Parenting Payment Cuts – will you be affected?
As part of the 2012-13 Budget announcement, the Australian Government outlined proposed changes to Parenting Payment that will affect single and partnered parents who have been receiving Parenting Payment prior to 1 July 2006. The government has also made changes to the income test for single principal carer parents receiving Newstart Allowance.
Parenting Payment Changes
The changes are being made to bring all parents receiving Parenting Payment under the same eligibility requirements. Since 1 July 2006, eligible parents claiming Parenting Payment could continue to receive payments until their youngest child turned six (if on Parenting Payment Partnered) or eight (if on Parenting Payment Single). However, eligible parents who started claiming Parenting Payment Partnered or Parenting Payment Single prior to 1 July 2006 could continue claiming payments until their youngest child turned 16.
From 1 January 2013, all Parenting Payment recipients will be treated equally. The change to Parenting Payment means that all parents on Parenting Payment in similar circumstances will be subject to the same rules and treated in the same way, regardless of when they claimed payment.
Parents who have been receiving Parenting Payment prior to 1 July 2006 will be transitioned off Parenting Payment earlier than under current rules. Recipients whose youngest child is already aged six (for partnered recipients) or eight (for single recipients) or older will be affected immediately from 1 January 2013. Recipients whose youngest child is aged less than six (for partnered parents) or eight (for single parents) will lose entitlement to Parenting Payment as their youngest child reaches the relevant age.
Parenting Payment recipients will progressively transition to other suitable income support payments, such as Newstart Allowance, subject to meeting the relevant eligibility requirements, or off income support and into employment.
Changes are also being made to participation requirements. For most recipients who already have participation requirements, there are no new responsibilities for Parenting Payment recipients moving to Newstart Allowance. All parents who have been receiving Parenting Payment prior to 1 July 2006 have had participation requirements once their youngest child is seven; newer recipients must meet participation requirements when their youngest child turns six. From 1 January 2013 all recipients will be treated equally and have participation requirements when their youngest child turns six.
All parents on Parenting Payment and Newstart Allowance are eligible for individually tailored employment services. Parents will also have access to professional career advice to assist them guide their job search activity. Parents will continue to have access to the significant child care assistance and support that is already available.
Newstart Allowance Changes
From 1 January 2013, all single principal carer recipients on Newstart Allowance will have a new income test taper rate. This new rate will apply for all single principal carers, regardless of whether they are transitioning from Parenting Payment or if they are already receiving Newstart Allowance.
The existing Newstart Allowance taper rates for all single principal carers will be replaced with a single, lower taper rate of 40 cents in the dollar for income above $62 per fortnight from 1 January 2013.
All other Newstart Allowance customers will be subject to the usual Newstart Allowance income test of 50 cents in the dollar for fortnightly income between $62 and $250 and 60 cents in the dollar for income above $250 per fortnight.
If you have further questions about the changes to parenting allowances please do not hesitate to contact the experienced team of accountants, lawyers and tax agents here at The Quinn Group. For more information on this, or any other accounting services, submit an online enquiry or call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.