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How the 2014 Federal Budget will impact Separated Families

Published: June 29th, 2014 | Written By: 

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2014-Federal-BudgetOn May 13th 2014, the Abbott Government released its proposed budget for 2014-2015.

The budget has yet to pass the Australian Parliament and it is in some doubt as to whether many of the proposed reforms will pass the Australian Senate.

If these reforms are passed in their original form, they will have a significant impact on families, and in particular separated families.

Outlined below are some of the effects the proposed budget will have on separated families if passed in its current form.

Separated families and Government Payments

Family Tax benefits

Family tax benefits are payments supplied by the government subject to certain criteria to assist with the cost of raising children. Under the proposed 2014 budget, their payment rates will be frozen for two years. 1 This means that while inflation (and thus prices of milk, bread etc.) rises, these payments will not.

Family Tax Benefit Part A

Family Tax Benefit Part A is a payment per child under 15 years, or aged 16-19 depending on meeting certain education and training criteria. It is awarded if you satisfy a means requirement, a residence requirement, your child is fully immunised and you care for the child at least 35% of the time. 2 Currently, the maximum payment per fortnight is $172.20 for each child aged 0-12 and $224 for each child aged 13-19 who satisfies the criteria. 3

The main payment itself does not have any changes, but some ofthe following changes are connected to this payment.

Family Tax Benefit Part A –Child add-on.

Under the current system, the maximum amount able to be earned before the Family Tax Benefit Part A is affected is increased by $3 796 for the second and every subsequent child. 4 Under the proposed 2014 budget, this will be removed. 5

Family Tax Benefit Part A –New $750 payment

For those eligible for the maximum rate of Family Tax Benefit Part A, a new allowance of $750 will be introduced for each child aged between 6 and 12 years of age. 6 If you receive over $1478.25 in child support or spousal maintenance per year you may no longer be eligible for the maximum rate 7 and consequently not eligible for this new payment.

Family Tax Benefit Part A -Large family supplement

Under the current system a large family supplement exists where, subject to certain criteria, $12.04 is provided for the third and every subsequent child. 8Under the proposed 2014 budget, this payment will instead be awarded for the fourth and every subsequent child. 9

Family Tax Benefit End of Year Supplement

The Family Tax Benefit End of Year Supplement is awarded to those receiving Family Tax Benefits based on the final income for the year. 10 Under the proposed budget, these will not rise with inflation and will be lowered to $600 per annum for each child under Family Tax Benefit Part A, and $300 per annum for each family under Family Tax Benefit Part B. 11

Family Tax Benefit Part B

Family Tax Benefit Part B is a payment for single parents and families with one main income. It may be awarded where the primary earner’s income is under $150 000 per year to a parent, foster carer, grandparent of other carer who has a dependent child under 16 or a secondary student under 18 for at least 35% of the time. 12 Currently, the maximum payment per fortnight is $146.44 where the youngest child is under 5 years old, or $102.20 where the youngest child is between 5 and 18.

Under the proposed 2014 budget, there are two very large differences that may affect separated families. Firstly, the maximum income of the primary earner will be lowered from $150 000 to $100 000. 13 Secondly, Family Tax Benefit Part B will no longer apply to children aged 6 or older from 2015. 14 However, this restriction will not commence until 2017 for those who currently receive Family Tax Benefit Part B.15

Separated families with low incomes

For many separated families, new and increased costs will need to come out of an already tight income.One such change is the heavily criticized introduction of a $7 co-payment for doctor’s visits, where maximum of ten payments applies to children under 16. 16

Fuel

A further measure that will particularly affect separated families is unfreezing the fuel excise, so it continues to rise with inflation. 17 This will directly impact the separated families with some form of shared custody, which usually involves transporting the children from one home to another on a regular basis.

Concession cards

Many single parents have a Commonwealth Health Care Card or Pensioner Concession Card. Under the proposed 2014 budget, the National Partnership Agreement on Certain Concessions for Pensioners Concession Card and Seniors Card Holders will be terminated. 18 Without the federal funding for these programs, the State Governments may end concessions for programs such as public transport. However, there is no evidence that this would be the case at this point in time and it is possible that the state governments may find another way to fund concessions.

