Schoolkids Bonus

A new cash payment will help 1.3 million Australian families with children at school to help make ends meet.

Each year, families will receive a new Schoolkids Bonus worth:

• $410 for each child in primary school
• $820 for each child in high school.

This new guaranteed payment will help the families of 2.2 million school kids pay for uniforms, books, school excursions, stationery and other costs like music lessons and sports registration fees.

Because the payment is automatic and upfront, it means:

• Parents don’t need to keep receipts for months and months – it’s a guaranteed payment.
• Parents will receive the full amount every time, so families won’t miss out if they lose receipts.
• Parents don’t have to pay out of their own pocket, then wait months to get paid back – the payment will be paid upfront, twice a year, before the start of Term 1 and Term 3.
• No paperwork is required.

The payment will replace the Education Tax Refund from 1 January 2013. Under the existing system, 1 million families aren’t claiming what they’re entitled to – either claiming less than the full amount, or claiming nothing at all. That’s 80 per cent of eligible families.

Replacing the old system with this new payment means one million families will receive more cash – a typical family will get more than $720 extra each year. [ 1 ]

We understand that low and middle income families are finding it tough to make ends meet. This new payment will give parents help to balance the family budget. It provides financial support upfront, which means they’ll have money when they need it most.

Just like the Education Tax Refund, the Schoolkids Bonus will be available to families receiving Family Tax Benefit Part A plus young people in school receiving Youth Allowance and some other income support and veterans’ payments.

As part of the transition to the new Schoolkids Bonus, the Education Tax Refund for 2011-12 will be paid out in full to all eligible families as a lump sum payment in June.

This means families will receive their full Education Tax Refund entitlement ahead of tax time – so parents won’t have to worry about keeping receipts or making claims when they do their tax this year.

The Gillard Government is delivering a surplus with targeted and responsible savings while staying true to the things we have always stood for like helping low and middle income families to make ends meet.

The new Schoolkids Bonus will cost an additional $2.1 billion over five years including 2011–12. This is on top of the $4.3 billion already allocated for the Education Tax Refund over the same period.

Legislation to enable these changes and to allow for the June payment will be introduced into Parliament this week. Prompt passage of this legislation is required to finalise arrangements for the 2011-12 tax year.