Several government allowances are available to financially support eligible Australian’s facing financial hardship. Austudy, Bereavement Allowance, Newstart, Parenting Payment, Partner Allowance, Sickness Allowance, Special Benefit, Youth Allowance and Family Tax Benefit are among the key support allowances available.
To be eligible for Austudy, a person must satisfy an activity test, be at least 25 (unless receiving Youth Allowance immediately before turning 25), and be an Australian resident. Waiting periods may apply, including a preclusion period for seasonal workers.
The activity test is satisfied if the person is undertaking qualifying study (this requires a full-time or concessional study load in an approved course) or a full-time Australian Apprenticeship. The person must also satisfy progress rules. A person cannot satisfy the activity test if they are a new apprentice or have completed doctoral study.
A person commits an Austudy participation failure by failing without reasonable excuse to comply with certain Centrelink requirements, or to satisfy the activity test. If the person commits a failure in the same payment period as a previous failure, the failure is not considered a participation failure if it is the person’s first payment period. If the failure is committed during a subsequent period, it is not considered a participation failure if another failure was not committed in the immediately preceding payment period, or the person had acted in accordance with a Centrelink requirement in respect of the failure.
Following an Austudy participation failure, Austudy is not payable until the person undertakes an activity required by, or complies with a direction of, Centrelink in respect of the failure. An eight-week non-payment period applies following repeated participation failures, although Centrelink has discretion not to apply the non-payment period.
Austudy is also not payable while the person is subject to a “multiple entitlement exclusion”. This applies if the person becomes entitled to another payment or scheme referred to in section 578A while receiving Austudy, or is subject to an Assurance of Support. Austudy is also not payable to Community Development Employment Project Scheme (CDEP) participants or armed service widow(er)s who receive a lump sum or weekly payments under section 234(1)(b) of the Military Rehabilitation and Compensation Act 2004 (Cth).
The rate of Austudy varies according to whether the recipient:
•is a member of a couple; or
•has dependent children.
In addition, a special rate is available for long-term income support recipients commencing full-time study or an Australian Apprenticeship.
The Bereavement Allowance is payable for a maximum of 14 weeks after the death of a person’s partner. Where the person is pregnant at the time of her partner’s death, this period may be extended to the end of the pregnancy (when, in the normal course of events, she would become eligible for the Parenting Payment (single) (see “Parenting Payment”).
To qualify for this payment, the person must have been a member of a couple where one partner has died. From 1 July 2009, Bereavement Allowance is payable to persons in same-sex relationships. If the person and their partner were Australian residents when the partner died, no previous residence is required. Otherwise, the person has to have been an Australian resident and in Australia for 104 weeks or have a qualifying residence exemption. Alternatively, a woman can qualify for this allowance if, immediately before the death of her husband, a Wife pension or Partner Service Pension (see pt III Veterans’ Entitlements Act 1986 (Cth)) was payable to her and she was not in Australia at the time of her husband’s death.
The rate of Bereavement Allowance is the same as for the single Age Pension including the Pension Supplement. The rate payable is subject to the pension income or assets test.
To be eligible for Newstart Allowance, a person must be at least 22 and below Age Pension age. The person must:
1 be unemployed (i.e. primarily concerned with finding full-time work, and not significantly engaged in setting up a business or some activity that interferes with their ability to look for, or take up, employment);
2 be an Australian resident;
3 pass the activity test requirements (or not be required to do so);
4 be prepared to enter into an Employment Pathway Plan, and comply with an Agreement in force;
5 not be involved in industrial action involving the person or their trade union;
6 not reduce their job prospects by moving to an area with lower employment rates; and
7 not be enrolled as a full-time student.
The activity test requirements are set out in section 601. The person must show that they are actively seeking and willing to undertake suitable paid work; and that they are complying with any directions from Centrelink or their Job Network Provider to undertake paid work or training.