Separated families attempting to reconcile

The budget also included the unveiling of the “Stronger Relationships” program, where couples can sign up online to receive a $200 voucher to be used on counselling and education. 19 It is available for “all couples in a committed relationship, including engaged, married, de-facto and same-sex couples” 20 to be used on counselling or education, including working through financial management or conflict resolution. This means that separated couples attempting reconciliation may receive some financial assistance to undergo counselling.

Paid Parental Leave Scheme

The federal budget has provided very little detail on Prime Minister Tony Abbott’s signature paid parental leave scheme, which has made it difficult to determine precisely what impact this scheme will have on separated families.

The paid parental leave scheme was not included as a separate item in the budget, however the Treasurer Joe Hockey did recently confirm that the threshold had been reduced from $150,000 to $100,000.

Hockey stated that the changes to the paid parental leave threshold was in line with changes to the family tax benefit payments Part A and B, which now cut off or phase out around the $100,000 income level. 21

Download Presentation (PPTX)

  1. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  2. Family Tax Benefits http://www.humanservices.gov.au/customer/services/centrelink/family-tax-benefit-part-a-part-b. ↩
  3. Family Tax Benefit Part B Payment Rates http://www.humanservices.gov.au/customer/enablers/centrelink/family-tax-benefit-part-a-part-b/ftb-a-payment-rates. ↩
  4. Budget 2014-15: Family Payment Reform http://www.humanservices.gov.au/corporate/publications-and-resources/budget/1415/measures/families/42-90009. ↩
  5. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  6. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  7. Family Tax Benefit Part A Income Test http://www.humanservices.gov.au/customer/enablers/centrelink/family-tax-benefit-part-a-part-b/ftb-a-income-test. ↩
  8. Family Tax Benefit Part A Payment Rates http://www.humanservices.gov.au/customer/enablers/centrelink/family-tax-benefit-part-a-part-b/ftb-a-payment-rates. ↩
  9. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  10. Family Tax Benefit Part A Payment Rates http://www.humanservices.gov.au/customer/enablers/centrelink/family-tax-benefit-part-a-part-b/ftb-a-payment-rates. ↩
  11. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  12. Family Tax Benefitshttp://www.humanservices.gov.au/customer/services/centrelink/family-tax-benefit-part-a-part-b. ↩
  13. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  14. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  15. Budget 204-2015 Social Services Overview End Notes http://www.budget.gov.au/2014-15/content/glossy/welfare/html/welfare_18.htm. ↩
  16. Budget 2014-2015 Health Overview http://www.budget.gov.au/2014-15/content/glossy/health/html/health_09.htm. ↩
  17. Budget 2014-2015 Infrastructure Overview http://www.budget.gov.au/2014-15/content/glossy/infrastructure/html/infrastructure_03.htm. ↩
  18. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  19. Budget 2014-2015 Paper No. 2 http://www.budget.gov.au/2014-15/content/bp2/html/bp2_expense-21.htm. ↩
  20. Budget Fact Sheet – Stronger Relationships http://www.dss.gov.au/about-the-department/publications-articles/corporate-publications/budget-and-additional-estimates-statements/2014-15-budget/budget-fact-sheet-stronger-relationships. ↩
  21. Doubts over paid parental leave scheme http://www.afr.com/p/national/budget/doubts_over_paid_parental_leave_7P7wizKB5bqYntWMNApnPO. ↩

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Susan Jayne

Susan Jayne

Online Legal Information Author at Family Law Express
Susan Jayne is currently in her fourth year of attaining degrees in both Law and Psychology. While volunteering at a Psychology Clinic throughout her university studies, she’s aspiring to find a career which utilises her new found knowledge in both of her chosen fields.
Susan Jayne

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Categories: Concession cards, Counselling Vouchers, Election Promises, Family Tax Benefit Part A, Family Tax Benefit Part B, Government Funding, Paid Parental Leave
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