Hi Everyone,
My annual income is $102,000 per year and I am a single earner with a family of four.
From 1st of July 2015, the Govt. is reducing the FTB part B income threshold to 100,000 which will reduce my FTB B payments to zero. At the moment it is around $3950/year.
Just wanted to discuss ideas for reducing my income by $2001 to bring it down to $99,999 to continue receiving the payments.
Your ideas are welcome. I guess many other people will be in the same boat as well.
Salary sacrifices are not counted in as reportable super contributions. You have to still add in the total amount sacrificed for the income test for FTB.
Mmm, yes they are. It's only post tax super contributions you don't need to report because you've already been taxed on the income.
Mmmm .. proof ?
"Reportable Super Contributions" refers to contributions that go into the super fund that are concessionally taxed, such as Member Salary Sacrifice contributions and Employer Contributions. Member Salary Sacrifice contributions will reduce a person's Taxable Income, however it won't reduce the Adjusted Taxable Income amount that the Family Assistance Benefit calculation is based on.
Post Tax Super Contributions are not classified as "reportable" since it does not reduce Taxable or Adjusted Taxable income. There is no initial tax benefit in contributing post tax.
(The benefit of contributing post-tax is the concessional rate that the investment earnings are taxed at).
It is, however, still reported to the ATO by the Super Fund to track the total amount contributed because there is a limit on the amount each year before a penalty tax kicks in.
just spend a few more $000's in deductable expenses, and ur EOFY tax tally will drop below the threshold. QED.
if you work for government, consider meal entertainment. It not reportable on your group certificate.
Adding extra money into Superannuation from Salary sacrifice will help (if your employer allows)
This won't work. Government counts personal super contributions as income for family tax purposes. They closed this loophole a few years ago now.
I don't believe this change has passed the senate yet, so might be worth double checking.
In any case, the cut off is for taxable income, so some deductions would be the way to go. Check what you are claiming, and at worst, consider a charitable gift come June 30.
And following up, there are a number of eligibility changes to FTB. Some appear to require legislation, and have not passed, others don't appear to need the legislation.
The FTB-B income cap looks like it will go ahead.
FTB summaries of changes here:
http://www.humanservices.gov.au/corporate/publications-and-r…
Yawn… make me a strong coffee would ya arctic? Your constant anti-liberal chanting is putting me to sleep.
You might have to consider another strategy.
From http://www.superguide.com.au/how-super-works/salary-sacrific…
Q: I was wondering what you know about salary sacrifice super being included in Family Tax Benefit family income calculations?
Trish’s response: Since 1 July 2009, salary sacrificed super contributions have been included when assessing income for the Family Tax Benefit (FTB). The income test used for the FTB is the same test as the one used for the Commonwealth Seniors Health Card.
Before July 2009, adjusted taxable income, for the purposes of FTB included:
Taxable income (includes salary and wages, lump sum payments, and income from: business or self-employment, investments, real estate, taxable Government pensions and benefits; and other taxable income)
Adjusted fringed benefits
Net rental property losses
Certain exempt income from government payments (these are very specific payments)
Target foreign income
Child maintenance paid to another person (deductible child maintenance expenditure).
Since 1 July 2009, adjusted taxable income also includes:
Income that is salary sacrificed to superannuation, or super contributions claimed as tax-deductions (known as reportable super contributions), and
Net financial investment losses.
A fuller description of the income tests for Family Tax Benefit payments can be found by clicking on the following Department of Human Services website links:
Income test for Family Tax Benefit Part A
Income test for Family Tax Benefit Part B
Note: My response only relates to the question regarding whether salary sacrificed super contributions are included in adjusted taxable income for FTB calculations. If you want more information on FTB and eligibility then I suggest you visit the Family Assistance Office website.
I'm going to get negged to oblivion for this but it is curious that someone earning $100,000 per year still has access to welfare payments.
I have same question. How can family have "Family Tax Benefit Part B" with $100k income.
Dude I'm 33 and on 100k a year, supporting my wife and kid and I get $150 a fortnight from Centrelink. Maybe it's because I have 25k in deductions a year? I'm not sure.
Gotcha.
25K in deductions? Do you own your own business? That seems like quite a lot!
@massafiri: I wondered that too. Maybe he's running a Home Office, you can get a tidy total to deduct. It couldn't be negative gearing from property investment, cos if it was, it would be counted in as adjustable taxable income and he wouldn't be eligible for FTB B.
investment property… But as I've just been told below, investment deductions dont count :-(
@tomski182: But you're already in a good place cos you have investment property, just think in 5 yrs it would have gone up 25%, (50% in city NSW)LOL
2 kids…
Query the Government.
