What is Family Tax Benefit & is it Taxable Income?

Family Tax Benefit (FTB) is a crucial government payment designed to help Australian families with the costs of raising children. This guide will explore the ins and outs of FTB, including its two main components, eligibility criteria, payment rates, and whether it’s considered taxable income.

What is Family Tax Benefit

Family Tax Benefit is a two-part payment system offered by the Australian government to assist families with the financial burden of raising children. The two components are:

FTB Part A: This is the primary payment, provided per child, and is based on the family’s circumstances.

FTB Part B: This additional payment is designed to offer extra support to single-parent families or families with one main income.

Eligibility for Family Tax Benefit:

To qualify for Family Tax Benefit, you must meet several criteria:

For FTB Part A:

• Care for a dependent child aged 0-15 years, or 16-19 years if they’re in full-time secondary education
• Meet residency requirements
• Pass an income test

For FTB Part B:

• Be a single parent, grandparent carer, or part of a couple with one main income
• Care for a child under 13 years (for couples) or under 18 years (for single parents)
• Meet income requirements

In both cases, you must care for the child at least 35% of the time.

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Payment Rates and Calculations

The amount you receive from Family Tax Benefit depends on various factors:

FTB Part A:

• Your family’s income
• Number of children in your care
• Ages of your children

FTB Part B:

• Your family structure (single parent or couple)
• Age of your youngest child
• Income of the primary earner

Payment rates are regularly updated, so it’s essential to check the Services Australia website for the most current figures.

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How to Claim Family Tax Benefit:

To claim Family Tax Benefit, you can:

• Apply online through your myGov account
• Visit a Services Australia service center
• Call the Family Assistance Line

You’ll need to provide information about your family circumstances, income, and care arrangements for your children.

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Is Family Tax Benefit Taxable Income?

One of the most common questions regarding FTB is whether it’s considered taxable income. The answer is no – Family Tax Benefit payments are not taxable income.

This means you don’t need to declare FTB payments on your tax return, and they won’t affect your tax bracket or overall tax liability.

However, it’s crucial to note that while FTB itself isn’t taxable, your eligibility and payment amounts are based on your taxable income. Therefore, accurate reporting of your income is essential to avoid overpayments and potential debts.

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FAQs