Statement 1: Budget Overview (Continued)
Supporting families — helping with costs of living
The Budget provides a range of measures to help with the costs of living, building on major initiatives introduced since the Government came to office in 2007 such as the $46.7 billion of personal income tax cuts since 2008‑09; the increase in the Child Care Rebate from 30 to 50 per cent; the Education Tax Refund; and Paid Parental Leave.
The measures in this Budget provide extra support and more timely and flexible assistance for families.
Supporting families with teenagers
The Government will provide $771.9 million over five years in new support for families, through an improvement in the adequacy of FTB Part A for dependent 16 to 19 year olds in full time secondary study. This measure will simplify assistance and remove the choice between Youth Allowance and FTB for the majority of families with 16‑19 year old children.
The rate of FTB Part A for dependent 16 to 19 year olds in full time secondary study will be increased to equal the rate for 13 to 15 year olds. This will increase the level of FTB Part A support provided by up to $4,208 a year for 16 and 17 year olds, and up to $3,741 a year for 18 and 19 year olds. This will help families to meet the costs of older children, and to support their teenagers to stay in school.
Improving the Low Income Tax Offset
The Government is changing the way the LITO operates to provide more timely relief to low‑ and middle‑income earners, and to reward participation in the workforce. An individual on an income of $30,000 will receive an extra $300 during the year as a result of this measure, to provide assistance when it is needed. The measure will bring around $1.4 billion of tax assistance into 2011‑12 and assist more than 6.5 million low‑ to middle‑income taxpayers.
Taxpayers eligible for the LITO currently receive one‑half of the benefit during the year through the PAYG withholding schedule, with the rest received on assessment of income tax returns. The Government is increasing the proportion recipients receive during the year to 70 per cent.
Enhancing the Education Tax Refund
The Government is committed to helping families meet cost of living pressures by expanding assistance provided to parents and carers of school‑aged children through the Education Tax Refund (ETR). The ETR provides valuable help by assisting parents and carers with expenses such as computers, stationery and textbooks.
The Government is extending the ETR to cover school uniform expenses at an estimated cost of $460 million over four years. From 1 July 2011 the extension will cover expenditure on uniforms which are required or otherwise approved by a school, including optional school uniforms, and sports or physical education uniforms.
More flexible access to family payments
The Government will provide families in receipt of FTB Part A with more flexible access to their entitlement, to assist them meet these unexpected expenses as they arise.
- From 1 July 2011, families will be eligible for an advance of up to 7.5 per cent, up to a maximum of $1,000, of their annual FTB Part A entitlement, at any time throughout the year. Advances will be repaid over six months by direct deductions from future FTB payments.
Families will also continue to be able to apply to receive an advance of around $160, paid every six months from a date of the recipient's choosing and repaid by reductions in their FTB Part A payments through the rest of the six month period.
More flexible child care rebate payments
The Government is giving parents greater choice about when and how they receive their child care payments.
- From 1 July 2011, families will be able to choose to have their Child Care Rebate paid at the time they incur child care costs. For most families, this will mean they will receive their Child Care Rebate payments fortnightly or weekly.
The option of more regular Child Care Rebate payments will reduce the upfront costs of care and make it easier for parents to manage the family budget.
Families will also be able to choose to have their Child Care Rebate paid directly to their child care provider as an immediate reduction on their bills or continue to receive the Rebate as a direct payment. This ensures families can choose the payment arrangements that work best for them.
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