Raising kids can be expensive. As far back as 2012, the University of Canberra estimated that the typical Australian family spends over $800,000 to raise two children. Even if we omit families on higher incomes (who may opt for private schooling and more expensive hobbies), the University predicted that even low-income families would be spending over $200,000 per child during their years of dependence. It is almost certain that the cost has increased since then.
Fortunately, the government understands that raising children is an expensive lifestyle choice and have introduced a number of benefits to ensure no Australian child will go without.
The main thrust of their support comes in the form of the Family Tax Benefit which consist of two levels – A and B, but there are a number of other options that support this. Here is an outline of what the government offer.
Family Tax Benefit A has the widest application and can be claimed by families who meet the following criteria:
- You meet the prescribed income test levels. At present those with annual income below $52706 can claim the full amount (you’re still entitled to a payment over this amount but on a progressively sliding scale dependent on income and number of children)
- You care for a dependent child at least 35% of the time
- Your child is aged 0-15 or is 16-19 and still in school
- You meet Australian residency requirements
- You meet immunisation requirements for your child (a recent introduction)
The maximum level of Family Tax Benefit A payable per child is $5504 for children up to 12 years of age. For those aged 13 to 19 in fulltime secondary school study the maximum payment per child rises to $6938. You may choose to receive Family Tax Benefit A as progressive payments through the year (usually fortnightly instalments) or as a lump sum at year end once your tax returns have been submitted. You may choose which option you prefer. If you have a child from a previous relationship then the level of maintenance you receive will also affect your entitlement.
You may also be entitled to the Tax Benefit A supplementary payment after the end of the financial year provided your income is below $80,000. The maximum amount of Part A supplement you can receive is $737.70 per child.
Family Tax Benefit B applies to those who are single parents, grandparents, foster parents or caregivers meeting specified care levels or single income families where one parent is fulltime at home. It is dependent on the age of the youngest child being cared for and is also income tested. For those eligible the maximum amount for a child aged 0-5 years of age is $4412. For children aged 5-18 years the maximum entitlement is $3190. An additional supplement of up to $357.70 per family can also be received.
There are several additional options available to families, including assistance for those who have lost a child, had a stillborn birth, or have special needs children. Please check out the website https://www.humanservices.gov.au to determine what you qualify for and to work through the income testing calculations in more detail.
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The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a financial adviser or other finance professional.