There are exemptions to the activity test. These include:
•being over 55 and engaged in at least 30 hours a week of approved unpaid voluntary work, or a combination of such work and part-time paid employment;
•attending a training camp for the Armed Forces Reserve (or similar);
•a general special circumstances exemption, including homelessness, major personal crisis, major disruption to their home, temporary caring responsibilities, newly-arrived refugees, etc.;
•unfitness for more than eight hours work due to temporary illness or injury, and unable to undertake another suitable activity;
•an automatic 12-month maximum special family circumstances exemption, such as foster caring, home schooling, and caring for four or more children; or
•a special circumstances exemption including caring for a dependent child with a disability, being subject to domestic violence, extremely high stress due to recent relationship breakdown, the death of an immediate family member and caring responsibilities.
Increasingly, activity test requirements are being modified, rather than a complete exemption being allowed. In addition, people deemed to have a “partial capacity to work” (s 16B) will be required to look for work of up to 25 hours per week, but will be deemed to fully meet the activity test if they undertake 15 hours work per week. This decision will be made following a Job Capacity Assessment (see “Disability Support Pension”).
Employment Pathway Plans are written agreements “negotiated” between Centrelink and a recipient of activity-tested payments. In practice, they are generally negotiated with a Job Network Provider, but must be approved by Centrelink.
Employment Pathway Plans require the person to do things to improve their chances of obtaining employment. These include job training, paid work experience, unpaid voluntary work and applying for a certain number of jobs in a period. Newstart Allowance is not payable until a person signs an Employment Pathway Plan, and a participation failure may result if a person fails to comply with the terms of the Employment Pathway Plan without a reasonable excuse.
Generally, a person must wait seven days from the date of claim before becoming eligible for Newstart Allowance, unless the person transfers from another income support payment within the previous 13 weeks. The waiting period may be reduced or waived because of financial hardship.
In addition, payment may be deferred where the person has liquid assets of more than $5,500 (single) or $11,000 (member of a couple, or with dependent children).
Migrants who entered Australia or became permanent residents after 4 March 1997 must serve a waiting period of 104 weeks, although Special Benefit may be available in some circumstances.
There are also waiting periods for people who get payouts of sick leave, annual leave, long service leave or maternity leave, or have done seasonal work earning more than “average weekly ordinary time earnings” in the six months prior to claim.
Breaches in allowance and payment terms (aka “participation failures”) are set out in division 3A of the SSA Act (s 42AZ). The regime applies to payments with activity test requirements (generally Newstart Allowance, but also for people receiving Youth Allowance, Parenting Payment and Special Benefit).
There are now four possible types of failure:
1 no show no pay failures (s 42C–D);
2 connection failures (s 42E–L);
3 reconnection failures (s 42E–L); and
4 serious failures (s 42M–R).
Centrelink can also impose an unemployment non-payment period.
A person commits a “no show no pay” failure if they:
•fail to do something required by an Employment Pathway Plan, or commit misconduct while participating;
•fail to comply with a serious failure requirement (see “Serious failure”), or commit misconduct while complying; or
•intentionally act in a way that may result in an offer of employment not being made.
It is only possible to commit one “no show no pay” failure per day. The penalty for a failure is the loss of one-tenth of the person’s fortnightly payment. A failure only applies if the person has no reasonable excuse (unless the person commits misconduct), although rules as to what constitutes a “reasonable excuse” have been tightened (see s 42(UA)).
A person commits a connection failure if (without reasonable excuse) they:
•fail to attend a compulsory Centrelink or Employment Pathway Plan appointment; or
•fail to enter into an Employment Pathway Plan; or
•fail to meet a job search requirement or comply with an Employment Pathway Plan requirement; or
•fail to keep or return a job seeker diary.
Two or more connection failures can be committed in a single day. If a connection failure is committed, the person may be required to comply with a reconnection requirement (essentially an opportunity to fix the failure).
A person commits a reconnection failure if they fail to comply with a reconnection requirement without reasonable excuse.
The penalty for a reconnection failure is loss of one-tenth of the person’s fortnightly payment for each business day until the failure is fixed. Further reconnection requirements may be imposed even if the person had a reasonable excuse for committing an earlier reconnection failure.
