In brief
This year’s budget contained measures related to personal income tax, social services (including child, family and community support) and boosting home ownership.
Key takeaways
The Federal budget contains various measures concerning the families and communities sector and Australian families in general, including measures:
- Strengthening social and community services schemes (in particular with respect to the regulation of child support payments);
- Changing eligibility for the Pension Supplement for overseas residents;
- Establishing a single national Children and Family Support program;
- Increasing funding to support home ownership (AUD 2.1 billion over five years from 2025-26); and
- Increasing the Medicare levy low income thresholds for singles, families, and seniors and pensioners by 2.9%.
In more detail
Social Services
Child support
The Government will provide AUD 182.6 million over four years from 2026-2027 (and AUD 19.6 million per year ongoing) to improve the child support scheme, making it safer and more effective for children and parents. The funding is intended to support delivery of the Government's 2025 election commitment to address financial abuse in Commonwealth systems.
The funding comprises:
- AUD 78.6 million over four years to provide stronger protections for parents in Private Collect arrangements and give Services Australia greater ability to stop abuse and weaponisation;
- AUD 39.6 million over four years to expand the use of employer withholding of child support payments and enable faster disbursements of payments through legislative and system changes;
- AUD 23.3 million over four years to improve awareness of options available to separated parents entering the child support scheme;
- AUD 22.0 million over four years to improve the accuracy of child support assessments, including by strengthening tax lodgement enforcement and improving Australia’s international child support arrangements;
- AUD 18.4 million over four years to increase the use of Departure Prohibition Orders to recover child support debts from payer parents with large arrears; and
- AUD 0.6 million over four years to support non government organisations assisting parents with children overseas to seek child support from parents in Australia.
Pension Supplement
Eligibility for the Pension Supplement is being amended, with the Government estimating savings of AUD 218.0 million over five years from 2025-26 (and AUD 62.3 million per year ongoing). The savings from this measure have been said to fund other Government policy priorities. Key changes include extending payment of the full rate of Pension Supplement from six to 12 weeks for recipients who are temporarily absent from Australia and ceasing the Pension Supplement for recipients who are residing permanently overseas or who are temporarily absent from Australia for longer than 12 weeks.
Families and communities
The government proposes to establish a single national Children and Family Support program from 1 July 2027. AUD 171.7 million will be provided over five years from 2025-26 (and AUD 42.9 million per year ongoing) is budgeted for this initiative. The program is intended to simplify grant administration, better support frontline services to deliver prevention and early intervention activities, and build capacity within the families and communities' sector.
The funding includes:
- AUD 156.3 million over three years to provide additional funding for frontline services to support children’s development and wellbeing and empower parents, caregivers and families;
- AUD 9.7 million over five years to support the implementation of the Children and Family Support program; and
- AUD 5.7 million over four years to continue capacity building initiatives within the families and communities' sector to support improved outcomes.
Boosting home ownership
The Government has committed to providing AUD 2.1 billion in funding broken down as follows over five years from 2025-26 to support increased housing supply:
- AUD 2.0 billion over four years to provide funding to support local governments and state utility providers to expedite the delivery of housing enabling infrastructure;
- AUD 56.4 million over four years to support the oversight and delivery of key programs under the Government’s Homes for Australia plan and for a public campaign to inform taxpayers of the changes to the tax system; and
- AUD 2.1 million to extend Commonwealth funding to support the Australian Housing and Urban Research Institute.
Personal Income Tax – increasing the Medicare levy low-income thresholds
The Government will increase the Medicare levy low income thresholds for singles, families, and seniors and pensioners by 2.9% from 1 July 2025.
The increase in the thresholds is aimed at providing cost of living relief by continuing to exempt low income individuals and families from paying the Medicare levy and is estimated to decrease receipts by AUD 450.0 million over the five years from 2025-26.
A copy of the Federal Budget papers can be found here.
Siena Hillebrand and Austin Nguyen, Associates, Jeremy Hyman, Head of Communications, and Sky Friend, Business Development Consultant, have contributed to this legal update.