Government assistance for families
“Tax-time” is often a good time to check out the government support provided to parents that’s designed to offset the considerable cost of raising our children.
Most families will get some Government support in the form of tax breaks or direct payments. Many of the financial payments are “means tested” (determined by your household’s income level), but they can add up to a significant amount of money; very helpful when you’re raising a family and managing a tight household budget.
Government support for parents includes the Baby Bonus, 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 Department of Human Services service centre, between 8am and 8pm Monday to Friday, or call 13 61 50 or go to the Department of Human Services website.
Department of Human Services service centres are located in Centrelink Customer Service centres, Medicare offices and Tax Office shopfronts – and a new online claim service is available for certain claims.
- This information is of a general nature and should not be relied upon to prepare your application to the Department of Human Services and/or 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.
- General Information
- Family Tax Benefit Part A
- Family Tax Benefit Part B
- Large Family Supplement
- Baby bonus
- Paid parental Leave
- Maternity Immunisation Allowance
- Child Care Benefit
- Child Care Tax Rebate
- Other benefits
- Medicare benefits for families
- School Kids Bonus
1. General Information
Becoming a Centrelink customer – when 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 overestimate 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, i.e, 1 July to 30 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 Depart of Human Services 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.
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. Note the information here is a guide and your personal circumstances may be different, so you’ll need to check directly with the department of human Services or your tax accountant.
To be eligible for this benefit you will need to be:
- The main carer of your child for at least 35% of the time.
- The carer of a child under the age of 21 (up to 24 years if a full time student). Your dependent children aged 16 to 20 must participate in full time study in order for the family to be eligible for Family Tax Benefit Part A.
- 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. You can get more details about Family Tax Benefit Part A payments and rates online.
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 DHS website, visit a DHS Centre 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 DHS/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 – From 1 July 2012, you won’t be able to access Family Tax Benefit as fortnightly instalments if:
- you underestimated your income for two consecutive financial years and
- when your income was confirmed by the Australian Taxation Office, it was found you had no entitlement in those years.
You may still be able to get annual payments at the end of the financial year if you lodge a claim.
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.
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 main carer of your child for at least 35% of the time.
- 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 DHS website, visit a DHS Service Centre or call 13 61 50 to request that a form is mailed to you.
From 20th March 2012 a new income test will apply. 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 secondary income earner can earn around $4,891 per annum before their FTB Part B payment is affected and payments reduce on a sliding scale until a cut-off of around $24,9212,000 for those with a child under five, or around $19,382 for those whose youngest child is aged five to 18.
For more information, contact the DHS Service Centre on 13 61 50 or visit the DHS website.
You can receive this as a fortnightly payment or claim as a lump sum as after lodging your annual tax return.
NOTE – You cannot receive Family Tax Benefit Part B while you or your partner is receiving the Paid Parental Leave payment.
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 Department of Human Services.
5. Baby Bonus
The Baby Bonus is paid to families following the birth (including stillborn babies) or adoption of a child. To be eligible you must fit the following criteria:
- be the primary carer of a dependent child (or the partner of the primary carer)
- have care of the child within 26 weeks of the birth and be likely to continue as carer for at least 26 weeks
- not have received or be receiving Parental Paid Leave for the child
- meet Australian residency requirements
- Your family’s combined income must be less than, or equal to, $75,000 for the period of six months from the date of the birth, or six months prior to an adopted child entering into your care.
How much is the Baby Bonus?
Until the 31st August, 2012 the Baby Bonus payment will be $5,437, paid in 13 fortnightly instalments. The Baby Bonus is not taxable or considered income for DHS or Social Security purposes.
From September 1, 2012 the Baby Bonus will be $5000 and will be paid in 13 fortnightly instalments. The first payment will be larger than the subsequent payments.
NOTE – You cannot claim the Baby Bonus if you are claiming the Paid Parental Leave entitlement.
Read in more detail about the baby bonus here
What if I’m having twins?
The Baby Bonus is based on the number of children you have. So, in the case of twins or triplets, you can claim the Baby Bonus for each child or you could claim a combination of Baby Bonus and Paid Parental Leave.
How do I claim the Baby Bonus?
You can make your claim online at the DHS website, or by visiting your local DHS service centre. You can lodge your claim up to three months before the birth, and you must lodge it no later than 52 weeks from the day after the child’s birth.
6. Paid parental Leave:
The Paid Parental Leave (PPL) scheme for new parents, who are the primary carers of a child born or adopted on or after 1 January 2011, is available for new parents to access.The scheme will provide a parent of a child born or adopted from a payment equivalent to the Federal Minimum Wage, currently $589.40 a week, for a maximum period of 18 weeks (June 2012).
In most cases, the person will receive the payment through their employer. Alternatively, it may be paid direct to you from the Department of Human Services.
To be eligible for the PPL scheme, the primary carer must be in paid work and have:
- Been engaged in work continuously for at least 10 of the 13 months prior to the expected birth or adoption of the child
- Undertaken at least 330 hours of paid work in the 10-month period (an average of around one day of paid work a week)
An income test of $150,000 will apply based on the primary carer’s adjusted taxable income in the previous financial year.
The scheme is available to employees, casual workers and self-employed individuals.