A serious failure is committed if a person, without reasonable excuse, persistently fails to comply with their obligations, in relation to a participation payment. An eight-week non-payment period applies if a serious failure is committed.
Centrelink may require the person who has committed a serious failure to comply with a serious failure requirement. If the person begins to comply, Centrelink may end the non-payment period.
If Centrelink determines that the person would be in severe financial hardship if required to serve the eight-week non-payment period, the non-payment period can be ended early.
Before determining that a person has committed a serious failure due to persistent non-compliance, Centrelink must conduct a Comprehensive Compliance Assessment to ascertain why the person has committed failures or failed to meet Centrelink requirements, whether the person has employment barriers, and whether the participation requirements are appropriate (see s 42NA SSA Act).
Three failures in any six-month period will automatically trigger an Assessment. At an Assessment, a Centrelink officer will, among other things, consider whether the person would benefit from any additional assistance. Failure to attend an Assessment may result in a connection failure.
If a person is unemployed due to misconduct, or an unreasonable voluntary act, generally an eight-week non-payment period applies. This can be ended early if the person is in severe financial hardship, and is in a specified class of persons (e.g. has an impairment, is homeless, or has a dependent child).
Centrelink may impose a deferment period on a seasonal worker who is “between jobs” (s 633). The length of the period will depend on how long the person worked and how much they earned (see s 16A).
A deferment of 26 weeks may be imposed if a person reduces their own employment prospects by moving to an area with higher unemployment rates without sufficient reason. “Sufficient reason” only applies when the person has moved to a new place of residence to join a family member, or the move is for the purpose of treating or alleviating a physical disease or illness suffered by the person or by a family member, or the move to a new place of residence is due to an “extreme circumstance” (e.g. domestic violence) (s 634(3)).
The rate of Newstart Allowance varies according to whether the recipient:
•is a member of a couple;
•has dependent children; or
•is aged over 60.
Work for the Dole participants may be eligible for an additional payment of $20.80 per fortnight.
A person on Newstart Allowance may also be eligible for Rent Assistance if they pay rent or board (see “Rent Assistance (s 1070–1070Y)”).
The rates are reduced if the recipient (or their partner) has income that brings the recipient above the income threshold. Eligibility for Newstart Allowance is also subject to an assets test.
Parenting Payment (PP) is payable to a person who has at least one child. The parent must be an Australian resident and in Australia at the date of claim.
Parenting Payment (partnered) (PP (partnered)) is paid to a member of a couple where the child is under six years of age, and Parenting Payment (single) (PP (single)) is paid to a single person where the child is under eight years old.
A person may need to pass certain participation requirements if the person’s youngest child has turned six. There are penalties for non-compliance (see “Newstart Allowance”).
The rates of payment and income and assets tests are different for PP (partnered) and PP (single) (see “Rate of payment (ss 503, 1068A, 1068B”).
A “principal parent” is a person responsible for the care of at least one dependent child, that is:
•in the adult’s care, and the adult is legally responsible (whether alone or jointly with another person) for the young person’s day-to-day care, welfare and development; or
•not the dependent of someone else, and wholly or substantially in the adult’s care.
The child can be the PP child of only one person at a time.
Members of a couple are those legally married but not living separately and apart on a permanent or indefinite basis, or those determined to be living in a “marriage-like relationship” with another person (including a person of the same sex). Such persons are generally precluded from receiving PP (single) or, for that matter, any payment at the single rate.
The question of whether two people are not living separately and apart, or are living in a “marriage-like relationship”, is complex and takes account of many factors, with a non-exhaustive list in section 4(3) of the SSA. They include financial aspects of the relationship, the nature of the household, social aspects, any sexual relationship and the extent of the persons’ commitment to each other.
A person applying for, or receiving, PP (single) may be obliged to provide Centrelink with information on their living arrangements and relationship with the other person. Failure to provide the information may lead to refusal, suspension or cancellation of the payment. If the information provided by the person does not establish that the person is single, PP (single) is not payable.
