What are family payments?
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They date from the Howard era and are the main form of government support to families. Family tax benefit part A provides a per child payment to eligible families, while family tax benefit part B provides an extra payment to single parents and couple families with one main income (i.e., with a stay-at-home parent).
As of 2013, about 1.7 million families receive the payment, with many receiving both.
The payments are income tested and also depend on the number of children a family has and their ages.
The maximum yearly payment for family tax benefit part A is currently $5,412.95 for a child under 12 and $6,825.50 for a child between 13 and 19.
The maximum yearly payment for family tax benefit part B is $4,339.85 for a child under 5 and $3,139.00 for a child between five and 18.
Under the current system, payments cut out when the youngest child turns 16 or 18/19, depending on whether they are still at school.
That sounds expensive
Family tax benefits cost the government about $20 billion a year. It is the second most expensive payment in the Social Services portfolio, after the age pension.
What did Tony Abbott and Joe Hockey want to do?
In the 2014 budget, the Coalition proposed a significant shake-up to "improve the sustainability ... while continuing to support those most in need".
This included freezing FTB payment rates and income eligibility thresholds (that qualify families for certain payment rates), and a cut (of between $120 and $50) to the end-of-year supplements that are paid to families.
Abbott and Hockey also wanted to stop family tax benefit part B when the youngest child in a family reached six.
What happened to that?
Labor and the crossbench gave the package a big thumbs down and blocked it in the Senate.
Earlier this year, then social services minister Scott Morrison tied the new $3.5 billion childcare package to the family tax benefit savings.
The Senate still wouldn't budge.
What have Morrison and Social Services Minister Christian Porter done?
Following discussions with Labor and the crossbench (but having failed to seal deals with either), the government released a revamped family payments bill on Wednesday.
The Coalition now wants to ditch the rates and eligibility freezes and stop family tax benefit part B for couple families when the youngest child reaches 13.
It will also also cut family tax benefit part B for other families that remain eligible when the child reaches 16, even if they are still at school.
It will phase out end-of-year supplements (currently worth between about $350 and $720 a year) between 2016 and 2018, but increase the maximum rate of family tax benefit part A by $10 a fortnight from July 2018.
It will also boost family tax benefit part B for single-income families with a child under one by $1000 a year, but cut the payment to single parents with children over 13 from $2737.50 to $1000 a year.
Payments to grandparents will also be cut.
Who wins and who loses?
The government has been emphasising that families on low and middle incomes will be better off because of the pending childcare package. But so far it has not specified how many families would be worse off under the family payments changes or how the two policy areas interact.
Labor has also pointed out that families with children over 13 will not access childcare anyway.
The Australian Council of Social Services is not happy and says a low-income single-parent family with two children will take a hit of more than $60 a week when their youngest child turns 13, because of the cut in family tax benefit part B and the cut in end-of-year supplements.
It says the $10 a fortnight increase in family tax benefit part A will not offset the other losses such as supplement payments.
What are the chances of the new package passing the Senate?
Better but it is not guaranteed. Both Labor and the crossbench are willing to consider the package, but concerns about cuts - particularly to single parents with teenage children - remain.
What does this mean for the budget?
Morrison said the family payments would produce the "savings necessary" to support the $3.5 billion over five years childcare package.
Increasing the fortnightly rate by $10 will cost $584 million over four years, but cutting supplements and cuts to family tax benefit part B will save about $5.4 billion over four years.
