Upper income thresholds for family payments will be paused at current levels for three years until July 2012.
From 1 July 2009 for a period of three years:
- the Family Tax Benefit Part B primary earner income threshold will remain at $150,000;
- the income threshold for receiving dependency tax offsets will remain at $150,000;
- the Baby Bonus eligibility threshold will remain at $75,000 family income in the six months following the birth or adoption of a child (equivalent to $150,000 a year); and
- the higher income free area of Family Tax Benefit Part A will remain constant. For example this means the income limit for a family with two children under 18 will remain around $112,000 until 2012. Each family’s FTB Part A income cut out depends on the age and number of children.
Consistent with indexation of other family assistance payment rates, from 1 July 2009, maximum rates of Family Tax Benefit Part A for children under 16 years will be indexed by movements in the CPI only, instead of linked to male total average weekly earnings (MTAWE). This will save $1 billion over the forward estimates.
What does that mean for you? In 2009-10 the foregone increase will be around $0.35 a week for each child 12 and under; and $0.49 a week for each child aged 13 to 15.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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