The Gillard Labor Government today outlined major increases in family payments for many thousands of Australian families if their teenage children stay on longer at school.
Prime Minister Julia Gillard announced the upcoming budget will deliver an increase in Family Tax Benefit (FTB) Part A for 16-19 year olds with families receiving up to an additional $4,200 a year for each eligible teenager that stays in school.
This will deliver on key a Gillard Labor Government election commitment that will be good for families and good for skills in the economy in the future.
The families of around 650,000 children turning 16 over the next five years will be eligible for the substantial cash increases if their teenager continues learning.
A great chance in life starts with a great education, which is why it is so important that teenagers stay at school and finish their secondary education.
The Prime Minister said the initiative will help many Australian families cover the costs of raising children and encourage teenagers to stay on at school.
From 1 January next year, the new maximum rate of FTB Part A for 16-19 year olds will increase by around $160 per fortnight - an increase of around $4,200 per year.
This will align with the 13-15 year old rate and ensure assistance for families does not drop when children turn 16.
The increases to FTB Part A will only be available for families where their teenager is in full-time secondary study, or the vocational equivalent.
Education is a central piece of the Gillard Government's reform agenda.
The Prime Minister is committed to building a strong workforce and economy based on a well-educated and trained population.
Since 2007, the Government has almost doubled schools funding and has made record investment in the training system to help more Australian children achieve their potential.
It has also introduced ‘earn or learn' requirements so young people in receipt of income support are working or studying to ensure that young Australians are doing all they can to build their skills and get ready for work.
The increased financial support for families outlined today builds on these initiatives.
The Government recognises that children do not get cheaper to care for as they get older. The cost of groceries, clothes and family activities can all increase as children grow.
We know these costs can be a barrier for low-income families to support their child's secondary education.
Research shows children from low-income families have lower levels of school completion. In 2006, Year 12 completion rates were 59 per cent for low-income students, compared to 78 per cent for higher income students.
By linking the increase to FTB Part A to school participation, we are ensuring families are able to better support their teenage children to stay at school.
New analysis by the Department of Families, Housing, Community Services and Indigenous Affairs shows that thousands of Australian families will be eligible for extra cost of living relief when the increase to FTB Part A begins next year.
We expect more young people and their families to stay in the family assistance system as a result of these changes. This will mean they will also benefit from access to Rent Assistance and FTB Part B.
About 23,000 families will either receive Rent Assistance, or receive extra Rent Assistance, up to $3,600 a year. In addition, 28,900 families will be eligible for FTB Part B up to $2,900 a year.
The increase to FTB Part A will cost $771.9 million over five years.
This initiative builds on and will help support the Government's robust targets for secondary school completion. The 2009 Council of Australian Governments (COAG) National Education Agreement aims to lift the number of people with a Year 12 or equivalent qualification to 90 per cent by 2015.