Family Tax Benefit, commonly called FTB, can make a meaningful difference to a household budget. However, it is not a tax deduction or a refund generated by your individual tax return. It is a family assistance payment, administered separately from the income tax system, with your tax return often playing an important role in confirming the income used to work out the final entitlement.
For employees, the process can be relatively straightforward. For sole traders, contractors, company directors and families with investment income, it can be more complex. Business profits, deductions, salary packaging, super contributions and changes in family circumstances can all affect the income assessment used for FTB.
What Family Tax Benefit is and who may be eligible
Family Tax Benefit is a two-part Australian Government payment designed to help eligible families with the cost of raising children.
FTB Part A is paid for each eligible child. FTB Part B is paid per family and is intended to provide additional assistance to single parents and carers, as well as some couple families where one person has a lower income or is primarily caring for children.
In broad terms, eligibility depends on factors including:
– the age and circumstances of the child
– the level of care you provide
– your family income
– your residency status
– whether your child meets relevant study requirements, where applicable
– child support arrangements in some cases.
For FTB generally, you must care for a child at least 35% of the time. A child may be eligible if they are aged 15 or younger, or are aged 16 to 19 and meet the applicable full-time secondary study requirements.
FTB is not limited to biological parents. Depending on the circumstances, eligible carers can include foster parents, legal guardians, adoptive parents, step-parents, grandparents and same-sex couples.
Residence rules also apply. Both the claimant and child generally need to be living in Australia when the claim is made, and must meet the relevant citizenship, visa or residency conditions.
How much you could claim through FTB Part A
FTB Part A is calculated for each eligible child. The amount you may receive depends on your family’s adjusted taxable income, the age and number of children in your care, your percentage of care and other factors such as child support.
For the 2026–27 financial year, the maximum fortnightly FTB Part A rates are:
– $235.48 for each child aged 0 to 12
– $306.46 for each child aged 13 to 15
– $306.46 for an eligible child aged 16 to 19 who meets the study requirements.
The base rate is $75.60 per child per fortnight. Importantly, this is not necessarily the minimum payment. Your entitlement can be lower than the base rate where your income is high enough for the income test to further reduce the payment.
The FTB Part A income test uses family adjusted taxable income. For the 2026–27 financial year, a family may receive the maximum rate where adjusted taxable income is $69,131 or less, subject to the other eligibility rules.
Where family adjusted taxable income is above that amount, the payment begins to reduce. The first income test reduces the maximum rate by 20 cents for each dollar of income above the applicable threshold, until the base rate is reached. A further income test can then reduce the payment by 30 cents for each dollar of income above $123,078, until the entitlement reaches nil.
There is no single FTB Part A cut-off that applies to every family. The point at which payment stops depends on the number and ages of children in your care and may be different where you receive Rent Assistance or the Energy Supplement.
FTB Part A may also include an annual supplement. For the 2026–27 financial year, the FTB Part A supplement is up to $970.90 for each eligible child. It is generally considered after the end of the financial year when your entitlement is balanced.
To receive the FTB Part A supplement, your family adjusted taxable income must be $80,000 or less. This supplement income test applies even where a family receives an income support payment.
Child support can also affect FTB Part A. If you or your partner care for a child from a previous relationship, you may need to take reasonable steps to obtain child support to receive more than the base rate. Child support or spousal maintenance received can also reduce the Part A rate under the Maintenance Income Test.
How much you could claim through FTB Part B
FTB Part B is assessed differently to Part A. It is paid per family rather than per child, and the income rules focus particularly on the income of the higher and lower earners in a couple.
For the 2026–27 financial year, the maximum fortnightly FTB Part B rates are:
– $200.34 per family where the youngest child is aged 0 to 4
– $139.86 per family where the youngest child is aged 5 to 18.
An annual FTB Part B supplement may also be payable after balancing. For the 2026–27 financial year, this supplement is up to $478.15 per family.
Single parents and carers may be eligible for FTB Part B if their annual adjusted taxable income is $124,327 or less. If they meet that income requirement, they may qualify for the maximum rate, subject to the other relevant conditions.
For partnered families, the rules are more targeted. Generally, the youngest child must be under 13 for a couple to qualify. The higher-income earner must have adjusted taxable income of $124,327 or less.
The lower-income earner can earn up to $7,154 per year before their income reduces the payment. Above that amount, FTB Part B reduces by 20 cents for each additional dollar of income.
A partnered family may still receive some FTB Part B where the lower-income earner’s income is below:
– $35,661, where the youngest child is under 5
– $27,777, where the youngest child is aged 5 to 13.
FTB Part B is not payable for periods when either member of a couple receives Parental Leave Pay. This is one reason it is important to update your circumstances promptly if your work, leave arrangements or household income changes during the year.