To me 100k sounds like a good limit, though it should be sliding down scale, rather than just 100% cut off.
150k though is just stupid and poor money management.
If two people earn $50k each they pay much less tax than a single income earner earning 100k, this is because each person has access to a tax free threshold so marginal tax rates are much lower.
The FTB-B (and dependent spouse offset) is meant to counteract this but they are removing it now and they already got rid of DSO.
It's a disgrace. If you are a good earner and are able to afford to have your wife stay home with the kids for those first few crucial years everyone looks at you with envy and thinks you're greedy. Never mind that you have to work yourself into an early grave to earn the money.
Bare in mind that a taxable income of $100,000 means you'll lose almost $25,000. So you're left to support a family of 3 or more people on $75,000 a year with cost of living continually going up at much more than stated official inflation figures would suggest. $12.5k per year (family of 6) to $25k (family of 3). And let's not forget you also pay GST on everything you buy. I don't know about you but that's not how I define rich. Never mind if you fall ill or lose your job towards the end of the financial year.
If you happen to go over the threshold for the year and you're getting fortnightly payments be aware you will have to pay them back.
Meanwhile if you do send your wife back to work you'll get so completely bilked for child care costs that it can actually be a negative value proposition. Heaven help you if you bought Johnny Howard's "1 for mum, 1 for dad and 1 for Australia" BS a few years ago….how about 1 for the poor house.
Soon the only ones permitted welfare in this country will be the corporations.
Don't forget HECS, to earn $100k you probably have a uni degree and hence HECS debt you're paying back $8k a year. Even a 3-year commerce degree costs $26k now, let alone postgrad or if uni fees get deregulated.
Pitty those that dont have kids have to pay ALL the taxes to support the kiddies and families.
Poor you. When you're in your 50s or 60s and you need medical attention be sure to let your doctor know you resent having had anything to do with paying tax to support him so he can give you the extra special rate. Ditto for any other service you use including mechanics, plumbers, sparkies and other tradies, down to the person who'll be tasked with looking after you in a nursing home.
Ever heard "It takes the village to raise the child"? You participate in a society. You expect that society to continue. That means kids. That means you pull your weight and stop whining about supporting those who build the society you take for granted.
http://www.news.com.au/national/baby-bonus-blamed-for-rise-i…
I have heard the saying "It takes the village to raise the child".
I'm trying to remember another saying though… something about apple, and tree, and quite possibly also falling.
You're using the outlier of scum parents who lock their kids in a hot car illegally while they purchase takeaway for themselves as an argument? Weak! Most of the parents I know would give body parts for their kids.
@TRS-80: Is that legit? $26000 ?! damn!
Got mine for ~$6000 back in the day. (this century) probably should post this as a deal*.
*time machine required
@Son ofa Zombie: Actually, it's even more now (Wikipedia was out of date), Commerce is in the top HECS band so you can be charged up to $10,266 per year. Assuming a 3 year degree, that's $30k straight up.
Soon the only ones permitted welfare in this country will be the corporations.
Its as if you had a crystal ball
@xyron
I understand your point
But you are from Adelaide where as the OP says they are from Sydney, so $100K PA as a SINGLE wage earner is harder to get by on than someone living where you do.
Yes they could move to a state like SA where costs are lower, but that requires a lot of effort and can they get the same type of job etc
So rather than judge the individual, just vote for a party that will get rid of all government unfair excessive payments.
But be careful, that may also mean subsidised jobs in Industries we cant sustain like the Submarine Corporation.. :)
But then who would build the canoes?
$50b spent in AU is better than $50b spent in Europe/Japan.
At least part of the 50b will get returned instantly as gst+income taxes.
The rest goes on the Visa recycled through buying imported chineese goods and food.
it is curious that someone earning $100,000 per year still has access to welfare payments.
It's not "welfare". The OP is paying a large amount of tax on his $100k income & is getting a part of this tax back from the government.
It's no different to a person claiming work expenses or income protection premium payments to minimise their tax.
If rich people can set up family trusts to reduce their tax, and large corporations like Google can shift profits overseas to reduce their tax, then why shouldn't middle-class people pursue legal strategies to try & reduce their tax ??
I agree with you that the rich get plenty of breaks through profit shifting, trusts etc and the balance needs to shift, but that doesn't change the fact this is probably the best example of middle class welfare.
