Upper limit to be placed on FTB Part B

[dreamer80]

Labor's family tax benefit plans just the beginning, says PM

The Prime Minister has accused Labor of plans to take an axe to the family tax benefit system.
John Howard has stepped up his defence of the scheme in the lead-up to next month's federal Budget.
The Opposition says it is not fair that millionaires are eligible for Part B of the benefit, while families on lower incomes are penalised if they try to increase their hours of work.
But Mr Howard has told Southern Cross Radio that means testing the payments to exclude high income families would only be the start of Labor's plans.
"Their proposal would save $6 million a year," he said.
"Now do you think that if they were in Government they'd stop at that?
"What they would do is that they would bring the level at which the means test applies down so that it would begin to hit a lot of ordinary income earners who don't regard themselves, quite rightly, as being rich."
The Prime Minister is also expected to present a vigorous defence of the Government's family payments system in a keynote speech today.
In a speech to the Menzies Research Centre in Canberra, Mr Howard will argue the family tax benefit is an integral part of the tax system and is not welfare.
But Labor's family and community services spokesman, Chris Evans, says it could be better targeted.
"What we've got currently is 76 millionaires and hundreds of people earning more than $500,000 a year getting welfare," he saidhttp://www.abc.net.au/news/newsitems/200604/s1618065.htm

This article is a few weeks old yet, still very interesting and relevant given that there is a national election coming up.

What do you think about putting an upper limit on FTB Part B??

[mum2my4]

Well I would think if you earned in excess of $500,000 a year you would not need the centrelink money. However if you are entitled to it of course you would claim it.

Limiting it is probably a good idea, I can't imagine extremely wealthy people missing it:confused:

[MCNmummyof2]

I agree you dont need it if you are earning more than 500,000 a year. Hopefully by doing this they might be able to do something about low income earners with family tax b. I hate that my parenting payment means that I get less family tax

[FourAngelKisses]

I think it's a good idea. No one earning over $100 000 needs it IMO.

[BlueGin]

I don't think it should be limited, I see it as being a bit like the baby bonus. The other part is means tested, as that is the part that is aimed at helping out those that need it.

[sam's mum]

the problem is that it already has a limit.

we don't get it because we both work.

This payment is a replacement for the dependant spouse rebate, the people who are getting this at $500 000pa used to be able get a reduction in their tax for their partner having a low income.

It is about the income of the lowest earning person.

[MCNmummyof2]

But by limiting the upper limit, that might allow them to help with the people on the lower end of the scale.

[dreamer80]

But by limiting the upper limit, that might allow them to help with the people on the lower end of the scale.

:thumbsup::yes:

[spoon]

Good. and the baby bonus should be means tested as well.

[Verdi]

I am sorry but everyone pays taxes, so i think everyone should be treated equally and not penalised cause they work hard for their money.

[sam's mum]

well, yes, except that the taxation and welfare systems are not about equality, they are about equity.

equality would be saying that everyone has to pay $10000pa in tax regardless of their income.

equity is saying that you pay a percentage of your income, those that earn more, pay more. This also means that when a tax cut is given that those that earn more will have a greater saving - but will still be paying more.

[dreamer80]

I am sorry but everyone pays taxes, so i think everyone should be treated equally and not penalised cause they work hard for their money.

Yes, I agree with that in regards to the baby bonus ( it is a bonus EVRYONE gets):yes:, but not for the FTB Part B:no:, fortnightly payments should only be for those who need it...not people who partners are earning $150,000+

[Verdi]

My reasonings are that my husbands own his own business we pay $25,000 FBT every quarter:eek:. The government taxes us from every angle and we are honest people so we pay every single demand they make so hence i would be pretty annoyed if they took my payment. My hubby works a 16 hour day!

As a nation we pay the highest taxes in the world.

[Verdi]

FBT is federal business tax - a little soemtheing for the governement that is made from the sweat of your back

[Lirael]

Yes, and sometimes it can be a disadvantage if two parents work with average incomes, as it was outlined in another article in the news section of BH.

But my concern with it is while I am on maternity leave we can claim approx $150/fortnight, yet my DH earn over $250,000, and we have no debts, own our home outright etc…as there is not income or assets test for this payment we can get it…:eek: Just seems like a lot of wasted tax payer money… going to people who don’t need it…:confused::thumbsdown:

than dont claim it. if you do not need it. just because you are entitled to something does not mean you HAVE to claim it. just dont. KWIM?:)

[sam's mum]

that's a lot of fringe benefits...

