101 Ways to Save Money on Your Tax – Legally! 2017-2018. Adrian Raftery

if you work full time, part time, casually, seasonally, on contract or in a family business. You cannot be working or receiving paid leave during the period of claiming the dad and partner pay.

      

TIP

      In addition to dad and partner pay, families may be eligible for other family assistance such as paid parental leave and the Family Tax Benefit.

      Claims must be lodged by the partner who is eligible to receive the payment. You can claim the dad and partner pay up to three months in advance or within a year following your child's birth or adoption. Employers are not required to pay this entitlement as it is solely administered and paid by the Department of Human Services.

      7 CHILD CARE

      Ask the parents of any young child and they will tell you that their biggest expense is child care. If you have a child who is attending child care services approved by, or registered with, the government you may be eligible for the Child Care Benefit (CCB). You can apply for the benefit at the Family Assistance Office. The amount you receive will depend on the type and amount of care that you use, your income, the reason you are using care and the number of children that you have in care.

      

TIP

      If you have identified that you were eligible for the CCB in previous financial years, but have not received it, you can lodge a lump-sum claim with the Family Assistance Office. You must do this within two years of the end of the financial year for which you are claiming.

      The Child Care Rebate is additional help available to eligible working families to assist with covering the cost of child care. It is a 50 per cent rebate, up to $7500 per child per year per primary claimant, based on the out-of-pocket cost for approved child care after the CCB has been paid. Note that the Child Care Rebate is a different payment from the CCB. To receive the rebate you must first claim the CCB for approved care.

      

TAX FACT

      According to the Department of Human Services, you may be eligible to claim the Child Care Rebate if you:

      • were eligible for the CCB, even if you received no payment because your income was too high

      • passed the work/training/study test

      • ensure that your children under seven either meet the Government's immunisation requirements or have an exemption

      • used approved child care such as long day care, family day care, in-home care, outside school hours care, vacation care and/or some occasional care services.

      Parents can claim up to 50 hours of CCB per child per week dependent on passing a work/training/study test. Once eligible, the rebate is paid weekly or fortnightly by Centrelink based on child care attendance information it receives electronically from your service provider. Even if your child is absent from child care, the CCB and Child Care Rebate can still be paid in some situations. You can receive payments for up to 42 absences per financial year, if you are charged for child care. These absent days can be taken for any reason with no evidence required.

      

TAX FACT

      It was announced in the 2016–17 federal budget that the CCB and Child Care Rebate would be abolished on 1 July 2018 and replaced with the Child Care Subsidy (CCS). Up to 100 hours of carev per child per fortnight will be subsidised, dependent on a new work activity test. Families with incomes under $65 710 will receive a CCS of 85 per cent, reducing to 20 per cent for those families with incomes over $340 000 with no subsidy for family incomes over $350 000. An annual cap of $10 000 will be applied to families with incomes over $185 710.

      

PITFALL

      Under the No Jab No Pay legislation, if your children (up to the age of 19) do not meet the immunisation requirements then you will not be eligible for Child Care Benefit. Your child must be fully immunised, on a catch-up schedule or have a valid exemption in order to receive these payments. Note that while conscientious objection is not considered an exemption category, children with verified medical exemptions by a General Practitioner such as medical contraindication, natural immunity or participation in a recognised vaccine study are allowed.

      8 LOW-INCOME EARNERS

      There are a few tax benefits available if you are a low-income earner, such as when you work part time.

       Low-Income Tax Offset

      The low-income tax offset (LITO) is a tax rebate for individuals on lower incomes. In 2017-18, the LITO will provide a tax rebate of $445 for individuals who earn less than $37 000. The offset is reduced by 1.5 cents for every dollar that your taxable income exceeds $37 000, before eroding entirely at $66 667.

      

TIP

      Low-income earners can effectively earn up to $20 542 each year tax-free. So if you have a spouse who is not working, consider an income-splitting strategy to save as much as $10 066 in tax.

      To be eligible for LITO, you must be a resident for tax purposes and lodge a tax return. The ATO will automatically apply this offset to your assessment for you if you're entitled to it.

      

PITFALL

      Minors cannot use the LITO to reduce tax payable on their unearned income.

      

BONUS RESOURCES

      Go to my website www.mrtaxman.com.au for a low-income tax offset calculator to work out the amount of offset you are entitled to.

       Superannuation Co-Contribution

      If your total superannuation balance is under $500 000 and your total income is under the low-income threshold of $36 813 and you contribute $1000 post-tax to your super fund, the government will match it by 50 per cent with a further $500. The super co-contribution gradually phases out to nil (by 3.333 cents per dollar) at the higher income threshold of $51 813.

       Superannuation Spouse Contribution Tax Offset

      You are entitled to a rebate of up to $540 if you make contributions into your spouse's superannuation fund, if your spouse's assessable income and reportable fringe benefits are less than $40 000 (increased from $13 800 in the 2016-17 income tax year).

      The rebate is 18 per cent of the lesser of:

      • $3000 reduced by $1 for every dollar that your spouse's assessable income and reportable fringe benefits exceed $37 000 (increased from $10 800 in the 2016-17 income tax year)

      • the total of the eligible spouse contribution.

      

TAX FACT

      The ATO outlines that tax offsets and tax deductions are not the same. Tax offsets are taken directly off your tax, while tax deductions are taken off your assessable income, which is used to calculate your