The reason why Australia is in debt and cannot pay it off is because everyone and every corporation is practising tax minimization. If the government was willing to go after tax cheats (eg Liberal party donators), our economy would be running a surplus in no time.
Patriotism means supporting your country, and the best way to do that in the modern world is to pay taxes. People and firms that avoid paying tax are stealing from their fellow citizens. It is very expensive to run a socialist economy with free (or heavily subsidized) schools, hospitals, pharmaceuticals, universities, public transport, roads, parks, housing, plus a huge bureaucracy and lots of people receiving welfare.
… because everyone and every corporation is practising tax minimization. If the government was willing to go after tax cheats …
Having a strategy to minimise tax is not the same as being a tax cheat.
Why would anyone, who works hard for their money, not try to minimise their tax? I think that given the opportunity, noone would say no (minimising within the law though).
I'm a single dude so I don't get any real family tax benefits, etc and I used to cringe at the amount of tax I see on my tax papers from my company. Sure, I have taken steps to reduce that, but everything I've done is within the law. Therefore, I object to being referred to as a tax cheat.
If there was a government-run shop that was selling something for twice the price of the private shop next door, would your "patriotism" kick in and make you buy from the government store to "support your country"?
Tax cheating is a completely different thing - people who deal in cash and don't declare their income is one kind of tax cheating. I'm sure there are others, but I'd say that a tax cheat is someone who actually breaks the law to avoid paying tax.
Whenever there's a tax break for higher income earners, there's always people who will whinge about the "rich" getting more benefits - they are forgetting that these so-called rich people pay a lot more tax than they do and that "benefit" is just a reduction in the amount of tax that they have to pay.
No negging here, I too wonder the same. There are people on lower than average salary of $72,000 with children. I believe they are entitled.
no they are just screw'd
just because they're screw'd doesnt mean everyone else should be too
Those under 72k get other benefits as well
I would love to know how to afford 3 Mercedes and 4 yachts with four kids and $100,000
family of four
I thought that meant 2 kids and 2 parents.
Maybe it does. Even then…
If you can't afford that many kids, don't produce that many kids.
Not sure why you are being down voted. It's a pretty fair comment.
He never mentioned he couldn't afford to raise his kids. He is seeking advice to secure the family tax benefit given his circumstances.
@Dozingquinn: So if he can afford his children , why is planning to bend over backwards to get family tax benefits?! Wouldn't it be fairer that that money goes to another family who actually needs it?
@Jar Jar Binks: Because this is Australia and everyone wants a slice of the pie, since we've always been made to think it's a gynomous pie.
This decision is up to him. He was asking for advice on how to secure the benefit. What's legal and what's moral are two different things.
You pay almost $25k in tax. So that's $75k you get to use for that family of 6 for a year. Food, clothing, medical, education, shelter are just the minimum.
Yeah poor guy, he might have to start scavenging through the piles of junk on clean up week to find some birthday and xmas presents for the kids.
@superduper: Hey I'm offended. I scavenge, I do that every year and find treasures to take home! Not for Xmas gifts but you'd be amazed the things people throw out and they like my things too. It's called 'recycling' and we are doing our bit to save the environment.
Yeah I was being smart, but ironically I picked up a brand new looking bike for my daughter on clean up week for xmas lol. If you hit the wealthy areas you can definitely find some good stuff.
A man with spouse and 2 kids has $75k = $18,750 per person per year. How about I give you $18,750 and see what wonderful life of luxury you can afford on that. Don't forget you're paying 10% GST…15% soon if this govt gets its way.
Well I have 2 kids, only make 60k before tax, have hecs repayments, pay off a house, have all the regular bills etc. Fair enough I don't live in an expansive capital city, but I'd give up family tax benefit B in a second to increase my income to 102k.
The government has been making changes in an attempt to recover from the mess they were left with from an incompetent labour government. I think these people doing it tough on higher incomes run their household budgets in a similar way that the previous government ran the country.
It isn't unusual for someone who lives in the country to dismiss the cost of housing etc. I can't do my job anywhere but Sydney. I might be able to get similar work in Melbourne maybe. I have to spend most of my income to live where I can make it. I'm anything but rich.
