Tenants, good salaries and centerlink payments

[Mindmaster]

Just had a new tenant, a couple with two kids who should be great.

Found out from their application that the husband has an excellent (to me) salary and his wife does not work and receives centerlink payments.

Very surprised that centerlink will give payments to one parter who is not working when the other partner has a very good salary. I always thought that centerlink was for people with financial hardship or are struggling to make ends meet.

I've been out of Australia for a while so I'm out of touch. Is this normal? Where does center link draw the line?

Not sure this is good or bad and I'm not in a position to judge. Just find it unexpected.

 

[thatbum]

Its probably Family Tax Benefit B which is simply a payment to a non-working spouse that cares for children.

I think the threshold is like $150k a year for the actual working partner.

Its not really a big payment from memory, but its technically a Centrelink one.

 

[Lil Skater]

If the second child is under a year old it could also be PPL which is also technically Centrelink.

 

[Peter_Tersteeg]

Hi Brendon,

My personal feeling is that Australia gives out a lot of welfare far too easily, but coming from a position where I see a lot of people's incomes, I can assure you that this is not unusual.

 

[cimbom]

I think Centrelink gives money too easily to people with kids but is quite restrictive to people in other circumstances

 

[sash]

I agree.....I think the money would be better spent on people trying to survive on the $240pw Newstart allowance.

Why should tax payers keep giving people on incomes more that $80k with kids a subsidy. Now there is thought to balance the budget. There are already tax breaks for dependents.

Imagine what the budget surplus would look like?

Hi Brendon,

My personal feeling is that Australia gives out a lot of welfare far too easily, but coming from a position where I see a lot of people's incomes, I can assure you that this is not unusual.

 

[Munchkin]

family tax benefit is a tax payment, not welfare like the dole or parenting payment. its just handed out through centrelink. up until recent years it was something you could claim through your tax return.

part B for the lower income earner is intended to offset the fact that you have one income earner with only one tax free threshold. If there were two income earners they would be getting the tax benefit of two tax free thresholds and paying less tax than one person earning the amount of two earners.

I guess it also depends what you would consider an excellent income. I am on a DSP for example and the threshold of what my husband can earn before my payment gets cut off is quite generous. But I guess they consider the fact that I do not have the ability to go out and earn my own income easily.

 

[Lil Skater]

I must also add that I agree they give out far too much to people who don't need it.

When I left home, and lost my job (even when I had my job it was low paying, and things were tight) I couldn't get payments as I was deemed a "dependent". Yet my friends who still lived at home got $300 odd a week for nothing!

That was the only time I'd ever checked to see if I was eligible, because I needed to pay bills.

I'd be interested to know what the income is, and what the payments are for.

 

[Corey Batt]

In the end it comes down to what you believe is the role of government.

Personally, I would be quite happy for middle class welfare to be removed if it followed tax cuts to the value of revenue needed to fund such programs.

Individual responsibility, not paternalism for me.

 

[lizzie]

I believe we all pretty much think along the same lines here ... get rid of middle income welfare (despite calling it tax breaks) ... wow ... imagine how much NG we could fund?

And I do understand the one income threshold versus two - but also have to consider how many more expensives a two income parenting household generally has (including child care) - and if us stay at home mum's really wanted to work, we would find a way. Just like all those working mums do.

 

[softmonkey]

Not sure what you guys are talking about? Once you get above $80k income, your partner gets nothing at all once the PPL ends, well ok $1 a fortnight in family tax B. Yes $26 a year. Not complaining, fair is fair. If a couple is on a higher salary than that and still drawing appreciable benefits, someone's fibbing somewhere.

 

[westminster]

Not sure what you guys are talking about? Once you get above $80k income, your partner gets nothing at all once the PPL ends, well ok $1 a fortnight in family tax B. Yes $26 a year. Not complaining, fair is fair. If a couple is on a higher salary than that and still drawing appreciable benefits, someone's fibbing somewhere.

Hmm that's not right. The cut off is $150k

http://www.humanservices.gov.au/cus...y-tax-benefit-part-a-part-b/ftb-b-income-test

Centrelink process an awful lot of payment types. For example there is Carers allowance which is non income tested and is given to people to care for a child/parent who needs additional medical care due to medical condition, disability or frail aged.