Eligible families can choose whether to participate in the scheme depending on their individual circumstances. Families electing to participate in the scheme will not receive the Baby Bonus (except in multiple birth cases) or Family Tax Benefit Part B during the 18-week PPL period.
You can use the DHS online calculator to help work out which payments will be best for your circumstances.
7. Maternity Immunisation Allowance
From July 1, 2012 the Maternity Immunisation Allowance is no longer available. It was originally Maternity Immunisation Allowance established as part of the commitment by the government to increase the rate of childhood immunisation in Australia. It was not income tested and was available to all eligible applicants.
From January 1, 2009 to June 30, 2012, the allowance is paid as 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.
Here are the criteria to be eligible for this payment up to June 30, 2012. Your child must be:
- Up to date with immunisation (with proof e.g. 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 did not claim the Baby Bonus. If you did not receive the Baby Bonus you will need to apply for the Maternity Immunisation Allowance through the Department of Human Services. You’ll need to either visit a DHS service centre (these are within Centrelink) or call 13 61 50 and you can ask to have the Maternity Immunisation Allowance form sent to your home. – NOTE this payment is no longer available after June 30, 2012.
If you’re already received the Baby Bonus from the DHS and you have provided your child’s Medicare details to them, Centrelink will link directly to the Immunisation Register and make this payment automatically after your child has had their 18-month immunisation and again prior to their 5th birthday. If not, you will need to provide a record of your child’s immunisation status. This will all need to occur prior to the 30 June 2012.
- This payment is not income or assets tested.
- You cannot claim this payment through the tax system.
- If your child turned two before 1 Jan 2009, you will make one claim, which must be made before their second birthday. For children who turn 2 after the 1st January 2009, you will make two claims, one before your child’s second birthday and the second claim before your child’s fifth birthday.
8. Child Care Benefit
Child Care Benefit is a payment to help families who use approved and registered childcare. Child Care Benefit is income-tested.
Types of care that may be covered by the Child Care Benefit scheme include:
- Long day care
- Family day care
- Occasional day care
- Outside school hours care
- Vacation care
- Pre-school and kindergarten
- It may also help cover the cost of child care provided by grandparents, relatives, friends or nannies.
Note – Check with your child care service to find out if they are an approved provider, or go to mychild.gov.au, or call the Child Care Access Hotline, on Freecall 1800 670 305, between 8.00 am and 9.00 pm, Australian Eastern Standard Time
To be eligible for CCB you must:
- Use approved or registered care
- Be an Australian resident living in Australia or meet other residency requirements
- Your child must be up to date with their immunisation (or has approved exemption)
- 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.
- Meet the income test (Approved Care only)
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 Department of Human Services 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 DHS website for an estimate.
- Care provided by family, friends or a nanny for work related childcare as long as they are registered with the Australian Government Department of Human Services
- Some private pre-schools and kindergartens
- 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 Department of Human Services service centre (note – you must claim within 12 months of the service). You can only claim Child Care Benefit for registered care if you are looking for work, working, training, or studying at some time during the week in which you use child care or have an exemption from that requirement. The current (June 2012) registered care rate for a non school-aged child in up to 50 hours of care per week is $0.632 per hour, or $31.60 per week.
9. 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 childcare, regardless of their income. The Rebate will cover up to 50% of the “out of pocket” childcare costs incurred, for approved childcare. You will need to have applied for CCB to be regarded as eligible, 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.
How do I receive the Child Care Rebate?
There are a number of ways you can receive the Child Care Rebate:
- directly to your Child Care Benefit – approved child-care service, fortnightly (or in many circumstances weekly) or
- directly to your bank account, fortnightly (or in many circumstances weekly) or
- by quarterly payment to your bank account or
- by annual payment to your bank account (this payment option only available if you receive your Child Care Benefit for approved child care as a lump-sum payment).
NOTE – You are not eligible for the Child Care Tax Rebate if you are using Registered Care for your childcare arrangements.
Get more information about the Child Care Rebate.
10. 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:
This payment is both income and asset tested. You need to contact the Department of Human services and register your intent to claim the Parenting Payment. To be eligible to claim the Parenting Payment you must be:
- single and care for at least one child aged less than eight, or
- have a partner and care for at least one child aged less than six.
There are a number of other requirements, so contact your local DHS service centre for more information.
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 each fortnight.
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 childcare.
11. 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. You must 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.
2012 Medicare Safety Net Rates
When you have spent over $413.50 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 $598.80 for families eligible for Family Tax Benefit Part A and around $1198 for other families.)
12. Schoolkids Bonus
For those families with older kids, from January 2013, the Schoolkids Bonus will replace the Education Tax Refund that was previously claimed through the tax system.
You will need to be eligible for Family Tax Benefit Part A to be able to receive this new payment.
2011-2012 Financial Year
If you’re eligible, the one-off Education Tax Refund payment will be automatically paid into your nominated bank account. You don’t need to make a claim or call us.
The payments will be made from 20 to 29 June 2012. You will receive up to $409 for each child in primary school and up to $818 for each child in secondary school.
From 1 January 2013, families receiving Family Tax Benefit Part A will receive:
- up to $410 for each child in primary school
- up to $820 for each child in secondary school.
The Schoolkids Bonus will be automatically paid to eligible families in two separate instalments each year – half in January and half in July. It will be paid automatically and upfront, which means:
- you don’t need to keep receipts for education expenses
- no separate claim is required.