Schedule 1—Age of FTB child for family tax benefit
Schedule 1 of the Family Assistance and Other Legislation Amendment Bill
2011 proposes to amend the A New Tax System (Family Assistance) Act 1999 to
enact measures announced in the 2011–12 Budget.
The substance of the proposed amendment is that the maximum age of a
child for eligibility for Family Tax Benefit (FTB) Part A be lowered from 24 to
21 on 1 January 2012.
As a transitional measure, FTB Part A payments will not be withdrawn on
1 January 2012 from families where a child is aged between 22 and 24 and
is enrolled in a course of full-time study immediately before 1 January
2012. The payments will continue until the end of the course of full-time study
in such cases.
This measure is intended to align the age of non-dependence for FTB
Part A with the age of independence for Youth Allowance.
The Australian Government calculates that this measure would save $29.2
million over four years.
Issues and impacts
The amendment would make families ineligible for FTB Part A payments for
children aged 22 years and above, with the exception of 22–24 year old
students, from 1 January 2012.
On that same date, the age of independence for the purpose of Youth
Allowance will be 22, according to the Social Security Act 1991. This
means that a person aged 22 years and above who is enrolled in full-time study
will be assessed for eligibility for Youth Allowance against their own income,
not that of the parents. Moreover, the Youth Allowance payment is paid to the
individual, not to their family.
Thus, a family may lose FTB Part A when their child turns 22, but the
individual could gain personal support through Youth Allowance instead.
The Committee considers the harmonisation of legislation a sensible goal
that enables individuals, families and organisations to navigate and understand
the laws that apply at various stages of people’s and families’ lives. The
Committee also supports the view that young people aged 22 years and above are
The Committee notes that this amendment reflects the view that families
do not require family payments for children who are no longer dependent.
Independent children can instead receive direct support if they meet Youth
Allowance eligibility requirements and are studying full-time.
Effectively, the Australian Government will be transferring benefits from
the parents of 22–24 year old full-time students through FBT Part A directly to
22–24 year old full-time students through Youth Allowance.
The Committee is of the view that Schedule 1 will not result in
significant disadvantage for Australian families and recommends that the
Australian Parliament agree to pass Schedule 1 of the Family Assistance and
Other Legislation Amendment Bill 2011.