Media Release by The Hon Jenny Macklin MP

Lodge a tax return or risk losing family benefits

Australians receiving a Family Tax Benefit (FTB) need to lodge their tax returns for 2008-09 to make sure they have been paid their correct family entitlements. Families who fail to lodge their tax returns risk having their family payments temporarily suspended or cancelled after a persistent failure to lodge.

It’s estimated that around 45,000 families have not lodged an income tax return for 2008-09 and need to act now to ensure on-going FTB payments continue as usual, or risk a suspension of their payments.

Under changes introduced in January this year, families currently receiving FTB who do not lodge their 2008-09 tax returns by the end of January 2011 will face a temporary suspension of their fortnightly instalment payments.

This temporary suspension will occur more than 18 months after the end of the 2008-09 financial year.

Families who are not required by the Australian Taxation Office to lodge a tax return need to get in contact with the Family Assistance Office to inform them of their status.

Suspending payments for FTB recipients who fail to lodge a tax return was introduced by the Government to encourage people to keep their tax affairs up to date and reduce debt and fraud.

As part of its changes, the Australian Government also introduced a ‘three strike rule’ for families who persistently fail to lodge their tax returns. Under the ‘three strikes rule’ the third failure to lodge their tax return will result in cancellation of their FTB without a further grace period.

Under the ‘three strike rule’, around 2,300 people will miss out on their FTB entitlement from today. They will be able to reclaim FTB as fortnightly instalments if they lodge their outstanding tax returns or fully repay their ‘non-lodger debt’ to the Family Assistance office. A non-lodger debt consists of the entire FTB amount a family has been paid for the period they have not filed a tax return.

It is in families’ interests to lodge their tax returns so that the Family Assistance Office can accurately reconcile their FTB entitlement and calculate whether or not they have received too little or too much FTB.

This week the Family Assistance Office will be calculating the debt owed by families yet to lodge their 2008-09 tax return and will send notification letters. Families have 75 days grace from the date of the letter to either lodge their tax return or pay the non-lodger debt in full before their payments are suspended.

Since January 2010, this measure has encouraged more than 18,000 families who hadn’t lodged their income tax returns for 2007-08 or a previous year to do so, so that they could continue to receive Family Tax Benefits.

For further information, contact the Family Assistance Office on 13 61 50 or visit Family Assistance Office website.