Why your tax return matters, even though FTB is not a tax deduction
Family Tax Benefit does not reduce your taxable income in the way that a work-related deduction, business expense or deductible super contribution may do. It is also not a tax offset that is calculated directly on your individual income tax return.
Instead, the connection works the other way around. After the end of the financial year, Services Australia uses income information to check whether you received the correct amount of FTB during the year.
If you and your partner need to lodge tax returns, the Australian Taxation Office provides the relevant income information after those returns are processed. Services Australia then uses that information to balance your FTB entitlement.
The balancing outcome may be:
– a top-up payment, if you were paid less than your final entitlement
– no adjustment, if the correct amount was paid during the year
– an overpayment debt, if you received more than your final entitlement.
If you or your partner do not need to lodge a tax return, you still need to tell Services Australia that you are a non-lodger and confirm the relevant income information.
This is particularly important for small business owners. A sole trader may receive FTB instalments based on an income estimate early in the financial year, then earn more than expected because of a stronger trading period. Once the tax return is lodged and the final business income is known, the family’s FTB entitlement may be lower than the amount paid during the year.
Adjusted taxable income is not always the same as taxable income
One of the most common misunderstandings is assuming that FTB is assessed only on the taxable income shown on a tax return.
FTB uses adjusted taxable income, often called ATI. This is broader than taxable income and may include amounts that do not appear as ordinary taxable income in the same way.
For family assistance purposes, adjusted taxable income can include:
– taxable income
– reportable fringe benefits
– reportable superannuation contributions
– total net investment losses
– foreign income
– tax-exempt foreign income
– certain tax-free pensions and benefits.
Child support paid may reduce adjusted taxable income for family assistance purposes.
This distinction matters for business owners and higher-income employees. For example, deductible expenses can reduce taxable business profit, but some other amounts may still be relevant when working out adjusted taxable income. Similarly, salary packaging arrangements and reportable employer super contributions can affect the FTB calculation even though they may not be received as ordinary cash wages.
A practical example
Consider a sole trader with children who estimates their annual income conservatively at the start of the financial year and elects to receive FTB fortnightly.
During the year, the business secures additional work and the final taxable profit is higher than expected. The family may also have reportable super contributions and investment losses that are relevant to adjusted taxable income.
When the sole trader lodges their tax return, the final income details are passed through for FTB balancing. If the family’s final adjusted taxable income is above the estimate used during the year, the fortnightly FTB payments may have been too high. The result could be a reduced top-up, no top-up, or a debt that needs to be repaid.
This does not mean a business owner should avoid legitimate deductions or make tax decisions solely to influence FTB. It does mean that tax planning, business cash flow and family assistance estimates should be considered together.
Managing FTB during the year and at tax time
Families receiving FTB by fortnightly instalments should keep their income estimate current. Services Australia asks families to update estimates before the start of a financial year and whenever circumstances change.
Changes worth reporting promptly can include:
– a new job, pay rise or increased work hours
– a significant change in sole trader income or business profit expectations
– starting or ending a relationship
– a partner returning to work
– changes to a child’s care arrangements
– changes to child support
– a child turning 16 or leaving full-time secondary study
– receiving Parental Leave Pay
– moving overseas or changes to residency circumstances.
Families can choose to receive all, part or none of their FTB entitlement during the year. A family with irregular business income, commission income or uncertain investment income may prefer to receive less through fortnightly instalments and wait for balancing. This can reduce the risk of receiving more than the final entitlement, although it may also mean less cash flow during the year.
There is generally a 12-month period after the end of the financial year to confirm family income for FTB or to submit a lump-sum FTB claim for that year. An extension of time to lodge an income tax return does not automatically extend the FTB time limit.
It is also worth remembering that an FTB debt can affect a tax refund. Where there is an FTB overpayment or certain existing debts, an income tax refund may be applied against that amount through the tax debt recovery process.
The key takeaway for families and business owners
Family Tax Benefit can provide valuable support, but the amount is based on more than your weekly pay or the taxable income figure you expect to see on your return. Your family structure, care arrangements, child support, adjusted taxable income and the accuracy of your income estimate can all affect the final result.
For the 2026–27 financial year, FTB Part A can include fortnightly payments for each eligible child plus a possible annual supplement. FTB Part B may assist eligible single-parent families and some couples with a lower-income earner. However, the exact entitlement is highly individual and should not be assumed from headline income figures alone.
This article is general information only and is not personal financial or tax advice. Before making decisions about your tax return, business income estimate or Family Tax Benefit claim, speak with a registered tax agent or accountant, such as, about your particular circumstances.