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Jason Bryce - Business & Finance Specialist



The essential single parent guide to tax time


  • What should I do if I receive Centrelink benefits?
  • How much income means I have to do a tax return?

By Jason Bryce | 8 July 2016




2016 School Kids Bonus - Part 2 - Photo source: Bigstock.com

Get your Centrelink and Medicare payments

sorted for tax time


The 2015 - 2016 financial year has just ended and that means everyone needs to get on top of some basic financial tasks. Even if your only income is a Centrelink pension or benefit and you will not be paying tax this year, you may still need to complete a task on the Express Plus app or at Centrelink online to ensure you get the appropriate Family Tax Benefit and child care payments.

Do I need to complete a tax return?

You need to lodge a tax return if your taxable income is over $18,200 OR your employer has deducted tax from your wages or salary. Check your PAYG payment summary from your employer to see if you have had tax withheld from your pay. Look in the box labelled "Total Tax Withheld."

If your taxable income is less than the tax-free threshold of $18,200 for the 12 months to 30 June 2016, you generally don't need to file a tax return.

Single parent tax return - Image source: Bigstock.com
You need to lodge a tax return if your taxable income is over $18,200

If you receive the full rate of Parenting Payment, Newstart, Disability Pension, Youth Allowance or Austudy you don't need to file a tax return. However you do need to advise Centrelink that you won't be lodging a tax return this year.

You can complete an online check at the tax office's website here to make sure. This online form will ask you about your taxable income. Some Centrelink payments are taxable income and some are not.

What is taxable income?

Income earned from employment and investments (generally) is taxable income. Some Centrelink payments are also 'taxable income.'

Which Centrelink payments are 'taxable income?'

Generally speaking all Centrelink Income Support payments are classified as taxable income and are added to any income you get from work for the purposes of determining your total taxable income for the year.

Centrelink Income Support payments include


  • Parenting Payment - Single and Partnered
  • Newstart
  • Youth Allowance
  • Austudy / Abstudy
  • Disability Pension
  • Sickness Benefit
  • Age Pension

Centrelink payments that are NOT taxable income include


  • Family Tax Benefits, Part A and Part B and end-of-year supplements
  • Schoolkids Bonus
  • Rent Assistance
  • Child Care Benefit
  • Child Care Rebate
  • Carer Payments for people under age pension age
  • Carer Allowance
  • Crisis Payment
  • Youth Allowance, for students under 16 years of age
  • Supplements and bonus payments

Tell Centrelink you are not lodging a tax return

If you are not lodging a tax return, you need to complete a task on the Express Plus Centrelink to inform Centrelink that you are not required to lodge. This will ensure you continue to get the appropriate level of Family Tax Benefits and childcare payments.

You can also do this online at the Centrelink website.

If you are lodging a tax return:

If you are required to lodge a tax return this year, probably because your income from employment is over $18,200, Centrelink will automatically tell the tax office about any taxable income you received this year. If you complete your tax return via e-tax or through a tax agent, the forms will be pre-filled with your Centrelink payment information.

What is happening with Medicare payments?

If you haven't already, you need to tell Medicare your bank account details. There is no longer any other option. You can only receive your Medicare rebates directly into your account. Go to Medicare online and click on Personal Details to check on your bank account details.

Check your family income estimate for the next financial year

No one likes owing Centrelink money. The best way to try and avoid accumulating a debt is to provide an accurate estimate of your income for the next financial year. From the home page menu, click on Family Assistance, then "Update Family Income Estimate."

Family Tax Benefit supplements - Image source: Bigstock.com


What is happening with Family Tax Benefit end-of-year supplements?

The Family Tax Benefit end-of-year supplement is currently up to $726.35 per child.

The Family Tax Benefit Part B end-of-year supplement is currently up to $354.05 per family.

These supplement payments are used to balance your FTB entitlements with what has already been paid to you during the year.

Assuming you receive FTB fortnightly, you may receive less than the maximum amount if your income during the year is higher than your original family income estimate for the year.

The Turnbull Liberal/National government proposes to phase down these end of year supplements to zero by 2018. This proposal is yet to pass the senate.


Getting on top of these fairly straightforward tasks will maximise your benefits and minimise your end-of-year stress levels. Happy new financial year!

Jason Bryce
Business & Finance Journalist





Further Single Parent reading


When will I get my Schoolkids Bonus?

Single parent anger over Centrelink income management



Have your say on this story - could tax time be made easier for single parents? Comment below!



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go to Jason Bryce's Biography

Jason is a business and finance journalist with 20 years experience, and is also a member of the SingleMum.com.au Expert Opinion Panel. He has a regular weekly column in the Sunday Mail (Brisbane) and writes regularly for the Business Daily section of the Herald Sun in Melbourne and many other newspapers and magazines. Read Jason Bryce's full profile here




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What does it mean to be a single mum?Of course, the

kids

are the most important thing in a single mum's life. Kids are the focus and always have been. But along with the children, there are other matters that can confuse a single mum's life.

Centrelink

plays a big part of a single mother's life, mainly because this is where a large percentage of single mums get their finances from. Centrelink are the source from where the

single mother pension

, or as it is otherwise known, the single parent payment comes from. The single mother pension is a subsistence amount, but just the same, it is money to live on, and so it is important, no matter if it is called single parent payment, single mother pension or whatever Centrelink welfare classes it at the time

Often, single mums come out of a

divorce

or defacto relationship only to find that their troubles have just begun, and find that their first step leads them towards Family Law - it's time to engage a lawyer.
There are more than just Centrelink finance problems to worry about, as mentioned before, but also

child custody

issues. Child custody is something that hits right at the heart of

single mums

. If a single mother's ex husband or ex partner has been a domestic violence perpetrator, the mum may be greatly worried about child custody. They worry that their kids won't be safe with their spouse, who has already proven to be abusive because they caused

domestic violence

, which resulted in a divorce or separation.

Even so,

Family Court

will often still order a form of child custody named

Shared Parenting

. Shared Parenting is a form of child custody division of time or parental responsibility between the parents. Mother's often look for a good divorce lawyer to try to avoid share parenting with an abusive ex-spouse after divorce, however in many cases Shared Parenting is still the outcome after the divorce, no matter how good the divorce lawyers have been. They will often settle for visitation at a contact centre or access centre where fathers or mothers are supervised during child custody access.

Please remember the bigger font words,because we will use it often in our website.