Without a doubt, raising a family costs a lot of money. For this reason, the Australian government has put together the Family Tax Benefit program to help families adjust to the ever-increasing costs of living. Despite the benefits of the program, however, numerous misconceptions exist that prevent people from claiming the benefit that the law entitles them to.
Consider whether you have ever heard any of these top five myths about Australia’s Family Tax Benefit. If so, you can ignore them.
1. The Family Tax Benefit Is a One-Size-Fits-All Solution
When some people hear about the Family Tax Benefit, they think it is a solution with a one-size-fits-all approach. In reality, there are two types of these benefits, Part A and Part B. Each one meets different family needs and qualifiers. With Part A, the government determines payment based on your family’s unique circumstances. For Part B, the biggest factors to consider are your family’s annual income over a full financial year as well as the number of children you have. With that said, Part A also includes the calculation of income. It fits differently, though.
2. Income Does Not Matter
In some situations, individuals believe that anyone can qualify for Australia’s Family Tax Benefit. However, this is not the case. On the contrary, only families that feel below certain annual income thresholds can claim the benefit. As such, income certainly does matter. For example, in 2019-2020, the Family Tax Benefit for each child was $59.78 every two weeks, based on the Part A payment plan. That amount does not necessarily determine the minimum Family Tax Benefit rate. Rather, your family’s unique circumstances can both increase or decrease the ultimate Family Tax Benefit rate.
3. There Is Only One Payment Option
No families are the same. As such, it makes sense that different households choose different approaches when it comes to budgeting. Because of this, having only one payment option to receive the Family Tax Benefit might cause some financial stress for some families. Fortunately, this is not the case. When it comes to receiving your Family Tax Benefit, you may opt to receive it one of two ways. You may choose to receive your payment every two weeks, or you can accept it as one lump sum at the end of the financial year. If you choose the latter, the payment goes through the tax system.
4. Maximum Family Tax Benefit Amounts Never Change
When you are having a hard time paying your family’s bills, it may seem like the amount of government assistance that you can receive never changes. Fortunately, this is not really the case. If you have ever heard that Family Tax Benefit maximum amounts never change, this simply is not true. In actuality, the Australian government makes updates to your Family Tax Benefit on the first day of July every year. Rates often change depending on numerous factors.
5. The Family Tax Benefit Pays People To Have Children
Although Australia’s Family Tax Benefit has helped millions of families across the country, there are still many opponents to the program. One reason for this, in particular, is due to the personal belief that the government should not have a role in financially supporting individual citizens. One misconception that has developed as a result of this belief is that the Family Tax Benefit “pays people to have children.” In contrast, the benefit follows requirements that not only encourage self-sufficiency but also further encourage the payment of child support responsibilities.
After reading this list, how many of these common misconceptions about the Family Tax Benefit have you heard? Remember, if you are unsure about how it works, using reliable government and organization websites is the best way to learn accurate information about the program.