You can stop right there about the Labor government. This current LNP government has increased the debt by stupid amounts. $24 billion committed in NEW orders for 58 additional F-35 aircraft. The aircraft that is a bad design compromise, won't fit the role it's being bought for by RAAF and is so riddled with problems the software to fire it's gun won't be ready until at least 2019. They made this decision in last year's budget at the same time they were cutting left right and center.
http://www.smh.com.au/national/f35-joint-strike-fighter-purc…
But that's not all. They absolutely refuse to close tax loopholes that mean our top earning companies pay almost no tax quite literally in a lot of cases. So it's okay for the young to get into debt to get an education, the old to go without retiring and Australians to no longer be able to afford medical care, but heaven forbid that we tax these companies or they might leave Australia.
http://www.taxjustice.net/2014/09/29/third-australias-big-co…
"We examined the last decade worth of taxes by the Countries biggest companies. We found 29% have an effective tax rate of 10% or less. Worse, 14% have an effective tax rate of 0%! That means more than 1 in 10 of the top two hundred companies in Australia pay no tax at all.”
http://www.smh.com.au/business/the-economy/asx-200-company-t…
It is unbelievable to me that anyone buys LNP balogna. Labor stinks and has made plenty of mistakes. Corruption seems to run rife in both major parties. But Labor aren't the ones destroying the nation. You cannot justify cutting pensions, health care and education while being so damn wasteful if you want to claim to be a fiscally responsible government. The government is for the people, not for the megacorp.
Pssttt… let me tell you the secret. I own a few yachts, mercedes, bmws etc
Scale models.
Pssttt… let me tell you the secret. I own a few yachts, mercedes, bmws etc
Scale models.
LUXURY! I have to own my yachts and cars as virtual models on a 5 year old laptop! And I can only afford the freeware models! ;-)
With average house prices it takes much more than a single income of 100k to afford an average house let alone a yacht or a Mercedes.
FTB part B is for a sole income earner where kids are involved.
e.g. 2 parents earning 60k will pay less tax than a single parent / sole income earner earning 120k. FTB part B is to offset some of that difference.
Edit: Depending on your job, it may not be too hard to claim a deduction of ~2k in expenses.
If the govt wanted to offset the difference, it would allow combining incomes 0+x, and combine tax free thresholds - 2*18k.
Its so unfair that for many govt rules and tests, they use combined incomes to reduce services when it suits them, and single income tests to grab more $ when it suits them, even if your wife earns zero, sorry, no iota of benefit. Tax free threshold useless, none transferable, or bankable.
I agree, it's such a scam. The government has a regulation on who are couples in a legal sense (and Centrelink are all over this like flies on the proverbial), so I cannot understand why income tax is not assessed in the same way. After all, my income is for my family, not for me.
As an example, a friend of mine tag teams their parents from China to come and look after their kids (for food and flight costs), so they can both work their jobs… They earn more than me and pay less tax. FTB-B is just a poor patch over broken logic.
If there is a need for FTB-B, it should be as an equaliser for cases where there is only one parent.. Divorcees, widowers, etc.
Union fees
You probably get FTB-A as well because you have so many children.
Unfortunately you'll lose this as well because they're changing the eligibility rates which means regardless of number of children the income limits are the same.
he has only 2 kids! Couple with 2 kids. Surely $100,000K should suffice if they are careful and assuming the kids are in public schools.
Not sure if OP has two or four children. I assumed four.
$100k is gross income. After tax (and only one tax free threshold) its not that much in a city considering high house prices and cost of living (insurances etc). It is much less than two partners each earning $50k.
One single income of $100k is $1400 per week.
Two incomes of $50k are $800 each per week $1600 or $200 extra per week.
This means a single income family are $10,400 worse off in the hand than a single income one. That's where the $3950 used to help but the family is still much worse off than having two incomes.
But better off because they have a stay at home parent.
Assume they earn the same and work 20 hours each per week for the combined $100k
FTB part B is only for families on single income.If they were both working, they wouldn't be receiving FTB- Part B.
Having one parent staying at home to look after the kids is often a choice.
airzone on 30/01/2015 - 21:44
[My wife] stays at home, looks after kids, does cleaning, laundry, cooking, shopping, brings me beer. I just have to go to work and do a job I enjoy doing anyway.
Having a stay at home wife/husband sounds heavenly.You can't have your cake and eat it too.
I would rather that the 37% of my wife's and my salary that the government is collecting as tax, goes towards assisting people who genuinely need the money (single parents, pensioners, carers …etc) and not towards subsidising someone's lifestyle.
Just my 2c . Nothing against OP or airzone.
Just to add,the cut-off for welfare paymentsfor single income families was $150k. If you can't provide for your family on a single income of up to $150,000 ,then either look at cutting back on your spending or get your spouse/partner to look for a part-time job.