Fringe Benefits Tax is charged when someone receives a non cash benefit from their employer.

If you were earning $50,000pa and you said to your boss to pay $30,000pa off your mortgage and just pay you $20,000pa in wages instead there are two possible situations.

1. If there was no FBT.
Instead of paying income tax on $50,000pa you would only pay tax on $20,000pa, you would get the benefit of the other $30,000pa with absolutely no income tax whatever to pay on it.

2. With FBT.
With FBT in place you get taxed on the $30,000 that was paid to you as a non cash benefit. This restores equity to the system as it stops people from taking their salary in non cash methods and avoiding paying income tax.

There are some items that are FBT exempt. Laptop computers, on site employer run child care are two I can think of. Also some organisations are FBT exempt, such as charities. This is to enable them to offer a competitive salary package to attract staff.

[Verdi]

Thanks sams mum, but i actually don't do the the books my SIL does and she is so honest, which is good i guess:D but it does make me angry that we pay so much.:thumbsdown:

[dreamer80]

Yes, I can see where you coming from candyn. :yes:But personally my DH and I pay alot of tax per year! Yet I don’t want or expect handouts as such…I like my taxes going to schools, hospitals, roads, public services etc…I prefer to see my tax dollars going there than to some millionaire or wealthy family!

[dreamer80]

than dont claim it. if you do not need it. just because you are entitled to something does not mean you HAVE to claim it. just dont. KWIM?:)

I never said i would claim it! I said, I can if i wish, and what the post was about was people opinions about putting an upper limit on it!!:D

[Mrs AJC]

How much Family Tax Benefit Part B do I get?

Payment rates appear below as a guide only and are effective from 20 March 2007. Contact your nearest Family Assistance Office (http://www.centrelink.gov.au/internet/internet.nsf/contact_us/offices.htm) at Centrelink for a personal assessment.
This payment is either made fortnightly or through the tax system as a lump sum payment at the end of the financial year. There is also the option of reducing the amount withheld from wages paid to you or your partner.

This payment is subject to an income test (http://www.centrelink.gov.au/internet/internet.nsf/payments/ftb_b_iat.htm).
This payment is not subject to an assets test. The primary earner in a partnered relationship and sole parents are not subject to an income test.
Maximum Rate of Family Tax Benefit B

Age of Youngest Child Per Fortnight Per Year Per Year with supplement Under 5 years $120.96 $3153.60 $3467.50 5 - 15 years
(or 16 - 18 years if a full-time student) $84.28 $2197.30 $2511.20

Nope shouldn't be a maximum limit on the primary earner. If you don't need it don't claim it. And whilst there will probably be people who claim it who don't need it because they have the means without it, so too are there people at the other end of the scale who say they are a single parent but share the cost of raising their kids with their partner.

[Lirael]

yeah i know, and my reply was not just directed at you, but at anyone who does earn enough to not need it. whats $150 a fortnight to someone who earns $6000 a fortnight.
clearly its not 'needed' so they shouldnt really claim it if its not needed. if they do, they do, nothing i can do about it, im just saying why bother if you dont need it. I hate being on centerlink, and I will never claim it again if I can help it.

[sam's mum]

Thanks sams mum, but i actually don't do the the books my SIL does and she is so honest, which is good i guess:D but it does make me angry that we pay so much.:thumbsdown:

You can actually control your FBT, it is directly related to the fringe benefits that you are providing.

However, if you weren't paying it as an FBT, you would be submitting it as an income tax withholding from your staff's wages and the amount wouldn't be that different. Even though the business pays the FBT, reality is that you would be about the same amount out of pocket if you paid the money as tax effective cash wages.

EG. A $10,000 benefit means $10,000 in widgets to the staff member and (about) $8,900 to the ATO in FBT. Total - $18,900.
To give the staff member $10,000 benefit in cash wages you would need to give them more than $10,000 because they are going to be taxed on it. The people who do FBT are generally on the top tax rate (otherwise the staff member is worse off and would have to be pretty silly to do it) and so you would have to pay them $19,420. They would get $10,000 and the ATO would get $9,420 in withheld income tax.

FBT or withheld income tax, there is really no difference.

[jojojonsey]

I think it is disgraceful that there is no upper limit on this payment. I believe that it is a disincentive for people (women in particular) who may want to work and who don't because they realise that they will loose a hefty chunk of their family assistance even if they only want to work a few hours per week to get out of the house.