Parenting Payment is also not paid if:
•another person is receiving PP for the same child;
•the person’s partner is receiving PP;
•the person is receiving another social security payment, or payments under another Commonwealth scheme; or
•the person is serving a waiting or deferment period.
Once the youngest child of a Parenting Payment recipient has turned six years old, the person may be required to sign an Employment Pathway Plan. Failure to comply with the Parenting Payment Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance breaches (see “Newstart Allowance”).
There are two rates of Parenting Payment:
•the Parenting Payment – single rate; and
•the Parenting Payment – partnered rate.
The PP (single) rate is subject to the same assets tests as for pension payments. The income test is subject to frequent changes – check with Centrelink for details.
The PP (partnered) rate depends on whether the person’s partner is receiving a benefit. An asset limit applies, which is the same as the pensioner assets test.
This payment is no longer open to new applicants.
The partner of a person receiving a benefit may also receive a Partner Allowance if the partner was born on or before 1 July 1995 and does not have recent workforce experience.
Sickness Allowance is payable to a person aged between 22 years and the Age Pension age; they must be an Australian resident.
To be eligible, the person must be incapacitated for work or study because of sickness or injury that is of a temporary nature so that when the incapacity ends, the person will return to their full-time employment or full-time study. Similarly, if the person was in full-time education and receiving payments under the ABSTUDY scheme prior to the person’s incapacity, the person must be committed to resuming full-time study when the incapacity ends.
Incapacity for work is determined by assessing the extent to which a person’s medical condition limits their ability to engage in paid work.
The rate of the allowance varies according to the person’s age and marital status. The rates are the same as for Newstart Allowance, Partner Allowance, Parenting Payment, and Special Benefit.
Special Benefit is a “safety net” that provides income support for people who do not qualify for another social security payment, and who need financial support.
To be eligible for Special Benefit the person must:
•not be eligible for a pension or benefit under the SSA or a service pension under the Veterans’ Entitlements Act 1986 (Cth);
•not be disqualified from receiving Newstart Allowance:
– due to the person’s involvement in industrial action;
– because they are a seasonal worker moving to a low-employment area; or
– because they failed to comply with the activity test requirements, or they breached other requirements of the SSA;
•not be disqualified from receiving Parenting Payment or Austudy due to a failure to meet a participation requirement;
•not be disqualified from receiving Youth Allowance because of a failure to satisfy the activity test requirements;
•not be serving a preclusion period due to a compensation payment;
•be an Australian resident and unable to financially support themselves due to circumstances beyond their control.
The SSA gives Centrelink discretion to decide whether to recognise a person as “unable to earn a sufficient livelihood” and to determine whether Centrelink should pay them. These decisions are affected by:
•whether they are able to support themselves or receive adequate support from their families;
•the reasons behind their lack of support; and
•the nature and extent of their financial hardship.
A two-year waiting period may apply to Special Benefit applicants who are newly arrived migrants. An exemption applies for holders of a specific class of visas, or where there has been a significant change in circumstances beyond the person’s control.
Typical cases where Special Benefit may be paid include:
•resident children whose parents are not entitled to payments;
•victims of natural disasters;
•individuals who hold Criminal Justice Stay visas or some other temporary or provisional visas;
•new migrants who are ineligible for the Age Pension because they cannot meet the 10-year Australian residence requirement.
These categories are not exhaustive. In some circumstances, Special Benefit is also payable to certain temporary, provisional or bridging visa holders.
Both Centrelink and the Administrative Appeals Tribunal will look at the circumstances of each case (see Appealing government and administrative decisions).
People receiving Special Benefit who are holders of designated temporary protection, humanitarian, and safe haven visas are usually required to meet the activity test from 13 weeks after the visa is granted (see “Newstart Allowance”). People living in isolated areas, some carers, pregnant women, parents, and some people who are temporarily ill are specifically exempt, as well as those covered by the “special circumstances” general discretion.
Failure to comply with the activity test or Special Benefit Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance breaches (see “Participation failures”).
