Media Release by Senator the Hon Kay Patterson

Families win $24 a fortnight increase in family tax benefit payments

Around 400,000 families will get an average $24 a fortnight boost to their Family Tax Benefit Part A (FTB A) payments from 1 July 2006 as part of the 2005-06 Budget.

The boost is the result of an increase in the lower income threshold level to help low income families earn more money.

The Minister for Family and Community Services, Senator Kay Patterson, said the lower income threshold for FTB A would be increased by $4,139 to $37,500 to allow low income earners to increase their earnings without affecting family assistance payments.

“To assist families, the Government will invest an extra $1.1 billion over four years,” Senator Patterson said.

“The threshold increase, at a cost of $788.3 million over four years, will assist lower income families, particularly those with family members returning to work, by increasing the amount of earnings they can have before their family assistance is affected. This substantial benefit adds to the Howard Government’s already unprecedented levels of support for Australian families.

“It will not only put more money in the pockets of low income families, but will also play a significant role in the Government’s welfare-to-work policies. This measure is a key part of a total Budget package aimed at removing the barriers, which are keeping welfare recipients out of the paid workforce.

“The threshold increase will also result in more families becoming eligible for a Health Care Card. It is expected that 40,000 families will become newly eligible for the Health Care Card, and its many benefits, at a cost of $327.1 million over the three years from 1 July 2006.

“For the 2005-06 financial year, family payments are reduced by 20 cents for each dollar earned above $33,361 a year until the base rate is reached.

“From 1 July 2006, however, families will be able to earn up to $37,500 without their FTB payments being reduced.

“This important change builds on the nearly $17 billion paid in family assistance in 2003-04 and the $22 billion extra assistance announced last year, including the 30 per cent child care tax rebate, a $300 increase in FTB Part B and the introduction of the Maternity Payment which will increase to $4,000 next July,” Senator Patterson said.