There are plenty of tax breaks available to those of higher income and trust me - from working in financial services I know the majority of people take whatever can - when they need it or not.

[BlueGin]

...who may want to work and who don't because they realise that they will loose a hefty chunk of their family assistance even if they only want to work a few hours per week to get out of the house.

That is a time that charity work can be a great solution if they don't want a reduced amount... or the warm glow that comes from being paid for their job rather than getting the full welfare entitlement :thumbsup:

[littlepickle]

I dont really think that there should be an upper limit. I agree that people do not have to claim the money if they dont need it, but on the other hand they are tax payers and are entitled to receive it if they wish. We have ours put directly into dd's account. We figured that over the years with the compound interest, it should make a nice nest egg for her. What I am trying to say is even though we might not need it, we still claim it for our dd's benefit if that makes sense.

[lotti]

For me its like a reward for being a stay at home mum and not receiving an income.
Dh pays alot of tax, I didn't see anything wrong for getting a bit back.

[jojojonsey]

That is a time that charity work can be a great solution if they don't want a reduced amount... or the warm glow that comes from being paid for their job rather than getting the full welfare entitlement :thumbsup:

What about childcare?

[our little treasures]

I am sorry but everyone pays taxes, so i think everyone should be treated equally and not penalised cause they work hard for their money.

Sorry but I take offence to that, are you saying that because someone earns a lower amount they are not working hard for their money??!!

[jojojonsey]

For me its like a reward for being a stay at home mum and not receiving an income.
Dh pays alot of tax, I didn't see anything wrong for getting a bit back.

Ahh but I always get told that SAHM's do it for love not money:p - sorry being cheeky:D

What's wrong with the system is that it shouldn't be limited to single income families. Some two income families end up paying just as much if not more tax than an individual earning the same wage - but they don't get that "little bit back".

[sam's mum]

Ahh but I always get told that SAHM's do it for love not money:p - sorry being cheeky:D

What's wrong with the system is that it shouldn't be limited to single income families. Some two income families end up paying just as much if not more tax than an individual earning the same wage - but they don't get that "little bit back".

two income families get the benefit of the tax free threshold twice and also the lower tax rates. The first $10000 that someone earns is taxed at a lower rate than the $10000 you earn between $50000 and $60000. So as a two income family you can earn the same amount and pay less tax.

[jojojonsey]

two income families get the benefit of the tax free threshold twice and also the lower tax rates. The first $10000 that someone earns is taxed at a lower rate than the $10000 you earn between $50000 and $60000. So as a two income family you can earn the same amount and pay less tax.

Sorry yes I understand that but was thinking a little broader and kind of lumped all my thoughts into one paragraph.

For two people to earn the same as one person they are generally in a lower "class" of job and so are often less likely to make use of the tax system as it stands.

Dual income families are also more likely to encounter greater basic work expenses to earn the same income. Whether it be twice the train fare or two payments to the accountant to do their tax returns.

[soph'smum]

Well I just think the whole system should be overhauled.

I have just returned to work FT and DH is now full time carer to our two girls - despite the fact that I am earning about three times DH's previous salary - we are still entitled to the full Family tax Part B.

When I called Centrelink to tell them our new income details i was actually shocked (and a little horrified) that earning a six figure income can still give you access to the full rate of Fam Tax Part B.

There are two income families who earn less than we do and could really use the extra help - I know, because we've been in that position two at one stage.

It's just wrong really.

[lotti]

I do stay at home cause I love the job.
Lets face it I could get alot more money and tax back if I go to work and put my kids in childcare full time.

[FourAngelKisses]

I do stay at home cause I love the job.
Lets face it I could get alot more money and tax back if I go to work and put my kids in childcare full time.

Would you come out in front though by the time you pay for daycare?

[SorenLorensen]

i have not read all the responses but i will reply anyway.

years ago no matter who you were if you had a job and had a dependent spouse you were able to claim "married mans tax" if you were single it was "single mans tax" a married or person with a spouse they were supporting paid less tax.
thay have gotten rid of that and replaced it with FTB.
so i think EVERYONE should get it OR bring back the old tax system.

[lotti]

I wouldn't get a childcare rebate? How much do you think i would earn? LOL

[FourAngelKisses]

Just wondering. I know that if I went to work we would be far worse off financially.