Member Resources


Saturday, 29 April 2017

Family tax benefit rates and several other government benefits including parental payments will be frozen from 1 July as part of the deal which saw the Government’s childcare changes pass parliament.

The Government secured passage of its childcare package and a revised set of Budget savings by dropping its omnibus childcare bill (which included a broad range of welfare cuts), resurrecting its original 2016 childcare bill and introducing a new social security bill.

The Social Services Legislation Amendment (Omnibus Savings and Child Care Reform) Bill 2017 contained a limited number of welfare cuts (worth $300 million over four years on the Government’s figures) and – importantly – a new measure: a two-year indexation freeze on family tax benefit payments, which will save $2.1 billion over four years.

The freeze of the indexation of family tax benefits will affect about 1.5 million families.

Under the deal the Government reached with the Senate cross-bench the family tax benefit and welfare cuts approved by Parliament as part of the childcare package are:
• Freeze family tax benefit rates for two years from July 1 (not part of the original Omnibus welfare cuts);
• Freeze "income-free areas" and "means-test thresholds" for certain payments and allowances for three years;
• Extend waiting periods for parental payments and youth allowance for those who are not full-time students or apprentices; and
• Automate income stream review processes, which the government says will improve the accuracy of income support payments.
Welfare cuts included in dumped "omnibus" bill and not included in the childcare bill were:
• Phasing out annual family tax benefit end-of-year supplements;
• Making young people wait four weeks before receiving income support;
• Shifting unemployed people aged between 22 and 24 to youth allowance instead of the dole;
• Ending carbon tax compensation for new welfare recipients;
• Scrapping the pensioner education supplement; and
• Stopping pension payments for people (who've spent less than 35 years of their working life in Australia) after six weeks overseas.

These cuts will not be implemented unless further legislation is passed – which appears unlikely.

The Australian Financial Review reported, “Last month, sources confirmed all unpassed budget measures, or so-called zombie measures, were likely to be dumped at the May budget because credit ratings agencies no longer believed they would ever pass and the government should take the savings off the books.”


Click below to view source

Minister's media release: New Social Services Amendment Bill Secures $2.4 Billion In Budget Savings

Parliament of Australia: Social Services Legislation Amendment Bill 2017

Australian Financial Review - Phillip Coorey: Childcare deal leaves $4b in budget cuts in limbo

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