Family Tax Benefit Changes

The Government has proposed a number of changes around Family Tax Benefits, including:

maintaining the 1 July 2014 maximum and base rates of Family Tax Benefit (FTB) Part A and the rate of FTB Part B for two years. These payment rates would resume indexation on 1 July 2016;

tightening eligibility around the number of children that can increase the upper threshold for payments of FTB Part A from 1 July 2015; and

reducing the primary earner income limit from the current $150,000 per annum to $100,000 per annum from 1 July 2015.

Disability Support Pension Proposals

Effective date: Immediately and 1 January 2015

The Government has proposed over the next 5 years to review Disability Support Pension (DSP) recipients under the age of 35 who were granted the benefit between 1 January 2008 and 31 December 2011. These recipients will be assessed against the current rules.

Recipients who are deemed to be eligible to continue to receive DSP will be obligated to “complete a programme of activities to build their work capacity” unless they are deemed to be severely disabled, defined as having a capacity to work of less than 8 hours a week. Where the claimant does not complete the programme of activities, they will be subject to sanctions.

Reduced Eligibility to Newstart Allowance & Sickness Allowance

Effective date: 1 January 2015

In the Budget, the Government has proposed increasing the eligibility age for Newstart Allowance and Sickness Allowance from age 22 to age 24 for new claimants from 1 January 2015.

In addition, from 1 January 2015 all new claimants of Newstart Allowance (and Youth Allowance) who are under 30 years of age must undertake and participate in appropriate job search and employment services support for six months before receiving payments. The six month period may be reduced where the claimant has prior workforce participation.

After six months, they will be required to undertake Work for the Dole for 25 hours per week to receive income support unless they are the principal carer of a child, are a part-time apprentice or are undertaking education.

Indexing Pension and Other Payments by CPI

Effective dates:

1 July 2014 for Parenting Payment Single recipients

1 September 2017 for Bereavement Allowance and pension payments such as Age Pension, Disability Support Pension; Carer Payment and Veteran’s Affairs Pension

Currently these payments are indexed in line with whichever is higher from the increases in the CPI, Male Total Average Weekly Earnings or the Pensioners & Beneficiary Living Cost Index. The CPI is normally lower than the other two measures, so by enacting this change it will result in a reduction in the rate of increases in these pensions over time.

Pausing Eligibility Thresholds for Australian Government Payments for Three Years

Effective date: 1 July 2014 for non-pension payments and 1 July 2017 for pension payments

The Government proposes to freeze the income and asset eligibility thresholds for three years. Non-pension payments include Family Tax Benefit, Child Care Benefit, Child Care Rebate, Newstart Allowance, Parenting Payments and Youth Allowance. Major pension related payments include the Age Pension, Carer Payment, Disability Support Pension and the Veteran’s Service Pension.

Resetting the Assets Test Deeming Rate Thresholds

Effective date: 20 September 2017

The Government proposes to reset the deeming thresholds used for measurement of income from financial products when assessing eligibility for welfare payments to $30,000 for singles and $50,000 for couples. Currently for singles financial assets up to $46,600 are deemed at 2% and above this level at 3.5% whilst for a couple the threshold is $77,400.

Termination of Federal Funding of Certain State and Territory Pensioner and Seniors Concessions

Effective date: 1 July2014

The Government has proposed the termination of the National Partnership Agreement on certain concessions for Pensioners Concession Card and Seniors Card Holders.

Concessions that could be affected include rebates made available to pensioners for council/land and water rates, utilities including energy and sewerage, motor vehicle registration and public transport.