Review to 'overhaul family tax'

© istockphoto.com/Petrea Alexandru

THE Henry tax review will reportedly recommend a major overhaul of the family tax system, with payments to families to be reduced once children reach school age.

Family payments would decrease once the child started school. This is expected to motivate carers and parents to return to work, News Ltd newspapers reported on Thursday.

Currently under the current Family Tax Benefit, families with children up to the age of 13 receive up to $156.94 per fortnight, increasing to $204 for children between 13 and 15.

Meanwhile, older workers would be offered tax incentives to delay their retirement and welfare recipients would face stricter requirements to either find work or risk having benefits reduced.

The Rudd government has had the Henry review since Christmas, but is yet to release it despite pressure from business and the opposition. Treasurer Wayne Swan says it will be made public before the May 11 federal budget.