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Income and govt payments (family tax benefit)
Hello, I’m new here so still learning. I just watched the tax webinar and am curious how declaring lower income on tax return plays into receiving Family Tax Benefit which is income based? I provide an income estimate each year for myself and my husband and my FTB payments are calculated based off that, and balanced at the end of the financial year once tax returns submitted. I am also self employed (currently a contractor through NDIS), so on my tax return I would enter a low income. However this will not then match the income estimate for centerlink. If I lower the income estimate, my payments would increase and I guess the concern is about having to pay that back down the line. Esp since I essentially also work for a govt organization, so would they see that my earnings are higher than what I put on my tax return? Thank you in advance for any help.
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5 Replies
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i don’t know if this will help but I hope so. I was self employed in NZ for years and I was also receiving a benefit. My benefit payments got almost down to zero one year but I liked to have it there as a safety net just in case the work fell away so I tried to keep my income levels down by having a low taxable income. I did this by buying things for the business with the gross and also claiming as many other work related expenses as I could so then the net was all I needed to declare as income. When I started traveling longer distances I was able to get my income level down to zero or even minus by claiming the mileage as a business expense at the rate provided by the tax department. I found out everything I could claim for and collected receipts for everything I claimed. I did my own accounting and I kept all of my records in a clear file folder with one plastic sleeve for each months receipts. We were audited and I was able to take all of my well kept records in and we had no problems.
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Thank you for your reply. I guess I’m more asking what income I should be putting against the benefit? I assume it needs to match what I input on my tax return which will be low to keep below the threshold, and will then make the benefit payments increase.
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Hi Ania,
More Centrelink could mean more tax which equates to less $ in your pocket.
Less tax and lower Centrelink could mean more $ in your pocket.
By combining all the elements, using maths, will determine which level of income will give you the most $$ in your pocket. This is your goal, isn’t it?
Like Morag, if you become your accountant you can figure out the best course of action.
To start if you don’t know, you can ask your accountant questions. Or Centrelink for their income formula. getting the facts will help you decide. Best of luck.
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Thank you so much for your reply. I can see what you are saying and if I understand correctly this would refer to centerlink payments that are classed as taxable income? The payments I receive are not taxable, how much I get depends on my husband’s and mine combined income, the less we earn the more family benefits we would receive. I am a sole trader so on my tax return I could put my income as quite low, which then once centerlink receives that info from the ATO and balances my payments for that year, I would end up with a much higher amount which I am guessing is not a good idea in case I get issued with a bill down the line? I am unsure how likely that is to happen? The payments happened automatically when our first child was born, and I am not yet at the stage of unravelling from all that but that is the eventual plan.
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😀
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