Special Benefit is paid at a rate that does not exceed the rate of Newstart Allowance, Austudy (see above) or Youth Allowance (see below) that the person would receive if they qualified for that benefit.
Centrelink has a discretion to pay Special Benefit at a lower rate. A strict income test applies, so that the rate of payment is reduced by $1 for every $1 of the person’s income. There is no “free income area” for Special Benefit, so any income the person receives reduces the person’s payment by that amount. The rate may also be reduced if the person is in receipt of free rent, board, or lodging.
The assets test for Special Benefit is generally that also used for Sickness Allowance and Newstart Allowance. For a long-term payment of Special Benefit, available funds must be no more than $5,000.
Rent Assistance may also be payable (see “Rent Assistance (s 1070–1070Y)”). Education Entry Payments and Pensioner Education Supplements may also be payable to single parents receiving Special Benefit.
Youth Allowance is divided into two types. One is for full-time students (“Youth Allowance (student)”), and the other for unemployed persons and part-time students (“Youth Allowance (unemployed)”).
The person must be an Australian resident (or exempt resident).
Youth Allowance (student) is payable from 16 to 24. People over 25 may be eligible if they were receiving Youth Allowance as an Australian Apprentice or full-time student before turning 25 and continue in that course or apprenticeship. A person who is 15 may also be eligible for Youth Allowance if they are independent. Exemptions from the full-time study requirement apply.
Youth Allowance (unemployed) is only payable from 16 to 21 and at 22 the person would transfer to Newstart payment.
All Youth Allowance recipients would normally need to pass the activity test.
The activity test is passed if the applicant:
•is undertaking full-time study; or
•is undertaking approved full-time training; or
•is seeking and willing to undertake paid work (if they are not an early school leaver); or
•is a carer of a child and the applicant meets the Secretary’s requirements; or
•is complying with an Employment Pathway Plan, and is either:
– an early school leaver;
– in a class of persons specified by Centrelink; or
– is determined by Centrelink to be taken to satisfy the activity test; or
•if the person complies with a Centrelink notice to do paid work, participate in a program of work or participate in a training program.
A person can be exempted from the activity test for a period if they are temporarily incapacity or unwell.
A person under 22 years old who does not have a Year 12 or equivalent qualification will usually need to do full-time education or training, or do full-time (25 hours a week) or part-time study or training, in combination with other approved activities. If a person under 22 has a partial capacity to work, they may also be eligible for a Youth Disability Supplement.
Payment of Youth Allowance is subject to waiting periods similar to those for Newstart Allowance (see “Waiting periods” under “Newstart Allowance”, above). Failure to meet the activity test or Youth Allowance Employment Pathway Plan may result in a penalty being imposed. The penalties are the same as for Newstart Allowance (see “Participation failures”).
If still at home and a full-time secondary student, then a 16 or 17 year old person will not be eligible for Youth Allowance, unless they are considered independent (see “Independent”).
Young people aged 16 and 17 years old who do not have the equivalent of Year 12 education normally have to do full-time education or training to receive Youth Allowance. However, they may be exempted if one of the following applies:
•temporary incapacity following illness or accident;
•disability or learning difficulties;
•has given birth within the last six weeks;
•have a personal crisis, or is a refugee (in some circumstances);
•part-time work and/or education of at least 20 hours per week;
•losing a job;
•inability to obtain an education place;
•a drug problem;
•inability to undertake full-time study; or
•have agreed to enter into an Employment Pathway Plan.
See section 543A for further details.
For the purposes of determining the correct rate and the application of parental means testing, a young person is classified as: dependent at home; dependent and required to live away from home; or independent.
A young person (that is, someone aged from 18 to under 25) is classified as required to live away from home (s 1067D) if they:
•are not independent;
•do not live at the home of a parent; and
•need to live away from home for education, training or employment, or their prospects are significantly increased if they live away from home.