 

[rugrat]

We get FTB A and B. my hubby is on a good income, but with 4 kids and myself as dependants, we are classed as 'low income family' (and I know we are doing it tight, luckily We are good with money, so still manage to continue our investing. Although interesting we could not afford to rent anything where we live, so thank god we have a mortgage where the payments are lower then rents in the area). Thing is, a high income doesn't go as far when you are supporting a lot of dependants, if we only had one kid or even just two kids, the money would go ALOT further. The amount I get in FTB is not much, but it pays for half our groceries once a fortnight.

The thing is, it is a tax benefit - just like negative gearing or anything else. Those who don't get it are always going to whinge that it shouldn't be given in the first place.

I for one am greatful for the extra help; especially as me entering the workforce would actually have us worse off financially unless I was earning at least 60k per year (by the time you consider childcare, before and after school care, holiday care for four young kids, and the fact I would no longer receive FTB at all). The system isn't set up to encourage SAHM's back into the workforce - but I don't mind, because I would likely 'choose' to stay home and raise my kids even if it did.

 

[CHAOS]

Where the unfairness lies is in

A - 1 income earner can earn up to 150k and receive FTB. This family will also get Child care benefit (Both get child care rebate) - and dependant spouse.

B - 1 income earner earns 75k second income earner 40k and they get no FTB becasue second income earner earns over 24k. and 2nd income is lost in childcare becasue CCB is lost also.

People in situation B are disadvantaged.

C - My in laws have separated and two dependants. Mum earns 80k, Dad earns 100k. Combined parental income 180k - over the threshhold! But they have chosen to be 50 percent parents. They are entitled to full FTB - or 50% each


And then there is Private Health Insurance
IMHO it is the families where there are two parents working to support their family and take responsibility that are getting shafted. No FTB for them and now they have to pay the Medicare Levy Surcharge anyway.

People that have high incomes, usually have studied and or worked really hard for those incomes. They have made sacrifices along the way. I think it is unfair that they are punished for this. Why do they have to go to work to buy a plasma TV when some low income people don't have to go to work to buy their TV becasue FTB pays for it.

We all make life choices at some stage that determine our incomes and opportunities - no matter what background we come from.

If you are going to give out FTB then you give it to everyone or not at all.

 

[dan c]

Where the unfairness lies is in

A - 1 income earner can earn up to 150k and receive FTB. This family will also get Child care benefit (Both get child care rebate) - and dependant spouse..

No, you can't get dependent spouse AND FTB. It's one or the other.

B - 1 income earner earns 75k second income earner 40k and they get no FTB becasue second income earner earns over 24k. and 2nd income is lost in childcare becasue CCB is lost also.

I think a family in this situation would still get some FTB Part A, but I may be wrong. They would also be paying significantly less tax than the family in 'A'. The second earner on 24k would be paying about $900 tax total.

C - My in laws have separated and two dependants. Mum earns 80k, Dad earns 100k. Combined parental income 180k - over the threshhold! But they have chosen to be 50 percent parents. They are entitled to full FTB - or 50% each

I'm not sure how this works, but if they are separated then the 'family' income is just their income. It wouldn't be combined for FTB purposes.

But I see your point about the family in C compared to B. The problem with welfare of this sort is that it promotes thinking along the lines of, "C is getting some FTB, why aren't I". Instead of being grateful for what we actually receive, people compare themselves to their neighbour / brother / sister etc.

And then there is Private Health Insurance
IMHO it is the families where there are two parents working to support their family and take responsibility that are getting shafted. No FTB for them and now they have to pay the Medicare Levy Surcharge anyway.

Only if they earn over $168,000. This gets back to my point about a sense of entitlement. THey are not getting shafted, they are paying for their own kids. And they only pay the surcharge if they don't have private health cover.

People that have high incomes, usually have studied and or worked really hard for those incomes. They have made sacrifices along the way. I think it is unfair that they are punished for this. Why do they have to go to work to buy a plasma TV when some low income people don't have to go to work to buy their TV becasue FTB pays for it.

