The cost of raising children continues to spiral upwards, even before the big issue of private school fees is considered. Fortunately, the Federal Government recognises this and so provides a comprehensive range of assistance measures, administered by the Family Assistance Office.
One of the extra benefits of implementing our superannuation based strategies is that taxable income for those with dependent children is often reduced to the point where significant Family Tax Benefits are available. When assessing eligibility for assistance, taxable income is adjusted by adding back negative gearing of property, fringe benefits and any tax-free income. Superannuation contributions are not taken into account because they are not fringe benefits for tax purposes.
We've just written to a new client recommending measures that will save $16,000 per year in income tax and provide an annual entitlement to $8,700 in Family Tax Benefits. Also, significant assets will now be accumulating in a superannuation fund to provide for retirement. An excellent result for a GP couple struggling to raise 3 kids.
Family Tax Benefits can be claimed up to 2 years after the end of the relevant financial year either directly from the FAO or when lodging personal tax returns.
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