A young person is independent (s 1067A) if they:
•are an orphan;
•are a refugee not wholly or substantially dependent on someone else and without a parent living in Australia;
•are self-supporting due to an employment history as defined in the legislation;
•have an employment history as defined in the legislation, are unsupported, and are disadvantaged in relation to employment or education;
•are or have previously been married, in a registered relationship, or in a de facto relationship for a year;
•have a dependent child;
•have parents who cannot exercise their responsibilities;
•are in state care; or
•cannot live at home, due to extreme family breakdown, serious risk to physical or mental well-being due to violence, sexual abuse or other unreasonable circumstances, lack of stable accommodation; and are not receiving continuous support, whether financial or other, from a parent, guardian, or the state;
•have a partial capacity to work (Youth Allowance (unemployed) only);
•are 22 years old or over and are studying full time.
Youth Allowance is paid subject to:
•the parental and personal means test (if the person is not independent); or
•the personal means test (if the person is independent and single); or
•the partner and personal means test (if the person is independent and a member of a couple).
The parental means test applies to young persons who are not independent, including those required to live away from home. From 1 July 2015, the rate reduces by 20 cents for every $1 the parent’s income exceeds $50,151. There is also an asset test and family actual means test. The test which produces the lowest payment is applied.
Under the personal income test, Youth Allowance for full-time students is reduced as income increases. However, the first $7,710 of a merit and equity based scholarship is exempt. A job seeker can earn $143 per fortnight and a student or Australian apprentice $427 per fortnight without affecting the rate. The rate of reduction after that changes frequently; contact Centrelink for specific rates.
Youth Allowance is not payable if the assets value (parental or partner plus personal) exceeds the amounts set out in section 547C. These limits increase twice a year.
Most students in receipt of Youth Allowance (student) will also receive the Student Start-up Scholarship, worth a maximum of $2,050 per year (paid in two instalments). A fares allowance may also be paid.
Youth Allowance (student) recipients who are required to live away from home for their full-time studies may in some circumstances be eligible for a Relocation Scholarship of $4,269 for their first year, and a reduced amount for further years (with the amount varying depending on their circumstances). However, if moving from one major city to another, the relocation scholarship is not payable.
Both the carer and the person being cared for must be Australian residents. To get Carer Allowance:
•the carer must provide care on a daily basis in a private home, except during (temporary) hospitalisation or respite periods;
•the person cared for must have a disability or medical condition that requires care for the next 12 months, or is terminal.
There are different rules for caring for a child under 16 years old, or a person over 16.
For a person aged 16 or over:
•the person receiving care must have a score of at least 30 under the Adult Disability Assessment Tool (ADAT) (see “Carer Payment”) being figured out on the basis of a professional questionnaire score of at least 12;
•the person receiving care must be a family member or someone Centrelink-approved; and
•if the care provider and receiver do not share the same private home, the care provided must be either at the home of the carer or the person being cared for a total of at least 20 hours per week. Also, the care they provide must relate to the bodily functions, or sustaining the life of the care receiver.
A carer may be eligible for up to two Carer Allowance (adult) payments, if they care for two disabled adults. Carer Allowance may be shared between two carers with Centrelink approval, but is not payable to more than one member of a couple.
To get Carer Allowance for a person under 16 years old, you must have a dependent child under 16 years of age who qualifies as a disabled child.
A “disabled child” is a child who has a physical, intellectual or psychiatric disability which is permanent, or will continue for an extended period. The child must receive daily care and attention in a private home that is the residence of the carer and the care receiver, and must have a prescribed disability, or the carer must be given a qualifying rating of “intense” under the Disability Care Load Assessment (Child) Determination (DCLA). Such a rating may be given to a carer who cares for two disabled children (whose disabilities do not individually qualify) provided the combined special care needs are at a significant level when measured by the DCLA.
Qualification for Carer’s Payment in relation to children under 16 for whom constant care is provided may automatically be entitled to Carer Allowance.
The Carer Allowance is a flat rate of $121.70 a fortnight and is not subject to either an income or an assets test. In addition, an amount of $1,000 is paid annually to a person receiving Carer Allowance for each child being cared for under 16 years.
Carer Allowance may be paid in addition to an income support payment.
