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Your Entitlements: Centrelink Benefits for Parents & Families

2013-04-05

Do you have children?  Are you aware of which Centrelink benefits you are entitled to receive to assist with the raising of those children?  No - well you are not alone.  Hopefully after you read this article it will be a little bit clearer.

 

Parental Leave Scheme v's Baby Bonus Scheme

If you are pregnant or preparing to adopt a child there are two schemes designed to help with the cost of raising a new child - the Parental Leave Scheme and the Baby Bonus Scheme.   The Parental Leave pay and  the Baby Bonus cannot be paid for the same child, however provided you meet the eligibility criteria for both schemes, you are able to choose which scheme will be better financially for your family.  To assist you in determining the better scheme for your family, a calculator has been provided by Centrelink on their website: www.centrelink.gov.au. 

 

Parental Leave Scheme

There are two payments under the Parental Leave Scheme. The first being Parental Leave Pay.  This payment is available for a maximum period of eighteen (18) weeks if you are the primary carer of a new born or recently adopted child.  To be eligible to receive this payment, which is currently $606.50 per week (before tax), you must meet both the work and income tests and be on leave from your paid employment for the duration of the Parental Leave period.  

What is the work test?

To meet the criteria of the work test, you must:

  1. have worked for at least 10 of the 13 months prior to the birth or  adoption of the child
  2. worked for at least 330 hours in that 10 month period (equates to just over one (1) day per week with no more than an eight week gap between two consecutive working days.

For Centrelink purposes, a working day is at least one hour.  

Whilst in receipt of the Parental Leave pay,  you will not be eligible to receive any FTB Part B.  One other important point to consider is that the Parental Leave payment is taxable and must be included as income in your taxation return.

The second payment available under the Paid Parental Leave Scheme is the Dad & Partner Pay which became available for Dad's and partners (including same sex couples) from 1st January 2013.  This payment is available to be paid for a maximum period of two (2) weeks at $606.50 a week before tax.  Again, this payment is taxable and must be included as income in your taxation return.    This payment can be paid any time between the date of birth of the child and 52 weeks after the birth or adoption.  As per the Parental Leave Scheme, you must meet both the work and income tests and is only available if the recipient is on unpaid leave or not working whilst receiving this payment. 

 

Baby Bonus

Alternatively, you may calculate that receiving the Baby Bonus will result in a higher amount being available for your family. The Baby Bonus is currently $5,000 per child, which is paid in thirteen (13) fortnightly instalments.  The first instalment is $846.20 followed by twelve (12) further instalments of $346.15. The Baby Bonus payment is income tested and is paid to eligible families whose estimate of combined adjustable taxable income is $75,000 or less in the six (6) months following the birth or adoption of the child. 

 

Family Tax Benefit

Family Tax Benefit payments are designed to assist with the cost of raising children and is divided into two parts:  Family Tax Benefit Part A and Family Tax Benefit Part B.  

You can choose whether to have your payments made as a fortnightly payment or once a year as a lump sum, after your taxation return has been lodged.

Family Tax Benefit (FTB) Part A is income tested and is based on your family's circumstances.   This payment is paid for each child up to 15 years of age or up to 19 years of age if still in full time secondary education. 

Family Tax Benefit (FTB) Part B provides additional help to single parent families and to two parent families with one main income.  Single parents will receive the maximum amount of FTB Part B  if their annual income is $150,000 or less.  For eligible two parent families, with the higher income earner on $150,000 per year or less, the income of the lower earner affects how much FTB Part B will be paid.  The lower income earner can earn up to $5,037 per year before Part B will be reduced. They can earn $25,623 before the FTB Part B is cut off if their youngest child is under 5 and they can earn $19,929 if the youngest child is between 5 and 18 years.

In order to receive Family Tax Benefit,  your taxation returns must be up to date and lodged with the Australian Taxation Office.  If you are not required to lodge a tax return, you must notify Centrelink before your Family Tax Benefit will be paid.

 

School Kids Bonus

The School Kids Bonus is designed to provide additional help to families and students to pay for educational expenses such as school fees and books.  If you are entitled to Family Tax Benefit Part A you will receive a yearly payment of $820 for each eligible secondary school student and $410 for each eligible primary school student.  These amounts are paid in two instalments in January and July each year.

 

Health Care Card

Low income families receiving the maximum rate of Family Tax Benefit Part A by fortnightly payments, may also be eligible for a Health Care Card which assists with the cost of winter energy bills, car registration and doctor's bills.

 

Child Care Benefit

If you decide to go back to work or study, you may be able to claim some Child Care Benefits. The Child Care Benefit is designed to help with the cost of approved child care.  If you have a child in approved child care, under seven years of age and you are working or studying, depending on your circumstances, you may be eligible to receive up to $3.90 per hour ($195 per week for a fifty (50) hour week) for a non-school aged child.

If you are not entitled to receive the Child Care Benefit, you may still be eligible to receive the Child Care Rebate.  This rebate is fifty (50) percent of your child care expenses up to the annual cap of $7,500 per child per year.  This rebate can be paid directly to you or to your child care provider.

 

Parenting Payment 

Parenting Payment  is also available to low income families and to single parents. There are some return to work conditions if your child is over six years of age.

For more information on all Centrelink payments please see the website: www.centrelink.com.au or contact one of our professional advisers on 1300 TAX 000.

 

General Advice Warning: Liability limited by a scheme approved under Professional Standards Legislation. This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal taxation and financial advice prior to acting on this information. Opinions constitute our judgments at the time of issue and are subject to change. Neither, the Company or any of employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. 

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