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Church agency says poverty will strike more children if Family Tax Benefit changes

Family Tax Benefit changes will cause problems

Major problems: “All families with children would suffer substantial cuts in their incomes. All children would be worse off, save for those who are less than 12 months old.” Photo: AAP

MANY more children will live in poverty if Federal Parliament approves proposed changes to Family Tax Benefits, Australian Catholic Council for Employment Relations chairman Brian Lawrence says.

Mr Lawrence, who was recently presented as a Papal knight for his work in reforming Australia’s minimum wage,  gave the warning on November 19 when he appeared before a Senate Community Affairs Legislation Committee hearing into the parliamentary bill proposing the changes. 

He was speaking in support of ACCER’s submission opposing the bill.z

Mr Lawrence, in his opening statement, said if the bill was enacted it “would have a major impact on the living standards of low and middle-income families”.

He said the Federal Government’s financial impact statement for the legislation showed it was intended to save $4.84 billion over the first three years of its operation.

“These proposed cuts will fall on about 2.5 million Australian families,” Mr Lawrence said.

“All families with children would suffer substantial cuts in their incomes.

“All children would be worse off, save for those who are less than 12 months old.” 

The changes are planned to begin on July 1 next year and be fully implemented two years later, on July 1, 2018.

“The two-year program will inflict an unjust burden on all families, but particularly those families who rely on a single income and have children in secondary schools,” Mr Lawrence said. 

“In broad terms, the cuts of $4.8 billion borne by 2.5 million families would amount to an average loss of over $1900 for each family with children in the first three years.”

Mr Lawrence said the living standards of single-income families would be further affected through changes to the eligibility for Family Tax Benefit Part B and the payments made under it.

Family Tax Benefit Part B is payable to the primary carer of children. Parents can claim it until a child reaches 16 or 18, depending on whether the child is still at school.

“The bill proposes that from July 1, 2016, single-breadwinner couple families would no longer be eligible for Family Tax Benefit Part B at the end of the year in which their youngest child turns 13,” Mr Lawrence said.

“This would amount to a further loss of $60.20 per week and means that the loss would usually occur from the end of the first or second year of secondary school.

“The loss of this payment would cost the family $13,924 over five years of secondary schooling.”

Catholic Social Services Australia criticised the Federal Opposition for supporting that part of the legislation.

CSSA chief executive Marcelle Mogg said couple-parent families, especially those on low incomes, would “bear the burden” of that decision.

Ms Mogg said the Coalition and Labor should not be taking Family Tax Benefit Part B from low and middle-income families with school-age children.

“FTB B helps parents make an effective choice as to how they will balance work and family responsibilities,” she said.

“Low-income families now have no choice as to how they care for their children.

“The proposed legislation would place economic pressure on couple-parent families to abandon plans to have one of them stay at home to care for their children.”

Ms Mogg said the changes would “significantly limit the capacity of low-income families to secure a better future for their children”.

The Sydney Morning Herald reported Social Services Minister Christian Porter as saying the Government was “unequivocally” trying to “increase work force participation” with its Family Tax Benefit Part B changes for parents and grandparents of children older than 13. 

Single-parent families with children aged between 13 and 16 will receive $1000 a year, $1700 less than what they currently receive.

In return, there will be an extra $1000 a year for those whose youngest child is aged under one.

Families under Family Tax Payment Part A will receive an extra $10 per child every fortnight until the youngest child turns 19.

Treasurer Scott Morrison told ABC Radio the changes would achieve the savings necessary to help pay for the Government’s families package to be introduced later this year.

By Peter Bugden.

Catholic Church Insurance

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