The Australian government provides substantial financial support for families with children. But many people either do not know these payments exist, do not claim them in full, or claim them incorrectly — and then receive an unexpected debt at tax time when their income estimate was wrong. Here is a practical guide to the main payments, what they are worth, and the tax reporting obligation that catches many families off guard.
Parental Leave Pay
The government pays up to 22 weeks of Parental Leave Pay after a baby is born (or adopted). The payment is made at the National Minimum Wage rate, currently approximately $915 per week before tax. Both mothers and fathers (or partners) can access the payment, and it can be split between parents.
- Apply through Centrelink — start the process before your baby is born
- Payment is means-tested based on individual income ($168,865 individual / $350,000 family income cap for 2024-25)
- Paid as a wage replacement, not as a supplement on top of employer parental leave
Family Tax Benefit — Part A and Part B
Family Tax Benefit (FTB) is one of Australia's largest family support programs. It comes in two parts:
Family Tax Benefit Summary
FTB Part A: Paid per child, based on family income and number of children. The maximum rate is approximately $222 per fortnight per child under 13 (higher for teenagers). Payments reduce as family income increases, phasing out at higher thresholds.
FTB Part B: Paid as a supplement to single-income families or families where one parent is the primary carer. Maximum approximately $188 per fortnight. Phases out based on the secondary earner's income.
Child Care Subsidy
The Child Care Subsidy (CCS) covers a percentage of approved childcare costs — up to 90% for lower-income families. The subsidy is calculated on family income, the number of children in care, and the type of childcare service. For families earning under $80,000, the maximum subsidy rate applies.
Newborn Upfront Payment
When you claim Family Tax Benefit Part A after a new baby, you may also receive a one-off Newborn Upfront Payment of approximately $667. This is paid automatically as part of the FTB claim process.
The Tax Trap: Income Estimates and End-of-Year Reconciliation
Critical: Update Your Income Estimate Throughout the Year
FTB and some other Centrelink payments are based on estimated family income during the year.
If your actual income turns out to be higher than your estimate, Centrelink will reconcile the payments at tax time — and you may owe money back.
The ATO and Centrelink systems share data. Inaccurate estimates are caught during automatic reconciliation.
Update your income estimate in myGov whenever your income changes significantly — mid-year, not just at the start.
Many families receive FTB throughout the year and then face a debt in July when the end-of-year reconciliation happens. The fix is straightforward: keep your Centrelink income estimate current. A registered tax agent can help you review your entitlements and avoid unexpected debts.
General information only
This article provides general tax information only and does not constitute personal tax, legal, or financial advice. Tax rules can change and individual circumstances vary.
If you would like advice based on your situation, please get in touch with the practice.
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