Family Tax Benefit and your tax return: some common misunderstandings

Family Tax Benefit (FTB) is a government payment to help families with the cost of raising children.

Despite its name, it’s not a tax refund or tax deduction – it’s a social security benefit to help with everyday costs like food, education, clothing, and other child-rearing expenses.

FTB has two parts:

• Part A – the main payment available to most eligible families.

• Part B – an extra payment for single parents or certain single-income families (usually where one parent stays home or works part-time).

Importantly, FTB is paid by Services Australia (through Centrelink), not the ATO.

Eligibility

To be eligible, you must have at least one dependent child in your care, and:

• Your child must be aged 0–15 years, or a full-time secondary student aged 16–19, in your care at least 35% of the time.

• Your child must be an Australian resident.

• You (as the claimant) must meet certain residency rules.

• Your income must be under certain thresholds – FTB is means-tested, with income tests for both Part A and Part B payments.

FTB isn’t a tax refund

• A tax refund is money the ATO gives back if you’ve overpaid tax during the year.

• FTB is a government benefit, separate from the tax system.

• You don’t automatically receive FTB by lodging a tax return, and it’s not calculated in your tax assessment.

Why the name?

• Historically, some family benefits were delivered through the tax system.

• Today, Centrelink delivers FTB.

• Think of FTB as a family assistance payment like the Parenting Payment or Child Care Subsidy, rather than a tax refund or rebate.

How do you claim FTB?

To get FTB, you need to claim it through Services Australia.

Ways to claim:

• Online via your myGov account linked to Centrelink.

• Phone the Families line.

• Visit a Centrelink service centre.

• If you’ve just had a baby, hospitals often provide the Newborn Child Declaration form, which includes a lump sum claim for FTB and other family payments.

Payment options

When you claim, you can choose how you receive FTB:

• Regular fortnightly payments

  • Most families opt for this.

  • You estimate your family’s income for the year, and Centrelink pays you accordingly.

  • After the year ends, they reconcile (balance) the payments against your actual income.

• Annual lump sum

  • You can wait until after 30 June and submit a claim for the year.

  • This uses your actual income (from your tax return), avoiding any overpayment.

  • You must claim within one year after the financial year ends (e.g. for 2024–2025, you have until 30 June 2026).

What happens after claiming?

During the claim, you’ll provide details about your children and estimate your income (if opting for fortnightly pay).

• Services Australia will assess your eligibility.

• If approved:

  • Fortnightly payments will start in your bank account.

  • Or, if you requested a lump sum, it will be paid after you and your partner lodge tax returns and your incomes are confirmed.

Important notes:

• All communication about FTB comes from Services Australia, not the ATO.

• Information appears in your Centrelink online account or in mailed letters.

• FTB will not appear in your tax return paperwork.

• If you receive a lump sum FTB payment, it will be deposited by Centrelink, separate from any ATO tax refund.

Keeping details up to date

If your circumstances change (like your income or care arrangements), you must inform Centrelink.

• This can affect your FTB rate.

• Updating details helps avoid surprises after the end-of-year balancing calculations.