Boosting payments for low and middle income families

We understand that many families on low and middle incomes are finding it hard to make ends meet.

This Budget is all about spreading the benefits of the boom to all corners of our country by delivering much-needed new financial relief to families and businesses under pressure.

More than 1.5 million families who receive Family Tax Benefit (FTB) Part A will receive a boost from 1 July next year.

All families that are eligible for FTB Part A will receive an increase:

• Families receiving the maximum rate or part of the maximum rate of FTB Part A with two or more children will receive an extra $600 a year, or an extra $300 a year if they have one child.
• Families receiving the base rate of FTB Part A with two or more children will receive an extra $200 a year, or an extra $100 a year if they have one child.

Two-thirds of families (1.1 million families) paid FTB Part A receive all or part of the maximum rate, and will receive the higher boost of at least $300 per year.

Around one-third of families (460,000 families) receive the base rate of FTB Part A, and will receive at least $100 per year.

Whether a family receives the maximum or base rate of FTB Part A depends on their family income, and the age and number of children they have.

For example each year:

• A family with two children under 12 will receive:
  • $600 boost, up to an income of $78,000
  • $200 boost, with income between $78,000 and $112,000.
• A family with one child under 12, and one aged over 12, will receive:
  • $600 boost up to an income around $85,000
  • $200 boost with an income between $85,000 and $112,000.
• A family with two teenage children:
  • $600 boost up to an income around $90,000
  • $200 boost with an income between $90,000 and $115,000.
• A family with one teenage child:
  • $300 boost up to an income around $70,000
  • $100 boost with an income between $70,000 and $101,000.

Families will receive these increases direct into their bank accounts, helping them to balance their budgets when they need it.

The new assistance will be paid fortnightly for most families and is permanent. For the small number of families who choose to claim FTB A at the end of the year, this boost will be paid together with their end of year payment.

We understand that many working Australians are struggling and feel it is harder for them to make ends meet. For some Australians the cost of electricity, rents and mortgages, and petrol are putting pressure on family budgets.

This increased assistance for low and middle income families is part of the Benefits of the Boom package.

These measures are good for families because it will help them to make ends meet and get ahead. And they're good for our economy because they will help struggling businesses – supporting the retail, manufacturing and other businesses that risk being left behind by the mining boom.

These increases to Family Tax Benefit Part A will cost $1.8 billion over the forward estimates.

Income limits for $600 a year boost for families with two or more children and $300 a year boost for families with one child

Income limits for $200 a year boost for families with two or more children and $100 a year boost for families with one child

Note: income limits are forecast as at 1 July 2013, based on current levels adjusted for expected indexation. Income limits for families with more than 3 children will be higher than stated above.