60% of families with children under 16 receive FTB-B payments.This is not sustainable. Anyone can see that. Something had to be done about it. Reducing the cut-off limits to $100,000 (the dependant partner can still earn up to $5,329 each year without affecting their eligibility to receive ftb-b payments) imho is fair.
Now if only the government were to spend the 1.9 billion they are set to save wisely, say by investing in better infrastructures, better child care , incentives to learn new skills ..etc, then maybe more stay-at-home parents will be willing to re-enter the workforce. How is that not a win-win for everyone?!
You seem to think the only people who use this benefit are lesiurely stay at home parents. My family is single income because our mother was widowed. Not because we wanted to live off one income. Why should we be unfairly disadvantaged because of illness?
My family is single income because our mother was widowed.
I am sorry for your loss:(
Here's what I said about single-parent families :linky
I would rather that the 37% of my wife's and my salary that the government is collecting as tax, goes towards assisting people who genuinely need the money (single parents, pensioners, carers …etc) and not towards subsidising someone's lifestyle.
I'm pretty sure the nation laughed when both Labor and Liberals announced that 150k limit
You right on that people. If you have family in Aus you pay no Tax that has to stop. i am all for the cut to welfare.
Yeah it's absolutely heavenly not to be able to send your wife to work because almost all her wage would go to childcare. If your wife doesn't have a permanent full time job you have to pay for the kids even when she can't find work. Your idea of heaven is a little bit off.
To be fair, my question was about stay-at-parents whose kids go to school.
Your idea of heaven is a little bit off.
My "idea of heaven" was based on the description of someone whose has a stay-at-home wife and what his life is like. I have no idea what's its like to have a stay-at-home partner. I don't have one neither have I been one.
The best thing is to talk to a tax accountant or financial planner.
They'll be able to tailor their advice to your exact individual circumstances.
They'll probably charge you $2k so you might have to do nothing at all lol
Although given the state of the financial planning industry in Australia you're probably better of asking on OzBargain!
May even be lucky and Financial Planners have in fact joined Oz Bargain so they can give their 2 cents worth.
Financial planner, better trying your luck at the casino
In response to the actual question, yes, it is a no brainer to take a $2k pay cut in order to still be eligible.
The issue then is indexation as 100k is not indexed and you'd locking your pay in at 100k whilst inflation deflates your spending power for mere savings from FTB
Try claiming Tax deductible expenses or donations
Upgrade your equipment or enrolled in a course
Buy a computer or software
Depreciate your assets
Buy a few profession job related books then buy an expensive bookcase like brandis did
Tax accountant here.
This is the best solution to OP's problem, and the easiest to do.
Worst comes the worst just donate some money to a registered charity.
Everyone mentioning super contributions etc are very wrong and this is precisely the reason people shouldn't ask a public forum for tax advice.
So does OP actually have to donate $2K in order to directly reduce his taxable income by $2K? It's quite a lot of money isn't it, for a middle income earner? But maybe worth it if he gets back $2K from FBT which he otherwise wouldn't get.
He could look at other options but would really need to chat to his accountant about allowable deductions. (Eg He could he buy a pc and claim it is for work).
As for it being a lot of money for a middle income earner - I really done agree with that as I think any family with an income of 100k should be able to get by. Next year his income will be even higher and he will be looking for further deductions.
At a certain point you need to accept that you are well off and instead work harder towards budgeting rather than trying to figure out methods to keep receiving FTB.
Assuming that he donates whole $2K, not to forget that he saves about $800 in tax too, so effectively his loss (which is for good cause) would be $1400 only.
Take a couple of weeks unpaid leave?
I don't know what kind of job you're talking about. I have 6 months of paid leave saved up because I can't take them whenever I want.
You can convert your leave to cash, its legal, and if your company says it cant, its because they
are in debt, and have no cash.
Just google, cash for leave.
Yes its taxable, big deal, suck it up.
I don't want to convert my leave to cash. The government takes a big chunk and I am still stressed and tired. So no I won't suck it up. People aren't meant to work all year with no break. I'll eventually take it as leave, or I'll take it if I ever leave my current employer, who knows under what circumstance. I won't donate it to this Federal Government in particular.
Can't OP just take some unpaid leave to spend with family?
Maybe get a cash in hand job like so many do to dodge tax for those 2 weeks~
Sadly someone still thinks 100k pre tax per annum for a family is a lot. Living in Sydney with two kids you are not much better than a pensioner, unless your old man has left you a fortune or a house. Stupid housing costs has squeezed these working class into pathetic slaves.
Can try to discuss with your employer as followed:
Salary Sacrifice?
Fringe Benifit?