1

Supporting families
with teenagers

SUPPORTING FAMILIES WITH TEENAGERS AT SCHOOL

A re-elected Gillard Labor Government will increase family support by up to $4,000 a year
per teenager, to help families meet the higher costs of older children and encourage more
teenagers to stay at school.

Under significant reforms from 1 January 2012, Federal Labor will increase the maximum
payment rate of Family Tax Benefit Part A (FTB-A) by more than $150 per fortnight for
teenagers aged 16 to 18 years who are in school or an equivalent vocational qualification.

These reforms will help families make ends meet and help with cost of living pressures.
There are around 650,000 teenagers turning 16 over the next five years whose families will
benefit.

Why are we doing this?

The Gillard Labor Government recognises that families with older teenage children can face
higher costs. The cost of groceries, clothes and family activities can all increase as children
grow.

But under the existing system, the maximum rate of FTB-A drops from $208 per fortnight to
$51 per fortnight when a child turns 16. Rent Assistance also stops when a child turns 16.

This sharp drop in family support can encourage teenagers to leave school early if their
family is unable to support them in full-time study or training.

What are we doing?

The new maximum rate of FTB-A for 16 to 18 year olds will increase to $208 per fortnight,
leading to a total amount of $6,161 per year. 1 This is the same rate as applies for 13 to 15
year olds. Other eligibility conditions for 13 to 15 will also continue to apply for these 16 to
18 year olds.

The new rates will apply from 1 January 2012 in time for the start of the school year.

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Who will benefit?

Families who receive FTB-A with children aged 16 to 18 may benefit while those children
remain in school or training.

Families with teenagers who turn 14, 15 or 16 years old in 2010 will be the first to become
eligible when the higher rates commence from 1 January 2012.

Families with younger children can look forward to receiving increased payments when their
child turns 16.

Teenagers will need to be in full time secondary school, or full time training for an
equivalent vocational qualification.

The increases are to the maximum rate of FTB-A. Families will need to receive more than
the base rate of FTB-A to benefit from the increases.

There are around 900,000 FTB-A children who will turn 16 over the next five years. Around
650,000 of these receive more than the base rate of FTB-A and their families will benefit
from these increases.

Comparison of assistance, FTB-A maximum rates

Current Proposed
Age of child 0-12 13-15 16-17 16-18

Fortnightly $ 160 $ 208 $ 51 $ 208

Annual $ 4,906 $ 6,161 $ 2,062 $ 6,161

(note: annual figures include the FTB end of year supplement worth $726)

How much extra assistance will families receive?

Every family’s circumstance is different. The exact amount of benefit each family receives
will depend on the family’s income, and the age and number of their children.

These reforms will increase the maximum rate of FTB-A for eligible children aged 16 to 18.
The maximum rate of FTB-A will by increase by $157 per fortnight, an increase of $4,099 per
year.

Families receive the maximum rate of FTB-A when their income is $45,114 or less. Families
will continue to receive increased payments until their income reaches the limit at which
only the base rate of FTB-A may be paid. This amount varies by number and age of children.

For example, a family with two teenagers, aged 13 and 16 years, will be eligible for
increased assistance with an annual family income of up to $86,104. A family with three

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teenagers, aged 13, 15 and 17 years will be eligible for increased assistance with an annual
family income up to $106,598.
Families will also be eligible for Rent Assistance. Rent Assistance currently cuts out when a
child turns 16. These reforms will provide Rent Assistance for families with 16 to 18 year
olds who receive more than the base rate of FTB-A.

Single income families may also become eligible for Family Tax Benefit Part B as a result of
these changes if their child moves from Youth Allowance onto FTB-A. This will further
increase the amount of total additional assistance they may receive.

Families with three or more FTB-A children may also benefit from the Large Family
Supplement of $288 per annum.

How does this support other education and training reforms?

This initiative supports the Gillard Labor Government’s objective to improve year 12 or
vocational equivalent completion rates. It will also help improve participation in further
education and training by helping support families while children finish school.

The Independent Review of Australia’s Future Tax System (AFTS) recommended that “rates
of payment should increase with the age of the children to recognise the higher costs of
older children”.2 The drop in family assistance when a child turns 16 is one of the features
of the family assistance system most frequently criticised by parents.

Research shows that children from low income families have lower levels of school
completion. For example, in 2006, Year 12 completion rates were at 59 per cent for low
income students, compared with 78 per cent for higher income students.3 These findings
indicate that the costs of educating teenage children are an important barrier for families on
low incomes to support their child’s education.

Under these reforms, family assistance will be the primary form of government support for
children until they finish school. Youth Allowance will then provide ongoing support to
young people as they finish school and progress to further education and training.

These changes build on the Gillard Labor Government’s earlier reforms to Youth Allowance
that increase support for young Australians in further education or training.

They follow recommendations in the Independent Review into Australia’s Future Tax System
that “family payments should be the main form of assistance for families up to the end of
secondary school or the school year in which they turn 18 (the earlier of the two).”4

The increased FTB-A payment for older children in school or training will be $781 per year
higher than the rate of Youth Allowance paid for 16 and 17 year olds. This will encourage
more 16 year old children to remain in the Family Tax Benefit system, rather than moving
onto Youth Allowance.

These reforms also build on the new FTB-A participation requirements introduced as part of
the Council of Australian Governments Compact with Young Australians in 2009. The new

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rules require all children 16 to 20 years to be studying towards, or have completed, year 12
or vocational equivalent to receive FTB-A.
How much will this policy cost?

Financial Implications ($ million, underlying cash balance)

2010-11 2011-12 2012-13 2013-14 Total

0 -89.9 -251.6 -326.9 -668.5

Funding for this commitment will be fully offset over the forward estimates, consistent with the
Gillard Labor Government’s commitment to return the budget to surplus by 2013, three years
ahead of schedule.

AUTHORISED N.MARTIN for the ALP, 5/9 Sydney Ave Barton ACT.

1
These are 2010 figures. Actual dollar amounts will higher when implemented in 2012.
2
Part F3, Family and Youth Assistance, AFTS Final Report.
3
James, R., Anderson, M., Bexley, E., Devlin, M., Garnett, R., Marginson, S. & Maxwell, L., 2008.
Participation and equity: A review of the participation in higher education of people from low
socioeconomic backgrounds and indigenous people. March, Universities Australia, Canberra.
4
Recommendation 97, AFTS Final Report.

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