Family Tax Benefit, Child Care Rebate and Paid Parental Leave: What the changes mean to you
Thursday, March 20, 2014/
Amendments to a bill currently before Parliament have made changes that affect many people. These concern the Family Tax Benefit, the Child Care Rebate and how the Paid Parental Leave scheme is administered.
The Social Services and Other Legislation Amendment Bill 2013 was originally introduced on 20 November 2013, and was amended in the House of Representatives in December 2013.
The bill was passed by the Senate in early March this year with many amendments. The House of Representatives has now agreed with all but two of those amendments (they concern the Paid Parental Leave scheme – see below).
Amendments made in the Senate defer the commencement of several measures in the bill in light of its delayed passage:
Family Tax Benefit and eligibility rules – from 1 May 2014 (not 1 January 2014 as originally proposed), Family Tax Benefit Part A will be paid to families only up to the end of the calendar year in which their teenager is completing school. Exemptions will continue to apply for young people who cannot work or study due to physical, psychiatric, intellectual or learning disability.
Pension Bonus Scheme – from 1 July 2014 (instead of 1 March 2014 as originally proposed), the bill will end late registrations for the closed Pension Bonus Scheme. The scheme provided a tax-free pension lump sum bonus if they chose to defer their pension to continue in working. The scheme was closed in 2009, although eligible people (ie those of age or service pension age) who were not registered in the scheme at the time of its closure have still been able to backdate their registration in the scheme if they qualified for the relevant pension before 20 September 2009, but have deferred its receipt and kept working. Eligible people have had four years to backdate their registration, and will still have until 1 July 2014 to register in the scheme.
Age Pension: Period of Australian working life residence – with effect from 1 July 2014 (instead of 1 January 2014 as originally proposed), Age pensioners, and other pensioners with unlimited portability, will be required to have been Australian residents for 35 years during their working life (in place of the current 25-year requirement) in order to receive their full means-tested pension if they choose to retire overseas or travel overseas for longer than 26 weeks. Pensioners will also be paid on their own individual working life residence rather than that of their partner or former partner. Pensioners who are living overseas immediately before 1 July 2014 will continue to be paid under the previous rules unless they return to Australia for longer than 26 weeks and leave again, after which the new rules will apply.
Indexation of benefits – commencement of proposed changes has been delayed from 1 March 2014 to Royal Assent of the Bill. The bill will extend the indexation pauses on certain higher income limits for a further 3 years until 30 June 2017. This means that:
- the Family Tax Benefit Part B primary earner income limit and the parental leave pay and dad and partner pay individual income limits will each remain at $150,000; and
- the current higher income-free area for FTB Part A will also remain at the current level set depending on the number and ages of the family’s children e.g. the income cut-out for a family with two children aged under 13 will remain at around $113,000.
Story continues on page 2. Please click below.
Forget marketing, the secret to business success is being well-liked Ian Whitworth Scene Change co-founder
Why brick-and-mortar will drive e-commerce by turning stores into distribution centres Brenton Gill Radaro managing director
Play, refine and grow: How I started a successful shoe business with just $100 Sarah Nally Sienna Baby founder
How we created an engaging online course with a 91% completion rate Emma Green Your CEO Mentor co-founder
Flexible working is all the rage, so here are six tips to help you get started Alison Michalk Quiip founder
Four tips for playing the long game in business, from Victoria's Small Business Woman of the Year Fiona White Own Body founder