LEARN · FAMILY TAX BENEFITS
Family Tax Benefits — Part A and Part B
Family Tax Benefits (FTB) are payments from Services Australia (Centrelink) to families with dependent children. They're not strictly part of the tax system but they're tightly tied to it: your taxable income at 30 June determines how much FTB you were entitled to for the year, and over- or under-payments are reconciled when you lodge.
1. Part A vs Part B
Part A is paid per child, with rates that depend on the child's age and the family's adjusted taxable income. Part B is an additional payment for single-parent families and couples with one main income earner. Both are paid fortnightly during the year based on estimated income, then balanced after returns are lodged.
2. Income tests
Part A starts to phase out at around $65,000 family income and cuts off entirely once income passes the upper threshold — exact numbers reset each year. Part B has a primary-earner cap (around $117,000 in recent years) and a secondary-earner taper. The tests use 'adjusted taxable income' which adds reportable super contributions and reportable fringe benefits to taxable income.
3. Year-end balancing
Once you lodge your tax return, Services Australia reconciles the FTB you received against what your actual income shows you were entitled to. If you under-estimated (received too much), you owe it back. If you over-estimated (received too little), you get a top-up. Both partners must lodge before balancing happens — one outstanding return delays the other.
4. Strategies that affect FTB
Salary-sacrificing super, taking unpaid leave, or running a business with discretionary distributions all affect adjusted taxable income and therefore FTB. We don't structure for FTB outcomes alone — but if a tax-planning move has a side effect on FTB entitlement, we model both numbers before recommending.
5. Common mistakes
· Not lodging a return because no tax is owed — FTB balancing requires lodgement regardless
· Forgetting that fringe benefits and reportable super count in the income test
· Updating Centrelink with mid-year income changes too late to avoid over-payment
· Treating the year-end balancing debt as a tax debt — it's a separate Services Australia debt with its own recovery rules
6. When to talk to us
When you start a business or change jobs mid-year, when your salary structure changes (bonuses, super-sacrifice, novated lease), or when you're separating and FTB shifts to a single-parent payment. We coordinate the tax-return lodgement with the FTB balancing.
LAST REVIEWED · 2026-05 · BY ZAKI CHOUDHRY · TPB 26321143
