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Thursday, 10 May 2018
Page: 3643


Mr TEHAN (WannonMinister for Social Services) (09:59): I move:

That this bill be now read a second time.

Australia has a long track record of helping those in need. On the latest available OECD figures, we outlay around 1.87 per cent of GDP on cash payments to families. This puts Australia in the OECD top 10 for payments to families.

This year the government will spend over $19 billion on family tax benefit payments to families and around $2.2 billion on the Paid Parental Leave scheme. To ensure our welfare system continues to help those in need, we must ensure it is strong and sustainable into the future.

These indexation pauses on higher income limits for family and parental payments will extend the current pause on indexation for a further year until 30 June 2021.

This will apply to the family tax benefit part A higher income free area, the family tax benefit part B primary earner income limit, the parental leave pay and dad and partner pay income limits.

In addition, the annual end of year family tax benefit supplement will remain at current levels for three years from 1 July 2018.

Annual indexation of the thresholds and supplements will resume on 1 July 2021.

Families with lower incomes will not be affected by the indexation pauses to income thresholds and limits.

Families with income under $94,316 will not be affected by the indexation pause to the FTB part A higher income free area.

Families where the main earner's income is less than $100,000 will not be affected by the indexation pause to the FTB part B primary earner income limit.

A parent with income under $150,000 will not be affected by the indexation pauses to parental leave pay. And dads and partners with income under $150,000 will not be affected by the indexation pause to dad and partner pay.

Maintaining the existing FTB part A higher income free area at $94,316 for a further year, will affect around 132,600 families with income above $94,316.

Of these, around 119,400 families will receive a reduced rate of FTB part A and around 13,200 families will no longer be entitled to FTB part A. Families who are no longer entitled to FTB part A would have a family income of more than $99,000.

The measure to maintain the FTB part B primary earner income limit at $100,000 per year will affect around 9,300 families. In these families, once the main earner's income increases to over $100,000 they will no longer be eligible for FTB part B payments.

Parental leave pay was introduced on 1 January 2011 and dad and partner pay was later introduced on 1 January 2013. Both payments currently have an income limit of $150,000. Indexation of these income limits has been paused since their introduction.

The family tax benefit part A end of year supplement is currently up to $737.30 for each eligible child in a family. The family tax benefit part B end of year supplement is up to $357.70. This bill maintains these rates for three years from 1 July 2018, with annual indexation to resume on 1 July 2021.

A family's fortnightly assistance will not change under this measure.

Pausing indexation is a lever that has been used by successive governments to ensure our welfare system remains sustainable.

The passage of this bill will contribute to the sustainability of the family and parental payments systems into the future, meaning we can continue to help those that need it most.

Debate adjourned.