Re-entering work is also simpler because your finances are “individual” when the gummint doesn’t
recognise your family.

Great discussion by the way.

What happens if you’re in a same-sex relationship with kids btw? Are you allowed to access this stuff or don’t you count as a “family”?

But as Zoe says, if you want it throughout the year (which many families do, because most kids tend to want to eat daily, rather than one big feast when the tax return arrives!) you have to accurately estimate your income for a whole year.

Because it’s yearly, there’s also the problem that I mentioned in the post about major increases to income mid-way through the year. You not only lose your entitlement from the time your income went up; sometimes it can be enough of an increase that you have to pay back money that you were actually entitled to during the first half of the year.

That’s where a lot of the confusion comes in surely – it’s called a “tax benefit” but you don’t get it with your tax return – effectively it’s delivered through the welfare system with the same “shoot first, ask no questions” tactics Centrelink uses for everything else…

The worst ‘debt’ case I came across were parents who in mid-september 2004 were sent a FTB cheque for $1,500 then in December 2004 were sent a letter saying they had to repay $3,000 in FTBs. I found the timing of these events interesting especially as the $1,5000 was sent based on the tax returns they had lodged and not on estimates.

One trouble I’m having with this series of comments is that I’m coming across as a supporter of FTB B. Personally, I don’t like it, although I am in favour of horizontal equity measures. FTB B is just poorly put together IMHO.

(1) They did. But only the one time (as far as I know). Unfortunately, that figure found its way into an OECD report and has since been cited many times. I had assumed it was that figure that people were talking about in relation to Australia’s poor participation rate for women with children compared to other OECD countries.

(2) When the income test was changed for FTB a couple of years back, they wound down the taper rate from 30% to 20%, and increased the allowable income considerably. If you look at the effect this had on disposable incomes in couples, you will find that one and a bit income households do better than single income households, for household incomes up to about $50K. Prior to that, the incentive was more toward single income. Of course, at high enough incomes, the tax advantage of two incomes overwhelms FTB B. Then there are childcare costs, but that’s a different tale.

(3) No.

The FTB(A) has lots of problems all of its own, mostly due to having to estimate the income for the year, leading to overpayments. Like all welfare payments, there can be disincentives to work over-time etc. when you are close to one of the cut-offpoints, due to EMTRs. But as it’s based on household income, it makes little difference which parent earns the money.