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Does My Income Affect My New Partner’s Family Tax Benefit?

We received a valid and interesting question recently about Family Tax Benefit which we thought we’d share with you, as it is relevant to a lot of modern, blended families:

I don’t have any children myself and I don’t feel I should be responsible for the costs of looking after my partner’s kids from a past relationship. However, he’s told me that since we moved in together he has to report my income as well and he’s going to lose all the FTB Part B he used to receive. Is this correct?

The simple answer is yes – your income is taken into consideration, and the new assessment may result in FTB Part B no longer being paid.

Family Tax Benefit Parts A and B are payments available through Centrelink to assist families with the costs of caring for children. FTB Part A and Part B are both income tested, although the thresholds are different for each. The ‘family income’ is taken into consideration, regardless of whether both adults are parents of the children.

A family could have a single earner on a salary up to $150,000 and receive the maximum rate of Family Tax Benefit Part B, and yet if you’re both working Family Tax Benefit B reduces as soon as the secondary earner earns more than $5,183 per year, so a hypothetical ¬†family with one partner earning $60,000 and the second partner earning $40,000 would receive no FTB Part B. This stems from the fact that Family Tax Benefit Part B is intended to assist families who choose to have a parent staying home to care for their children.

If you’d like further advice about the impact your changing relationship circumstances may have on your Government benefits and taxation, please call 1300 622 422 to speak with Michelle Mulligan, or contact us online.

 

 

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