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Federal Budget

This quarter saw the release of the new Budget 2014, and it revealed some concerning changes to the Family Tax Benefit scheme that are likely to have a huge and significant impact on families.

The budget will see Family Tax Benefit cut for families after their youngest child has turned six, as well as a lowering of the earning threshold from the previous $150,000 to $100,000. There were also cuts announced to the end of year supplements for families.

So how do these changes affect your family?

The intention of the tightened budget is to repair the economy and to encourage parents back to work, but how will this affect you and your family in the long-run?

There are some positives to the new budget.

From 2015, the government will introduce Restart; a new scheme to encourage the older, long-term unemployed back into work with a wage subsidy for employers. They are also offering a new payment of $750 per child between the ages of 6 and 12 for single parents who currently receive the full FTB payment. The highest criticism for the new budget comes from those who will suddenly find themselves with less money per month but with the same expenses to pay out. Universities are now free to set their own fees in order to compete for student places, leaving students with larger fees to pay, and with an increase to 6% on student loan interest, a more significant amount of debt at the end of the course.

As part of the governments drive to encourage people back into work, from July, those who have been unemployed for over a year will be required to undertake 15 hours a week work in order to receive their dole money. This will increase to 25 hours from 2015. This has been met with both praise and criticism with some claiming that the amount received by dole claimants does not match the amount of work required, and others taking the view that people should have to work for their money.

Perhaps most concerning for some families is the introduction of a cost for a visit to the GP. It will now cost you $7 to see a doctor, for under 16’s this will only apply for the first 10 visits a year. Low income families now face the worry of affording to visit the doctor and keep healthy, especially with the cost of medicines rising.

Disappointingly, it is the low income families who seem to have been affected the most by the cuts and changes. The removal of the family tax benefit after youngest children turn six, combined with the rising costs of after school childcare and the increasing scarcity of jobs, is likely to leave families who were already struggling in a worrying position.