Govt Re-Jigs Family Tax Benefits Again

The Turnbull Government has restructured its controversial changes to the Family Tax Benefit payments but the replacement legislation is still not a surety to be passed by the Opposition.

The Government introduced legislation in the Parliament on Wednesday that amends the 2014 Budget FTB measures after its first attempt in the 2013-14 Budget failed in the Senate.

Minister for Social Services, Christian Porter, said the Government was committed to helping Australian families in a generous but sustainable welfare system.

“These reforms will give families greater on-going day-to-day financial assistance and will help ensure children get the best possible start in life,” Porter said.

“These measures will replace the unlegislated 2014-15 FTB measures including maintaining FTB rates, limiting FTB-B to children under six years of age and maintaining eligibility thresholds.

“Single parents and grandparents with children over the age of 13 will receive an FTB-B payment of $1000 a year.”

From July 2016, all eligible families with a youngest child under one year will receive an extra $1000 a year through an increase to their FTB-B standard rate.

In addition, from 1 July 2018, for families with a child aged up to 19 years, the maximum rate of FTB-A will be increased by about $10 per fortnight.

“Significantly, we’re also increasing the fortnightly rates of Youth Allowance and Disability Support Pension so they’re aligned with the new FTB-A rate,” Porter said.

Porter said the money saved by phasing out the supplements would be redirected to increasing fortnightly payments and providing more affordable child care.

“We believe our new package of reforms strikes the right balance between equity and sustainability,” he said.

However, the Greens have already flagged they will not be supporting changes that still affect vulnerable families.

“I urge the Government to pursue budget saving measures that focus on the big end of town. There are viable alternatives that could generate savings without attacking struggling single parents,” Greens spokesperson on families, Senator Rachel Siewert, said.

Independent Senator Nick Xenophon told the ABC that the new legislation “is clearly a moderation of their previous position, which was incredibly harsh”.

“I note that they've changed the benefits or the reduction of benefits from six to 13, what I call the Macaulay Culkin Home Alone clause,” Senator Xenophon said.

“But there are some measures to it that I'm concerned about. ACOSS is saying that kids will go below the poverty line in relation to this and it needs to be looked at holistically.”

Shadow Minister for Families and Payments, Jenny Macklin, said she had concerns about the new legislation but the Labor Party would consider them in detail before deciding on whether to support the changes.

Welfare peak body, ACOSS, has urged against looking for budget savings in family payments for single parents and low income couple households, and advanced an alternative reform proposal.

“On our numbers a low income single parent family with two children will take a hit of more than $60 per week or $3000 per year over time once their youngest child turns 13, due to the reduction in Part B and the withdrawal of end of year supplements. We cannot support this,” ACOSS CEO, Dr Cassandra Goldie, said.

“Single parents and their children have already been hit hard with cuts over the last few years which have reduced their safety net significantly.”

Goldie said there are over 600,000 children living below the poverty line and children in single parent households are in poverty at over twice the rate of children living with two parents.

“The proposed changes will also hurt low income couple households, including those without paid work. The $5 per week increase to Part A will not offset the losses for these families,” she said.

“We are also disappointed that the proposed package does nothing to address the gradual erosion of family payments as a result of indexation to prices.

“The lack of indexation to wages since 2009 has already resulted in a cut of approximately $20 per week per child in family payments for families on the lowest incomes.”