Does the Family Tax Benefit count as income?

What is the Family Tax Benefit?

The Family Tax Benefit is a two-part government payment designed to assist Australian families with the cost of raising children. In order to qualify for some or all of this support you must meet strict eligibility criteria.

To receive Part A benefits you must:

• have a dependent child or full time secondary student aged 16 to 19 who isn’t getting a pension, payment or benefit like Youth Allowance
• care for the child for at least 35% of the time
• meet an income test and residency rules

To receive Part B benefits you must be either:

• a member of a couple with one main income and care for a dependent child aged under 13 or;
• a single parent or non-parent carer, or a grandparent carer with a dependent child aged under 18. The child must meet study requirements if they’re aged 16 to 18

While these are the basic requirements, eligibility can be somewhat more complex depending on your circumstances. For the full list of conditions you can visit the Services Australia website.

How much can you get when claiming the Family Tax Benefit?

At the time of writing, the base rate for Part A is $63.56 per child per fortnight. However, this isn’t the minimum rate. You could be paid less depending on your income.

The maximum rate per family for Part B is $168.28 a fortnight when the youngest child is 0 to 5 years of age and $117.46 per fortnight when the youngest child is 5 to 18 years of age.

The payments you receive will depend on your particular circumstances. You’ll need to keep your family income estimate up to date so you’re paid the correct amount.

Is the Family Tax Benefit considered taxable income?

Family Tax Benefit payments are not counted as taxable income. However, it’s important you do not miscalculate your gross family income when applying for, and while receiving, support. 

Although you won’t be taxed on these payments, changes to your financial situation, such as an increase in income, may affect the amount of benefits you receive. If you neglect to report these adjustments, you may wind up with a debt to Centrelink.

However, there’s no interest charged on the amount owing and you’ll have the option to set up a payment plan if you are unable to hand over the full amount as a lump sum.

Can you declare the Family Tax Benefit as income when applying for a home loan?

While it’s not considered taxable income, some home loan lenders may accept Family Tax Benefits as a credible source of income. You will still be required to meet standard lending conditions, such as possessing an acceptable credit score and sufficient funds for a deposit.

Compare home loans in Australia