Treasurer Wayne Swan has announced the government will spread the benefits of the mining boom with a boost to the Family Tax Benefit Part A from July next year.
"We understand the pressures Australians face paying for electricity, housing, groceries, petrol or even a simple family outing," Mr Swan said.
An estimated 1.1 million families receiving the maximum amount will receive a windfall of $600 if they have two or more children and $300 if they have one child.
The 460,000 families receiving the base rate will pocket an extra $200 a year for two or more children and $100 for a single child.
The Schoolkids bonus will be a paperwork free payment that will give 1.3 million families assistance with education costs.
Families will receive $410 for primary school kids and $820 for high school students.
The bonus replaces the education tax refund that required families to collect receipts.
Charity groups had hoped the government would increase the Newstart Allowance by $50 a week to help jobseekers struggling under the poverty line.
The Gillard government rejected those calls because revenue is tight but welfare recipients will benefit from a new Supplementary Allowance.
The allowance will help people on Youth Allowance, Newstart and Parenting Payments with the cost of essential bills.
Singles will receive $210 a year and couples $350 in two instalments.
The first payment is March next year.
People who lose their jobs will also be able to access welfare payments faster with a doubling of the liquid asset test amount to $5000 for singles and $10,000 for families.
This means fewer people will have to run down their savings to become eligible for payments.
The government has reaffirmed its decision to make cuts to parenting payments to save $700 million.
Parents will be transition to Newstart Allowance and will stop receiving the payment when their youngest child turns six or if they are a single parent when their youngest turns eight.
What do you think of the federal budget?