More money in the pockets of Australian families

More than two million Australian families are set to benefit from indexation increases to family payments next month.

On 1 July the maximum fortnightly rate for Family Tax Benefit (FTB) Part A will increase by $4.34, which is an extra $113.15 a year, bringing the yearly amount to just over $4292 a year for each child under 13.

For parents of a child aged between 13 and 15, the maximum fortnightly rate of payment will increase by $5.60, which is an extra $146 a year, bringing the yearly amount to just over $5580 for each child.

For families receiving FTB Part B, the fortnightly rate will increase by $3.64, which is an extra $94.90 a year, bringing the yearly amount to $3650 where the youngest child is under five.

For families where the youngest child is between five and 18 the fortnightly rate of FTB Part B will increase by $2.53, which is an extra $65.70 a year, bringing the yearly amount to $2544 where the youngest child is between five and 18. FTB Part B is paid per family.

Families receiving FTB are also eligible for an end of year supplement of about $726 per child for FTB Part A, and about $354 per family for FTB Part B.

From 1 July the Baby Bonus, paid in 13 fortnightly instalments, will increase by $143 to $5437 for families of newborn babies and adopted children. The Government is also giving families more of their Baby Bonus upfront with new arrangements from 1 July.

These increases reflect the 2.7 per cent increase in the Consumer Price Index (CPI) to December 2010.

The indexation of payments reflects the cost pressures faced by parents as they pay the bills and balance the family budget.

As well as increasing family payments, more than one million Australians on part-rate pensioners will benefit from increases in the income test and assets test free areas.

These include people receiving the Age Pension, Carer Payment, Disability Support Pension, Parenting Payment Single, Wife Pension and Widow B Pension.

Certain pension thresholds and income and assets test free areas and cut offs are adjusted in line with CPI figures.

This means a part-pensioner will be able to earn more income or own more assets before their pension is reduced.

The income free area will increase by $4 to $150 a fortnight for a single pensioner and by $8 to $264 a fortnight for couples.

The pension assets test free area for a single homeowner will increase by $5,000 to $186,750, and for a homeowner couple combined, by $7,000 to $265,000. Assets other than the family home are included in the assets test.

The full list of changes is available from Rates Indexation July 2011