Family Tax BenefitFamily Tax Benefit Part AThe <strong>Australian</strong> Government’s Family Tax BenefitPart A helps families with the cost of raisingchildren. Families who are entitled to Family TaxBenefit Part A may also receive extra assistancethrough the Large Family Supplement, MultipleBirth Allowance and Rent Assistance. FamilyTax Benefit Part A may be paid to families whohave a dependent child aged under 21 years ora qualifying dependent full-time student aged 21to 24 years.The amount of Family Tax Benefit Part A you canget depends on your family’s income. For the2006-07 financial year, to get the maximum rateof Family Tax Benefit Part A, your family incomemust be $40,000 or less. Payments are reducedby 20 cents for each dollar above $40,000 untilthe base rate is reached. It is paid at this leveluntil your family income reaches $88,622 (plusan extra $3,504 for each dependent child afterthe first child). If your family includes onechild aged under 18 years you can earn up to$94,718 before your yearly entitlement endsentirely.To be eligible for Part A, your dependent childmust be aged under 21 years, or a qualifyingfull-time student aged 21 to 24 years. The childor student must not:• receive a pension, or labour market relatedpayment or allowance such as YouthAllowance, or• be aged five to 15 years and not studyingfull-time, and their yearly income is more than$11,548 (for the 2006-07 financial year), or• be aged 16 to 24 years and their yearlyincome is more than $11,548 (for the 2006-07financial year), or they are receiving aPrescribed Education Scheme payment such asABSTUDY.Family Tax Benefit Part BFamily Tax Benefit Part B provides extraassistance to single parent families and twoparent families with one main income whereone parent chooses to stay at home or balancesome paid work with caring for children. Ahigher rate of Family Tax Benefit Part B is paid ifyour youngest child is aged under 5. Family TaxBenefit Part B may be paid for a dependent childaged under 16 years or a qualifying dependentstudent up to the age of 18 years who doesn’tget Youth Allowance or a similar payment.For the 2006-07 financial year, to receive themaximum rate of Family Tax Benefit Part B, yourfamily’s lower income earner can earn $4,234before payments are affected. Earnings above$4,234 reduce your entitlement by 20 centsfor each dollar earned over this amount. Youstill get some Family Tax Benefit Part B if yourearnings are no more than $21,572 and youryoungest child is aged under five years. Ifyour youngest child is aged between five and18 years (who doesn’t get Youth Allowance ora similar payment) you can earn up to $16,790and still get some Family Tax Benefit Part B.Single parent families always get the maximumrate of Family Tax Benefit Part B, according tothe age of their child.Entitlement of foster carers to Family TaxBenefitAs a carer, your entitlement to Family TaxBenefit Part A and Part B depends on a numberof factors, including your family’s income andwhether the care is considered ‘formal’ or‘informal’.<strong>Foster</strong> care subsidies and allowances paid bystate or territory governments are not countedin the income test for Family Tax Benefit. Aswell, the <strong>Australian</strong> Taxation <strong>Of</strong>fice does notconsider these allowances as assessable incomefor tax purposes.For more information about Family Tax Benefit,income and taxation, phone the FamilyAssistance <strong>Of</strong>fice on 13 6150, or visit thewebsite at www.familyassist.gov.au.Important: It is a good idea to contact theFamily Assistance <strong>Of</strong>fice before you claim FamilyTax Benefit to make sure that the circumstancesrelating to each case are taken into accountwhen decisions are made about paying FamilyTax Benefit in foster, relative or kinship caresituations.Family Tax Benefit and formal care‘Formal care’ is where the change of care islegally approved and involves a change inlegal responsibility for a child in care (whetherday-to-day and/or long term). As a foster,relative or kinship carer, you need to confirmwith Centrelink your responsibility for a child byproviding documents from a state or territorychild welfare authority or a court, for example,the Family Law Court. These documents fromthe state and territory authority, or the courtorder, set out your legal right or responsibility tocare for the child.In formal care situations, Family Tax Benefitis paid from the date the child first enters intoyour care for the relevant dates provided insupporting documentation. If the child movesfrom your care to another carer, the Family TaxBenefit ‘follows’ the child and is paid to the newcarer from then on.Documents that the Family Assistance <strong>Of</strong>ficeneeds from you may include:• an original letter on the official letterheadof the state or territory child welfareauthority, which provides details of the child’splacement with you and the approved dates ofplacement, or20
• the relevant court orders, if available. If thecourt orders do not name you as the carer, aseparate letter from the child welfare authoritymay be needed linking you with the child.Example 1: Simon is removed from the care ofhis mother, Denise, by a state authority and isplaced in temporary foster care with Tracey.The next day, the <strong>Children</strong>’s Court orders thatSimon remain in the care (legal responsibility)of the state welfare authority for two months.Tracey provides a letter from the authoritystating Simon is to remain in her care for thosetwo months. Tracey is therefore eligible forFamily Tax Benefit from the date the courtmakes its order.Example 2: Brianna, aged 15, entered the careof a state welfare department on 1 October.On 3 October the <strong>Children</strong>’s Court made thefollowing orders:• that legal responsibility for Brianna beallocated to the Minister (that is the state orterritory government Minister responsible forchildren’s welfare issues) until Brianna turns18• that the Minister be responsible for residence,financial and contact arrangements, and• that Brianna’s mother be responsible forreligious matters and that she take sharedresponsibility with the Minister for medical,educational and training arrangements.Based on the court orders, the Minister gainedlegal responsibility for Brianna and her careis ‘delegated’ to a foster carer. Family TaxBenefit for Brianna is paid to the carer from 3October. If, later on, Brianna moves into thecare of another foster carer, Family Tax Benefitis paid to the second carer from the date thecare arrangements change. In this situation,Brianna’s mother cannot get Family Tax Benefit.Family Tax Benefit and informal care‘Informal care’ is a private arrangement betweenthe parent and another party, where there isno change to any form of legal responsibility.Informal carers are usually grandparents,other relatives, or family friends. Under thesearrangements, whether Family Tax Benefit canbe paid to the new carer depends on whetherthe care is temporary and short term, orongoing.When it is clear that the child will be in ongoingcare with you as the new carer, Family TaxBenefit is paid from the date the child entersyour care. However, in informal, but temporaryand short term care situations, the question ofwho gets paid Family Tax Benefit depends onthe care arrangements and how long the childspends out of the parent’s care.Care that is temporary and short termWhere possible, Family Tax Benefit should bepaid to the person who has the actual care ofa child. However, in some cases, a parent whodoes not have the care for a child will continueto get Family Tax Benefit ― for example, whenthe change of care is temporary and short termAND the intention is that the child will returnto the parent within a short time. However,in all but very special circumstances, the totaltemporary and short term absence should notbe more than four weeks. After this, the actualcarer should get the Family Tax Benefit.If a state or territory agency organises a child’splacement but does not have legal responsibilityfor the child, it is considered informal care. Thisoccurs when parents have respite or place thechild in respite or short term care, and mayinclude placements in the care of grandparentsor relatives.Example 1: Belinda has two young children.One of the children has a severe disability. Thestate government helps to arrange two weeksof respite care for that child so that Belinda canhave a break. Belinda continues to get FamilyTax Benefit for both children as she has legalresponsibility for the children.Example 2: Terri is a single parent of her12-year old son Jack. Terri has to go into21
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