Single parents will, once their youngest child turns 8, start to pay more tax, how will this happen I hear you ask?
While the youngest child is under 8 a single parent will receive Parenting Payment Single. When the child turns 8 the parent will stop receiving Parenting Payment Single and start receiving the Newstart Allowance.
How does receiving Newstart effect your tax differently to Parenting Payment Single? The answer is that the parenting payment is treated as a pension and the tax payer receives a larger tax offset.
Newstart entitles you to a Beneficiary Tax Offset of 15% of the amounts of Newstart payments greater than $6,000, if your Newstart payment is $7,000 you will get an offset of $150. If Newstart is $5,000 the offset is nil.
Parenting Payment Single entitles you to the Pensioner Tax offset of $2,240 if your taxable income is below $20,934. So what this means is if you receive $7,000 0r $6,000 0r even $20 of Parenting Payment Single you will receive and offset of $2,240.
I will do a quick example for the difference in tax that you would pay once your child has turned 8. I am working on a total income of $20,000, ($8,000 earned as Centrelink money and $12,000 earned from wages). These figures do not reflect Centrlink’s payments or income tests.
If your child is older than 8 years and you receive the Newstart allowance then the tax payable would be $600.
If your child is younger than 8 years and you receive Parenting Payment Single, for the 2009 year your tax payable would be $nil.
If you earn $1 of Newstart Allowance your tax free threshold is $14,000 including the low income tax offset where as 1$ of Parenting Payment Single will give you a tax free threshold of $25,300 including the low income rebate.
Hi, I have an 18 month old and am receiving parenting payment single I earned $14,000 from parenting payment single and $4,000 from work earnings. Could you please advise what tax I should have paid on these earnings as I don’t think work has taken tax correctly. Thanks
Based on $18,000 of income in the 2010 year the amount of tax payable is $1,800
The tax of $1,800 is then reduced by the low income offset of $1,350 and the balance of $450 is reduced to nil by the pensioner tax offset of $2,230.
So the tax for person receiving parenting payment singe and earning $18k the tax payable is nil.
Hi, I am married, part time Uni student working part time and my husband is on DSP. I don’t think I have paid enough tax on my $28353.00 taxable income with $3842.00 tax withheld. Could you please advise me if my fears are correct?
Thank you kindly
@ M White, Assuming that the $28,353 is your only income, (ie no bank interest, dividends, Centrelink or other income.) then the $3842 should adequately cover the amount of tax that is due.
Hi there im a single mum of a 2 year old…
I was wondering if a FTB offset is different to the Single parenting(pension) tax offset??
Ive received a payment for FTB but when i called centrelink the gentlemen began to tell me its the same thing and he had never heard of an offset for pps
Hi, could you please advise me as to how much Tax I need to pay (if any)? I am a part-time student now but have always been full-time in the past, so I have never done this before.
Newstart earnings: $5350
ABN earnings: $7501.73
PAYG Earnings: $596.
Total Earnings (without centrelink): $8097.73
Total Earnings (with Centrelink): $13,447.73
Thank you!
The low income tax offset of $1350 means that your earnings can be $15k before tax is paid.
Receiving Parenting Payment Single, means that you are eligible for the pensioner tax offset. Family Tax Benefit (FTB) is a payment from Centrelink. Two seperate items
Hi there,
I’m currently recieve Parenting Payment and i’m currently working 15 hrs a week when my child turns 8 and if i’m still working 15 hours a week am i eligible for Newstart?