Changes to Centrelink FTB 2016Dealing with Centrelink isn’t high on most peoples enjoyment list. The system is complicated and hard to navigate at the best of times, let alone trying to keep up with changes.

The Government recently announced a number of changes that have somewhat flown under the radar. I’ve checked them out for you and summarised what it all means.

*Note: All information outlined below has been obtained from publicly available documents found on the Department of Human Services website. Please discuss your individual situation with Centrelink if you believe you may be affected. 

What are the changes to Centrelink and Family Tax Benefit (& what do they mean for me)?

centrelink changes

Change in income cut off for end of year FTB A supplements

At the end of each financial year, families recieving FTB A were eligible for supplements of up to $726.35 for each child. This was paid once your payments had been balanced and Centrelink had checked for overpayment. The income test was the same for the supplement as it was for fortnightly payments and was based on the number of children you had, their ages and your family income.

The new changes that were recently announced mean that NO supplements will be paid for any children where the household income (both parents combined) is over $80,000 before tax.

In Centrelink’s words:

“FTB Part A supplement is now subject to an income test of $80,000. The supplement will be paid to eligible customers from July 2017 after we balance their family assistance payments. If your family’s income for the 2016-17 financial year is over $80,000, you won’t get the supplement.”

Single income family supplement

The payment of up to $300 a year will not be paid to any new customers. Existing customers may continue to receive the payment but you’ll need to check your individual circumstances with Centrelink.

In Centrelink’s words:

Single Income Family Supplement is a payment of up to $300 per financial year. It won’t be paid to new customers after 30 June 2017. If you’re eligible for Single Income Family Supplement at 30 June 2017, you may keep getting the payment as long as you stay eligible.”

Parental leave/ Dad & partner pay leave

These payments will now be added on as part of your assessable income for income support payments. Note there is no change in how they are assessed for FTB.

The income limit for Dad and Partner Pay will also stay fixed at $150,000 until at least 1st July 2020.

In Centrelink’s words:

“If you get Parental Leave Pay or Dad and Partner Pay for a child born or adopted on or after 1 October 2016, it will count as income when we assess you or your partner for an income support paymentIn addition, the current income test limits for Parental Leave Pay and Dad and Partner will remain fixed at $150,000 until 1 July 2020.”

Changes to how taxable income is assessed

These changes affect those who salary sacrifice. Your taxable income will now include 100% of the grossed up value of any reportable fringe benefit unless your workplace is a charity or other excluded organisation. Talk to Centrelink about what this will actually mean for your payments as it will vary on a case by case basis.

In Centrelink’s words:

The way we assess reportable fringe benefits is changing. This forms part of your adjusted taxable incomeThis may affect your eligibility or payment rate for:

  • Family Tax Benefit
  • Child Care Benefit
  • Stillborn Baby Payment
  • Parental Leave Pay
  • Dad and Partner Pay
  • Assistance for Isolated Children Scheme
  • Youth Allowance
  • ABSTUDY Living Allowance

If you or your child get any of these payments, we’ll let you know how this change affects you and what you need to do.”

Pauses to indexation

Indexation is a technique used to adjust income payments based on inflation in order to maintain the same purchasing power of those payments after inflation. Effectively it means that you can buy the same thing with X amount of money one year to the next. It is designed to ensures that a family whose income goes up by only the amount of inflation (and therefore is not actually able to do any more with the money they receive as other costs rise at a similar rate) isn’t disadvantaged by losing out on payments.

The Government has paused indexation on a number of payments for several years now, effectively meaning families are receiving less that they were a few years ago. They have recently announced that this will continue until the 1st of July 2020 for the following payment cut offs.

  • FTB Part A higher income free area, which is currently $94,316
  • FTB Part B primary earner income limit, which is currently $100,000

In Centrelink’s words:

“We won’t increase the following until 1 July 2020:

  • FTB Part A higher income free area, which is currently $94,316
  • FTB Part B primary earner income limit, which is currently $100,000

Read more about the income test for FTB Part A and Part B.”

School Kids bonus

This change was actually implemented in July but as the next payment wouldn’t have been due yet, many people are not aware of it.

The final payments of the school kids bonus was paid in July 2016 and no further payments will be made. This means families will lose out on $215 for each primary school aged child and $428 for each secondary school aged child. Ouch!

In Centrelink’s words:

FTB changes: FTB Part A supplement is now subject to an income test of $80,000.  The supplement will be paid to eligible customers from July 2017 after we balance their family assistance payments.  If your family’s income for the 2016-17 financial year is over $80,000, you won’t get the supplement.”  

If you believe these changes may affect you and you’re unsure of what it means, you can read more about them here or contact Centrelink directly.

Will these changes make a big difference to your family?

More budget advice for families:

Image: Top – Getty / Middle – Centrelink