Payments for people with children

Contributed by Danny Shaw and Dianne Anagnos and current to 1 September 2005

PARENTING PAYMENT

There are two parts to the parenting payment:

• parenting payment (single), paid to single people with dependent children
• parenting payment (partnered), paid to a person who is a member of a couple with dependent children.

Who is a dependent child?

To qualify for a parenting payment a person must have what the Social Security Act calls a ‘PP child’ (s.500D). This means that the claimant must have at least one child who is both:

• dependent on them; and
• under 16.

A person may qualify for the payment whether the child is their natural or adoptive child, or where there is a Family Court Order which has the effect of making the person the child’s legal guardian.

Parenting payment (single)

Parenting payment (single) used to be called the sole parent pension. It can be paid to a person who:

• is not a member of a couple;
• has at least one dependent child; and
• has been an Australian resident continuously for 104 weeks, or arrived as a refugee or under a special humanitarian program.

A person may qualify for the payment immediately if they became a single parent since becoming an Australian resident. Recipients are entitled to the pensioner concession card.

Parenting payment (partnered)

Parenting payment (partnered) may be paid to a person:

• who is a member of a couple
• who has at least one dependent child
• who has been an Australian resident for two years, unless they have a qualifying residence exemption.

Recipients are entitled to the health care card.

Conditions of payment

Parenting payment (single) is paid on pension conditions. Both partnered and single parenting payments are subject to the allowance assets test.

This means that no payment can be made if the person’s assets exceed the assets test threshold (however the hardship rules may apply in certain situations (s.1131)).

Participation requirements

Participation requirements vary according to the age of the youngest child in the care of the recipient.

YOUNGEST CHILD UNDER SIX

Parents whose youngest child is under six do not have any activity test requirements.

YOUNGEST CHILD BETWEEN SIX AND 12

Parents whose youngest child is between six and 12 are required to attend a once-a year interview with Centrelink, and complete a non-enforceable participation agreement.

YOUNGEST CHILD BETWEEN 13 AND 16

Parents whose youngest child is between 13 and 16 are required to undertake either:

• a maximum of six hours of agreed activities a week (averaged over a six-month agreement period); or
• a total of 150 hours of agreed activities over the six-month period.

A person will not be required to enter into an agreement unless they have been continuously on income support payments for six months. Exemptions are available for some parents (s.501A).

Parents in this category can be breached for not complying with the requirements of a participation agreements.

FAMILY TAX BENEFIT

Family tax benefit, which is administered through Centrelink’s family assistance offices, was introduced from 1 July 2000, and effectively merges a number of former social security entitlements and tax rebates.

There are two primary components of family tax benefit:

• family tax benefit A
• family tax benefit B.

ELIGIBILITY

The eligibility criteria for the two components differ slightly, but for both payments a person must have an ‘FTB child’ and satisfy the residence rules.

The FTB child

For family tax benefit A, an FTB child is:

• a child under 16 for whom they are legally responsible, or
• a dependent full-time student aged up to 24 who is not receiving youth allowance, abstudy or another social security payment in their own right.

Family tax benefit B can also be paid for a dependent full-time student, but only up to the age of 18 (Family Assistance Act ss.21, 22, 22A).

Residence qualifications

To be eligible for either benefit, the person must:

• be an Australian resident; or
• hold a special category visa; or
• hold a specified temporary visa (class 309, 310, 447, 451, 820, 826, 785 and 786) (s.21(1A)).

TEMPORARY ABSENCE FROM AUSTRALIA

The maximum rate of family tax benefit can be paid for up to 26 weeks of a temporary absence from Australia.

The minimum rate of family tax benefit can be paid up to three years of a person’s temporary absence (ss.24, 62, 63, 63A).

PARENTS OR CARERS NOT LIVING TOGETHER

Family tax benefit can be shared with someone else who is not the person’s partner. The rate payable to each person depends on the percentage of time that the child is in each person’s care. Family tax benefit cannot be paid to a person who provides care for less than 10% of the year (s.59).

Action to obtain child support

To be paid more than the base rate of family tax benefit A, a person must have taken ‘reasonable action’ to obtain child support or maintenance (FTB rate calculator, Schedule 1).

There are exemptions to this rule, which should be discussed with the Centrelink social worker.

Child support payments affect the rate of family tax benefit A but not family tax benefit B.

HOW THE BENEFIT IS ASSESSED

Family tax benefit A

Family tax benefit A is paid for each child or dependent student, and can consist of up to five parts:

• a component for each child or student
• rent assistance
• a large family supplement
• a multiple birth allowance
• a multiple birth payment.

Family tax benefit B

Family tax benefit B is paid per family – the amount is the same regardless of the number of children or students in the family.

HOW THE BENEFIT IS PAID

Fortnightly payment

If a person receives a social security pension or benefit, or a Veterans’ Affairs service pension, their family tax benefit is not income tested and their entitlement is paid fortnightly.

A person who does not receive one of these payments can also choose to be paid fortnightly, on the basis of an estimate of their own (and their partner’s) income for the current financial year.

WHERE THE ESTIMATE IS INCORRECT

If a person is paid family tax benefit on the basis of an income estimate that proves to be lower than their income (and their partner’s) as assessed by the Australian Tax Office at the end of the tax year, they are required to repay any excess. If the person overestimates their income, they receive back pay.

Yearly payment

If the person does not make an estimate and does not receive fortnightly payments of family tax benefit, they can claim at the end of the tax year on the basis of the Australian Tax Office’s assessment of their (and their partner’s) income, through the tax system.

PAYMENT THROUGH THE PAYE TAX SYSTEM

Family tax benefit can also be paid as an offset to PAYE tax deductions.

MATERNITY PAYMENT

Maternity payment is a lump sum, nontaxable payment for each child born (or stillborn) or adopted. The income and assets test is the same as for the minimum family allowance rate (Family Assistance Act 2001 (Cth) s.36).

Maternity allowance is a one-off payment of $3,042.00.

Claims

Maternity payment can only be paid if a claim is made within 26 weeks of the child’s birth or adoption. The applicant must also qualify for family tax benefit within 13 weeks of the child’s birth.

MATERNITY IMMUNISATION ALLOWANCE

Maternity immunisation allowance is a one off payment of $213.60.

Eligibility

A person can be paid maternity immunization allowance where:

• the child in respect of whom the payment is made has been fully immunised; and
• either
– maternity allowance has been paid; or
– the person is receiving family tax benefit for a child over 18 months.

Maternity immunisation allowance is payable for stillbirths and children who die before they turn two, obviously without the immunization requirements.

Time Limits

For the allowance to be payable:

• a claim must be lodged before the child’s second birthday; and
• the immunisation requirements must be fulfilled on or before the child’s second birthday.

Exemption from the Immunisation Requirement

A person can be exempted from the immunization requirements where:

• the person has a conscientious objection to having their child immunised; or
• there are medical reasons for not having the child immunised.

Concession cards

Centrelink issues three types of card that give the holder a number of concessions for government and some private sector services for expenses such as prescription medicines, dental and optical treatments, ambulance services, transport and domestic utilities. The cards are:

• the pensioner concession card
• the commonwealth seniors’ health card
• the health care card

The eligibility criteria, validity and concessions offered vary for each card.

The pensioner concession card, which offers the most comprehensive benefits, is automatically issued to all recipients of:
• Centrelink and Department of Veterans Affairs pensions
• carer payment and parenting payment (single)
• mature age and bereavement allowances.