth Allowance Not available for twin parents, unfortunately; but if you have had triplets (or more) and you receive Family Tax Benefit, you will automatically receive an extra payment of around $120 per fortnight. Since January 2008, the allowance is now paid until the children turn 16 years of age or, if at least three of the children are in full-time study, until the end of the calendar year in which the children turn 18 years of age.
Jobs, Education and Training (JET) Child Care fee assistance If you currently receive an eligible Centrelink payment (such as Parenting Payment) and you receive the maximum amount of Child Care Benefit, and you are involved in activities such as work or study, you may be eligible for this payment, which covers most of the ‘gap fee’ for approved child care. Back to Top 10. Medicare benefits for families
If you spend over a certain threshold on out-of-hospital medical services in one year, you will be eligible for additional Medicare rebates. Make sure you register all of your family members (you can do this online at www.medicareaustralia.gov.au ) so that the medical costs for each person can count towards the family’s Medicare Safety Net threshold.
When you have spent over $365 on out-of-hospital medical services in one calendar year, you will be eligible to receive 100% of the schedule fee for all medical services after the threshold is reached. An additional benefit, of 80% of all out-of-pocket costs, is paid after you reach a higher threshold (about $530 for families eligible for Family Tax Benefit Part A and around $1060 for other families.) Back to Top
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