The Australian government has implemented significant changes to Family Tax Benefits (FTB) starting March 2025, affecting thousands of families across the nation.
These reforms aim to better support low and middle-income families while ensuring the system remains sustainable for future generations. Let’s explore what these changes mean for Australian families and how they might impact your household budget.
A Brief History of Family Tax Benefits in Australia
Family Tax Benefits have been a cornerstone of Australia’s family support system for decades.
Originally designed to ease the financial burden of raising children, the system has evolved through various governments to address changing economic conditions and family structures.
The March 2025 changes represent one of the most comprehensive overhauls in recent years, reflecting the government’s response to rising living costs and changing family dynamics across Australia.
Key Changes to Family Tax Benefit Part A
Family Tax Benefit Part A (FTB-A) provides financial assistance to families with dependent children, with payment rates based on family income, number of children, and their ages. The March 2025 reforms have introduced several important modifications to this benefit.
Increased Payment Rates
The base rates for FTB-A have increased significantly, providing much-needed relief for families struggling with the rising cost of living.
For children under 13 years, the maximum fortnightly rate has increased to $287.86, up from $209.51 in the previous financial year. For children aged 13-15, the maximum rate is now $374.92 per fortnight, representing a 15% increase from previous levels.
Revised Income Thresholds
Income thresholds determining eligibility have also been adjusted to account for wage growth and inflation. The base income threshold before payment reduction begins has increased to $61,500 per annum.
Families can now earn more before their payments start to reduce, with the taper rate remaining at 20 cents per dollar over this threshold.
Additional Supplements
The annual FTB-A supplement has been retained but restructured. Families will now receive a standard supplement of $896.30 per child at the end of the financial year, provided they meet certain conditions including having up-to-date immunizations and completing tax returns within the required timeframe.
Changes to Family Tax Benefit Part B
Family Tax Benefit Part B (FTB-B) provides extra assistance to single parents and families with one main income. The March 2025 changes have substantially reformed this benefit.
New Single Parent Supplement
Perhaps the most significant change is the introduction of a dedicated Single Parent Supplement of $433.20 per fortnight, available to single parents with children under 16.
This represents a recognition of the unique financial challenges faced by single-parent households in today’s economy.
Adjusted Payment Rates for Partnered Families
For partnered families where one parent stays home or works part-time to care for children, the maximum FTB-B rates have been adjusted based on the youngest child’s age:
- For families with a youngest child under 5 years: $206.15 per fortnight
- For families with a youngest child aged 5-18 years: $144.34 per fortnight
Modified Income Testing
The income test for FTB-B has been reformed to encourage workforce participation while still supporting families with care responsibilities.
The secondary earner income threshold has increased to $7,900 per annum before payments begin to reduce. Above this threshold, payments reduce by 30 cents for each dollar earned.
Eligibility Criteria Under the New System
To qualify for Family Tax Benefits under the March 2025 reforms, you must meet several criteria:
Residency Requirements
You must:
- Be an Australian resident or hold a Special Category Visa
- Be living in Australia
- Have a dependent child or full-time secondary student aged 16-19 (for FTB-A)
- Have care of the child at least 35% of the time
Income Tests
Your eligibility and payment amounts depend on:
- Your adjusted taxable income
- The number and ages of your dependent children
- Whether you’re a single parent or part of a couple
- The income of both partners (for couples)
Maintenance Action Requirements
For separated parents, taking reasonable steps to obtain child support from the other parent remains a requirement for receiving the maximum FTB-A rate.
However, the March 2025 changes have introduced more flexibility around exemptions in cases involving family violence or other special circumstances.
How to Calculate Your Entitlements
The reforms have made calculating your potential benefits somewhat more complex, but Services Australia has developed enhanced online calculators to help families determine their entitlements under the new system.
Using the Payment and Service Finder
The most accurate way to estimate your payments is through the Payment and Service Finder on the Services Australia website.
This tool takes into account your specific family circumstances, income levels, and other relevant factors to provide a personalized estimate.
Transitional Arrangements
To ensure families aren’t disadvantaged during the transition to the new system, the government has implemented temporary transitional provisions.
Families whose payments would decrease under the new system will receive transitional payments for up to 12 months to cushion the impact of the changes.
How to Claim Family Tax Benefits
The application process remains similar to previous years, though with some enhancements to make claiming more straightforward.
Online Application Process
The most efficient way to claim is through your myGov account linked to Centrelink. The online application has been streamlined to guide you through the process step by step, with improved help features to clarify confusing points.
Required Documentation
When applying, you’ll need to provide:
- Proof of identity for yourself and your children
- Details of your income and your partner’s income
- Bank account details for payment
- Tax file numbers for all relevant family members
- Details of any child support arrangements
Payment Options
Under the new system, you can choose to receive your payments:
- Fortnightly (the default option)
- Quarterly
- As a lump sum after the end of the financial year
Impact on Different Family Types
The March 2025 changes will affect different families in various ways, depending on their specific circumstances.
