Media Release by Senator the Hon Kay Patterson

More Help for Families

Joint Media Release with:

  • The Hon Peter Costello MP, Treasurer of the Commonwealth of Australia

Australian families will benefit from increased family assistance worth $19.2 billion over five years under the Government’s More Help for Families package. The package will help families with the cost of raising children, improve rewards from work and help balance work and family responsibilities.

The measures in the 2004-05 Budget build on the substantial reforms to family assistance in The New Tax System in 2000 and, before it, through the Family Tax Initiative announced in 1996.

The package includes the following elements:

  • an increase in the rate of Family Tax Benefit (FTB) (A) of $600 per child to be paid as a lump sum upon reconciliation of entitlement following the end of the financial year, commencing in respect of the 2003-04 financial year. The annual lump sum will be available, if required, to offset any overpayment of FTB that may have occurred during a previous year;
  • in order to provide an immediate benefit, a lump sum payment of $600 per child will be paid before 30 June 2004 to all families receiving or eligible for FTB(A) in the 2003-04 financial year:
    • this means eligible families will receive $600 per child before 30 June 2004 and be entitled to a further $600 per child after the reconciliation of their 2003-04 entitlement. As a consequence most families will be eligible for an additional $1,200 per child in the next 12 months;
  • a reduction in the income test taper rate for the maximum rate of FTB(A) from 30 per cent to 20 per cent, with effect from 1 July 2004. This builds on the reduction of the taper from 50 per cent to 30 per cent undertaken in The New Tax System. This will improve work incentives for low and middle income families, in particular, as it means that for each additional dollar of income in this range, only 20 cents rather than 30 cents of FTB(A) is withdrawn;
  • more than doubling the income test threshold for FTB(B), so the secondary earner in a family can earn $4,000 a year (currently $1,825) before the benefit is reduced. The income test taper is also being reduced from 30 per cent to 20 per cent:
    • this will improve rewards from work for families where a second earner wants to take up or increase part time or casual work (often a mother returning to work after having a child), providing additional assistance for those combining work and family responsibilities;
    • it, too, builds on the income test relaxations for FTB(B) in The New Tax System;
  • mothers returning to work after the birth of a child will also be assisted by the quarantining of FTB(B) payments. This means that the income they earn after returning to work will not affect FTB(B) received earlier in that year; and
  • the introduction from 1 July 2004 of a new Maternity Payment, paid as a lump sum, of $3,000 for each new born child. This will be a universal payment to all families (usually the mother). This payment will increase to $4,000 from 1 July 2006 and increase again to $5,000 from 1 July 2008. This new payment will incorporate the existing Maternity Allowance and the Baby Bonus, with the Baby Bonus still available for births prior to 1 July 2004.

These measures demonstrate the Government’s ongoing commitment to helping families.