This allowance is available to people with a disability aged 16 years or over who cannot use public transport without substantial assistance and who have to travel to work, volunteering, training, etc. The rate is $9.80 per fortnight (if you have combined volunteer and work time of 32 hours per fortnight) or $128.40 (if you are on Disability Support Pension, Newstart Allowance, Youth Allowance or Parenting Payment and are working 15 hours per week).
A person qualified for social security pension, benefit or allowance, or Family Tax Benefit A (FTB(A)) at greater than the base rate, may qualify for additional Rent Assistance.
The assistance is payable to a person only if they pay at least $114 per fortnight (or $185 per fortnight if a couple with no children). The assistance is not payable to a person who pays rent to state housing. The amount of the Rent Assistance varies according to the amount of rent paid, increasing until the maximum Rent Assistance rate is reached.
Special rules apply to single sharers, people who pay board and lodging, or those who live in a retirement village. Special rules also apply if the person is under 21 and receiving a Disability Support Pension.
Rent Assistance is not paid if the person is under 25 without dependents and living in the parental home while receiving Newstart Allowance.
Rent Assistance is paid as part of another payment and may be reduced due to the income test applicable to that payment.
A person may be eligible for a payment in particular crisis situations if they are in severe financial hardship and have just come out of prison or psychiatric confinement (of at least 14 days’ duration), are recently homeless in some situations (such as domestic violence), if they have just arrived in Australia on a humanitarian visa, or another reason in the legislation applies. These claims must generally be made within seven days of the crisis occurring.
To be eligible for Family Tax Benefit (FTB) an adult must have at least one “FTB child” and either be an Australian resident, or hold a Special Category or prescribed visa.
FTB Part A (“FTB(A)”) is a payment per child and is affected by income tests which assess the income of the family.
FTB Part B (“FTB(B)”) is a per family payment that provides extra assistance to mainly single-income families, or families where the one parent is on a low income. The income test operates differently to the FTB Part A test.
An FTB child is generally under 16, where the adult is legally responsible for the child’s day-to-day care, and the child is in the adult’s care and living in Australia or with the adult. Persons aged 16– 19 may also be an FTB child if in an adult’s care and living in Australia or with the adult and doing full-time secondary study (the maximum age for FTB is 19 from 1 January 2013). 16 to 17 year olds who have completed year 12 or equivalent can also be an FBT child. Rent Assistance can be paid with FTB(A).
At 30 June 2015, more than the base rate of FTB(A) and (B) can generally be paid for only six weeks of a temporary absence from Australia. In some circumstances, the base rate of FTB(A) can be paid for three years of temporary absence from Australia. However, the length of the recipient’s last return to Australia, or type of visa held, may affect entitlement to FTB while absent from Australia.
FTB can be paid as a fortnightly payment, as a reduced tax instalment, or as a lump sum paid at the end of the financial year. There is no assets test for FTB(A) or (B).
Only one member of a couple caring for an FTB child can be paid the FTB. If the parents are separated, FTB can be divided between both parents depending on the proportion of care each provides for the child. However, if the level of care provided is less than 35%, the child is not taken to be a FTB child of that care provider.
To receive more than the base rate of FTB(A) for children of a previous relationship, reasonable action to obtain child support must be taken. Blind pensioners are exempt from the maintenance action test.
The rate of payment depends on the age of the child. For for FTB(A) for a child under 13 years, the rate is $5,336.30 per year, aged 13–15 years is $6,723.30 per year, aged 16–19 years is $6,723.30 per year. The rate of FTB(B) for under five years is $4,274.15 per year, and 5–15 years is $3,091.55.
FTB(A) is subject to an income test. The rate of FTB(B) also depends on the age of the child; either 0–4 years or 5–18. Once income exceeds the threshold, the rate of FTB(B) is reduced by 20 cents for every $1 of income above this amount.
FTB(A) includes a supplement amount payable if the tax return information for a financial year is provided within the relevant timelines, and the child has met immunisation and health check requirements. FTB (B) includes a supplement amount payable after the end of the financial year.