For Single Parents
Single parents are among the biggest beneficiaries of the reforms, with the new Single Parent Supplement significantly boosting their support.
A single parent with two children under 13 could receive up to $27,000 per year in combined FTB payments, representing an increase of approximately $3,600 compared to the previous system.
For Dual-Income Families
Dual-income families with moderate earnings will generally see modest increases in their payments due to the higher income thresholds.
For example, a family with two children and a combined income of $90,000 could see their annual FTB-A payments increase by around $1,200.
For Families with Older Children
Families with teenage children will benefit from the higher payment rates for children aged 13-15, recognizing the increased costs associated with raising older children.
The additional support could amount to over $2,000 extra per year for each child in this age group.
Special Provisions and Circumstances
The March 2025 reforms have introduced or expanded several special provisions to address unique circumstances faced by some families.
Support for Foster Carers
Foster carers now receive enhanced support, with automatic eligibility for maximum FTB-A rates regardless of income, acknowledging their crucial role in caring for vulnerable children.
Provisions for Multiple Birth Families
Families with multiple births (twins, triplets, etc.) now receive a Multiple Birth Allowance of $176.82 per fortnight for triplets and $235.76 for quadruplets or more, representing an increase of approximately 12% from previous rates.
Remote Area Supplement
Families living in designated remote areas now receive an additional Remote Area Supplement of $36.40 per fortnight for each eligible child, recognizing the higher costs of raising children in remote Australia.
Family Tax Benefits and Other Government Payments
Understanding how FTB interacts with other government payments is crucial for maximizing your entitlements.
Interaction with Child Care Subsidy
The March 2025 changes have improved the coordination between FTB and Child Care Subsidy.
Families receiving maximum FTB-A automatically qualify for higher Child Care Subsidy rates, with the new system allowing for greater combined benefits for working families.
Relationship with Parental Leave Pay
The reforms have also enhanced the compatibility between FTB and Parental Leave Pay, allowing more flexible arrangements for new parents transitioning between these payment types.
Planning for the Next Financial Year
With these significant changes, families should take time to review their circumstances and plan accordingly.
Updating Your Details
Ensure all your details with Services Australia are current, including income estimates, bank details, and family circumstances. This helps ensure you receive the correct payment amounts without delays.
Seeking Financial Advice
Given the complexity of the changes, consulting with a financial counselor or using the free Financial Information Service provided by Services Australia could help you optimize your benefits and budget effectively.
Comparative Table of FTB Changes: 2024 vs 2025
| Benefit Type | Pre-March 2025 | Post-March 2025 | Change |
|---|---|---|---|
| FTB-A (under 13) | $209.51/fortnight | $287.86/fortnight | +$78.35 |
| FTB-A (13-15) | $326.02/fortnight | $374.92/fortnight | +$48.90 |
| FTB-A Annual Supplement | $814.80 per child | $896.30 per child | +$81.50 |
| FTB-B (child under 5) | $176.82/fortnight | $206.15/fortnight | +$29.33 |
| FTB-B (child 5-18) | $123.48/fortnight | $144.34/fortnight | +$20.86 |
| Single Parent Supplement | Not available | $433.20/fortnight | New |
| Base Income Threshold | $58,200 | $61,500 | +$3,300 |
| Secondary Earner Threshold | $6,059 | $7,900 | +$1,841 |
Frequently Asked Questions
When do the new FTB rates come into effect?
The new rates and eligibility criteria came into effect on March 20, 2025, with the first payments at the new rates being made from April 1, 2025.
Will I need to reapply for FTB under the new system?
No, if you’re already receiving FTB, your payments will automatically transition to the new rates. However, reviewing your details with Centrelink is recommended to ensure you receive the correct entitlements.
How often are FTB rates reviewed?
FTB rates are typically indexed annually in line with the Consumer Price Index, with the next scheduled review in July 2026.
Can I receive FTB if my child only lives with me part-time?
Yes, if you care for your child at least 35% of the time, you may be eligible for a proportional FTB payment based on your care percentage.
How do I update my income estimate if my circumstances change?
You can update your income estimate through your myGov account linked to Centrelink, via the Centrelink app, or by calling the Families line.
What happens if I receive too much FTB during the year?
If your actual income is higher than your estimate, you may need to repay some of your FTB. This is usually reconciled after you lodge your tax return.
The March 2025 Family Tax Benefit reforms represent a significant enhancement to Australia’s family support system, particularly for vulnerable families and those with higher costs of raising children.
By staying informed about these changes and understanding how they apply to your specific circumstances, you can make the most of the available support to provide for your family’s needs.