They aren't being punished, they are rewarded by earning higher wages. Not getting FTB isn't a punishment, it means you don't need it. Why should the government pay you if you don't need it?

We all make life choices at some stage that determine our incomes and opportunities - no matter what background we come from.

If you are going to give out FTB then you give it to everyone or not at all.

That's a pretty simplistic way of looking at things. FTB and the like should get back to being welfare for the genuinely needy. Unfortunately, as you have shown, it's seen as a handout for the middle class, and everyone feels entitled to it.

 

[dan c]

People that have high incomes, usually have studied and or worked really hard for those incomes. They have made sacrifices along the way. I think it is unfair that they are punished for this. Why do they have to go to work to buy a plasma TV when some low income people don't have to go to work to buy their TV becasue FTB pays for it.

My wife and I made sacrifices and worked hard at uni (well, my wife did...) and secured good, well paying jobs. For this, we paid back $50,000 in HECs between us, we receive a 20% rebate on our health insurance (not 30% anymore) we get no FTB.

My sister and her hubby earn about 2/5ths of what wife and I earn, they get the full 30% rebate, FTB, pay much less tax and had no HECS bill.

Do I feel jealous that they are getting these handouts? Would I swap with them? HELL NO!!!

I don't care whether there FTB funds the new TV. It's no business of mine.

They need it, we don't. I'll take the extra $100,000 of income that we work for.

 

[Ideo]

My wife and I made sacrifices and worked hard at uni (well, my wife did...) and secured good, well paying jobs. For this, we paid back $50,000 in HECs between us, we receive a 20% rebate on our health insurance (not 30% anymore) we get no FTB.

My sister and her hubby earn about 2/5ths of what wife and I earn, they get the full 30% rebate, FTB, pay much less tax and had no HECS bill.

Do I feel jealous that they are getting these handouts? Would I swap with them? HELL NO!!!

I don't care whether there FTB funds the new TV. It's no business of mine.

They need it, we don't. I'll take the extra $100,000 of income that we work for.

Yep.

I used government support networks (austudy) when I was a student because my family had no money, and working alongside studying still meant that I was struggling to survive.

Now, I earn good money, I pay my HECS debt and don't get any of those things. My partner works. I work. We have no kids. We earn a comfortable amount. I don't need nor do I want any handouts.

Although one of my employees is on 90k, her husband is on similar and was talking about how unfair it was that she didn't get some middle class welfare payment any more and how she was going to struggle

 

[Dazz]

I agree with the thrust of your post dan c. The majority of it rings true.


This quoted section below however is waaay of course.

I don't care whether there (sic) FTB funds the new TV. It's no business of mine. They need it, we don't.

I would contend that as a taxpayer, it is all our business.....and if they are spending their benefit on upgrading TVs, then clearly no, they do NOT need it.

 

[dan c]

This quoted section below however is waaay of course.

I would contend that as a taxpayer, it is all our business.....and if they are spending their benefit on upgrading TVs, then clearly no, they do NOT need it.

It's our business to a point, but governments don't put restrictions on what FTB recipients can and can't do with their money.

Maybe they should. But I'm sure that would rattle a few cages.

FWIW, I was using the TV as an example, as the poster had done previously. A new plasma can be bought for 300 bucks, it's hardly an extravagance.

 

[HiEquity]

I hate how complex this all is. FTBs, Baby bonuses, medicare levies / surcharges, low income support etc etc etc. The taxation act, together with the Centrelink system, is just a heap of complexity and all it really does at the end of the day is provide work for a whole heap of accountants out there.

What would be wrong with ditching all these "family" benefits and using the money to get the "progressiveness" of income tax out of the picture and align it more with the company tax rate? As well as getting a decent tax free threshold (we have made a step in the right direction there at last) and a genuine safety net to maintain the dignity of the unemployed while they look for work (which we roughly have already) and reasonable pensions for disability, veterans and the elderly, such that we can all live in a civilised society (ditto)?

Steps to broaden the base of taxation in a simple way a la GST and (dare I say it) carbon tax help reduce the burden of income taxation and help maintain an incentive for people to earn.

Anyway, back to the real world...