Issue
Is a taxpayer entitled to Family Tax Benefit (FTB) under section 21 of the A New Tax System (Family Assistance) Act 1999 (Family Assistance Act), where their child is in receipt of Youth Allowance from Centrelink?
Decision
No. A taxpayer is not entitled to family tax benefit under section 21 of the Family Assistance Act where their child is in receipt of Youth Allowance from Centrelink, as the taxpayer is not considered to have an FTB child.
Facts
The taxpayer has a 17 year old child who was a recipient of Youth Allowance from Centrelink throughout the year of income.
Reasons for Decision
Section 21 of the Family Assistance Act provides that for a taxpayer to be eligible for FTB, they must have at least one FTB child.
Subsection 22(4) of the Family Assistance Act provides that an individual is an FTB child of the adult if: • the individual is aged under 18; • the individual is in the adult's care; • the individual is not in the care of anyone with the legal responsibility for the day-to-day care, welfare and development of the individual; and • the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult.
However, an individual cannot be an FTB child of another individual (an adult) if any of the exceptions outlined in section 22A of the Family Assistance Act apply. One such exception is if the individual is in receipt of a social security benefit.
In general terms, FTB Part A is paid for dependent children under the age of 25 who do not receive certain social security or educational payments, such as the Youth Allowance. Where the dependant is in receipt of social security or educational payments, such as a Youth Allowance, the dependant is not an eligible FTB child and there is no entitlement to FTB Part A.
FTB Part B is paid until the youngest child turns 16 or until a full-time student turns 18 and who do not receive certain social security or educational payments, such as the Youth Allowance.
Accordingly, as the taxpayer's child is in receipt of Youth Allowance, the taxpayer does not have any FTB children and is not eligible for FTB.